Natural Gas Prices Near Record Lows

Renewable energy competes, to some extent, with natural gas—a commodity reaching record lows.

Eric Wesoff April 19, 2012

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Yesterday, we wrote about the ascendance of natural gas reserves from "unconventional sources" such as fracking and its impact on world energy markets. We posed the question of whether plentiful and cheap natural gas can act as a bridge for renewable energy, or whether it absolutely strands the progress of wind, solar, and energy storage.

Here's graphic evidence from the EIA of the price plunge the commodity has taken:

Prices are down because of a mild winter, high production, and strong inventories. On March 31 -- the end of winter for the natural gas market -- spot natural gas prices at the Henry Hub approached $2 per million British thermal units (MMBtu). On April 18, the natural gas spot price at Henry Hub was $1.87/MMBtu, according to the EIA.