Marcellus Production Helps Reduce Natural Gas Prices in 2012

Susan Phillips

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Susan Phillips tells stories about the consequences of political decisions on people's every day lives. She has worked as a reporter for WHYY since 2004. Susan's coverage of the 2008 Presidential election resulted in a story on the front page of the New York Times. In 2010 she traveled to Haiti to cover the earthquake. That same year she produced an award-winning series on Pennsylvania's natural gas rush called "The Shale Game." She received a 2013 Alfred I. duPont-Columbia University Journalism Award for her work covering natural gas drilling in Pennsylvania. She has also won several Edward R. Murrow awards for her work with StateImpact. In 2013/14 she spent a year at MIT as a Knight Science Journalism Fellow. She has also been a Metcalf Fellow, an MBL Logan Science Journalism Fellow and reported from Marrakech on the 2016 climate talks as an International Reporting Project Fellow. A graduate of Columbia School of Journalism, she earned her Bachelor's degree in International Relations from George Washington University.

January 8, 2013 | 3:54 PM

The average wholesale natural gas price fell by 31 percent in 2012 compared to the previous year, down from $4.02 per million British thermal units in 2011 to $2.77 per MMBtu at the main trading location in Louisiana. The U.S. Energy Information Administration reports on Tuesday that last winter’s mild weather, combined with increased production of Marcellus Shale natural gas, as well as shale gas production in Texas, forced a significant drop in price. The price of natural gas fell despite a shift in electricity generation from coal to natural gas.

“Average annual prices for natural gas fell 30%-34% at 5 of 10 major trading points in 2012 compared to 2011. An increased supply of natural gas significantly contributed to higher inventories and lower prices nationwide.”

The largest drops in price occurred at the trading locations closest to the Marcellus Shale. Average prices at Transco Zone 6 in New York, dropped by 38 percent, and by 37 percent at TCO Appalachian Pool on the Pennsylvania Maryland border. Prices for natural gas typically spike during cold winter months and hot summer weather.