Recently home heating costs have been very low. This is because the price of natural gas is historically low at the moment. Lots of new discoveries along with new technology has led to a huge increase in natural gas on the market. A recent article at Seeking Alpha highlights a few of these points.
“The interesting point about this round of M&A activity is the timing. It is occurring at a point when the supply of natural gas is abundant and prices are correspondingly depressed. In fact, natural gas prices remain firmly below pre-economic crisis levels. Much of the reasoning for the price slump can be attributed to prolific gas discoveries in previously inaccessible geological structures, such as Haynesville, Marcellus and Eagle Ford Shale Formations. Couple this with the advent of new technologies to access these unconventional deposits and the result is the surplus of the commodity. According to US Energy Department estimates, the Marcellus Shale alone is thought to hold somewhere in the vicinity of 262 trillion cubic feet of natural gas. This massive geological formation is the largest gas field in the US and touches four states: Pennsylvania, New York, West Virginia and Ohio.”
Large oil companies like Chevron and BP are coming into the domestic natural gas sector right now while gas prices are depressed. These developments are tending to keep a lid on new solar hot water installations because the payoff period for homes with gas water heaters is so long at the moment. It is our contention however, that these depressed prices are only temporary and they will soon begin to creep back up again in the not so distant future. Lock in your rate (free) now with solar hot water!