No end in sight for high natural gas bills

Skyrocketing costs at the wellhead are to blame for dramatic increases in local natural gas bills, TXU Gas spokesman Doug Hill said Tuesday.

“In December 1999 the cost was $2.65 per mcf (thousand cubic feet),” he said. “In December 2000 the cost was $9.10 to $9.15 per mcf.”

Since the onset of cold weather this season, people across the country have seen their gas bills rise sharply, straining residential budgets and putting an added burden on agriculture producers who use natural gas to fuel irrigation wells.

According to Hill, it goes back to simple supply and demand, and there won’t be any relief until more new wells are drilled.

November and December were some of the coldest back to back months since records have been kept in Texas, he said.

Also, new electric generating facilities are using natural gas, and the population of the United States has increased in the last ten years. The population pressures mean more natural gas users and more electricity consumers, which requires more gas for generators.

Additionally, high temperatures this past summer drew down on natural gas reserves as electricity providers had to generate more power to keep air-conditioners running.

“Natural gas is the cleanest source of energy, but it is costly to produce.”

Hill said there wasn’t much drilling in recent years because of low prices but more is occurring now than at any time in the last ten years. Even so, drillers are faced with another problem.

“A lot of rigs were cut up and sold for scrap iron, and the people who operate those rigs have found employment elsewhere.”

In a column this week, Texas Railroad Commissioner Charles Matthews also addresses rising natural gas costs.

“During the first downturn in 1986, the oil and gas industry lost over 500,000 jobs nationwide,” Matthews wrote.

“In addition to that number, another 50,000 jobs were lost during the most recent downturn of 1998-1999, which lasted over 18 months.”

Matthews says a decline in applications for natural gas drilling and completion permits shows “that we have lost talented, qualified people in the industry who have the ability to identify and explore new fields, drill new wells, and increase production.”

“The new wells that will be coming on line may not begin to yield significant increases in actual production until later in the year,” the commisioner wrote.

Matthews hopes the state legislature will take a long-term look at how to revitalize the natural gas industry to fuel growing demands.