Bill Clinton was a first-term president and gasoline was selling for $1.24 a gallon the last time natural gas prices were this low.
National Fuel Gas Distribution Corp. has announced that the delivered price of natural gas will fall 6.46 percent, effective today.
The resulting price is the lowest in 19 years.
A typical residential customer — one who uses 90,000 cubic feet of gas annually — will see the monthly bill fall from $61.42 to $57.45.
That monthly bill represents a 66 percent decline from August 2008 when the company’s average customer was paying $173.20 a month.
What’s changed since the price of gas peaked is the supply of natural gas, said Carly Manino, spokeswoman for National Fuel.
“Continued decreases in the market price of natural gas are due in large part to the increasing production in the Marcellus Shale,” the utility said in a statement. “Nearly all of the gas consumed by National Fuel utility customers comes from Northeast-produced shale gas.”
By law, Pennsylvania utilities are required to pass along the price of natural gas without a loss or profit.
The price of the gas itself — without delivery — falls today to $6.39 per thousand cubic feet.
The last time National Fuel posted a lower price was August 1996 when the utility sold gas for $5.65 per thousand cubic feet.
In inflation-adjusted dollars, however, today’s gas price is substantially lower. The $5.65 National Fuel charged 19 years ago is equivalent to paying $8.45 today.
Prices in recent years have followed a generally downward trend, falling each of the past four quarters and for 19 of the past 25 quarters, according to data from National Fuel.
For much of that time, gas exploration in the Marcellus and Utica shales have been growing along with the proven reserves of natural gas. During that time, the United States also has emerged as the world’s largest producer of natural gas.
Against that backdrop, National Fuel had expected prices to fall this year, but apparently not by this much. In January, when the utility filed its annual purchased gas cost projection with the Pennsylvania Public Utility Commission, National Fuel predicted prices would fall 2.1 percent by Aug. 1, leaving the average customer with a monthly bill of $71.41.
Some are hinting that prices might have hit bottom. Oilprice.com, an online energy website, notes that the “worst of the oversupply is over.”
Demand is likely to increase, potentially driving up prices during the warmer summer months as demand for electricity rises. The Energy Information Administration reported Thursday that power generators are using more gas than normal.
This article was from Erie Times-News, Pa. and was legally licensed through the NewsCred publisher network.