Two years after natural gas prices spiked, resulting in a jump in coal consumption for electricity (see Figure 1), natural gas prices have plunged to inflation-adjusted record lows. The Wall Street Journal reports drillers and producers are curtailing activity as storage bulges at the seams. Figure 1 United States Electricity Production by Source (eGRID) Figure 2 Natural Gas Futures Prices Price suppression is partly due to the recent mild winter and summer, which produced only a few early heat waves to stress the Southwest and West Coast grids. Electricity Prices Decoupling from Fuel Cost Electricity prices are rising because, as…
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