IBJOpinion

Shale gas will support inexpensive electricity

November 30, 2013
Keywords
Back to TopCommentsE-mailPrintBookmark and Share
IBJ Letters To The Editor

As stated in the “Natural gas dilemma” article [Nov. 18], there is increased demand for natural gas in the electric energy market in Indiana and across the country. However, I take exception to the theme that this increased demand will drive volatility in the market and harm Hoosier electric and gas customers.

As we previously announced, Vectren’s winter gas bills for central Indiana will be slightly higher than last year, but remain near historic lows. Local distribution companies like Vectren simply deliver the gas to homes and businesses at the price paid. State law prohibits utilities from making a profit on the commodity price.

In fact, gas prices are so attractive, we received approval to purchase some hedged gas well into the future, locking in a portion of our supply up to 10 years out at prices around $4 to $4.70 per unit. Our purchasing strategy has always been about making sure customers have a reasonable-cost supply.

Shale gas, known as the “game changer” of the energy industry, is now being produced in 32 states. It has helped put domestic gas supply at levels not seen since 1971.

According to a May 2013 Energy Information Administration report, shale gas development will go from between 30 percent and 35 percent of U.S. gas supply to 50 percent by 2040. This abundant supply was the catalyst for the substantial dip in market prices between 2008 and 2009, and the certainty of shale gas for decades to come is the reason market volatility has mitigated substantially.

According to the same report, domestic natural gas production is growing faster than consumption, and the U.S. will become a net exporter of natural gas around 2020.

Our nation’s strong natural gas supply fundamentals and robust and reliable natural gas delivery infrastructure suggest that through the next decade and beyond, a range of demand scenarios can be met by a diverse and responsive supply market within an estimated price band of $4 to $6.50 per MMBtu in today’s dollars—a level well below the peak market prices of the preceding decade.

The short- and long-term outlook for the supply and price of natural gas remains extremely positive for the U.S. It is important we continue supporting policies for responsible fracking and put this domestic source of energy to use for all customers.
__________

Carl Chapman
CEO, Vectren Corp.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

ADVERTISEMENT