Marcellus Gas Still Turns a Profit Despite Price Decline

The production of shale gas across the country has done two things — stabilized the gas market, and make it tank. The price today lingers around $4 dollars per million cubic feet. Back in July of 2008, gas was going for as high as $14. But here’s the good news for lease holders in northeast Pennsylvania, the Marcellus Shale is still profitable for gas companies, and may be the only shale play currently giving investors a return. So those royalty checks should continue to come as the gas continues to flow in Bradford and Susquehanna counties.
Terry Boston, who runs PJM Interconnection, says the Marcellus Shale gas will provide a major change in how they do business. PJM runs the largest electrical grid in North America and spoke on a panel Thursday at the Shale Gas Insight Conference in Philadelphia. Boston called shale gas a “blessing” that came just in time to offset  stricter environmental regulations for coal fired electricity plants.
Industry analysts on the panel agreed that the price of natural gas will stay low, but rise to between $5 and $6 dollars per million cubic feet within the next five years. Greg Gordon, from International Strategy and Investment Group, said for the first time, natural gas is as cheap as coal. So that, combined with new air quality standards, will set the stage for the conversion of coal to gas fired plants.

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