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May, 25 2016

The State of Natural Gas 2016

The end of 2014 and the beginning of 2015 was a great time to be a oil customer, prices had just plummeted and it seemed that the Natural Gas Conversion craze seemed to be at a pause. Where does this huge drop price mean for the Natural Gas industry and how did we get to this state of natural gas.


Oil is and has been higher than Natural Gas in price since 2009, this has stayed true even during oil's recent shale boom that saw the barrel drop to $30-40.  When the shale boom started toward the end of 2014 oil has stabilized now between $50-60 and saw a drop to $30-40. During this same time natural gas when converted to the barrel stayed around $20-30, with a spike to $50 and a low point of $18-20.


Prior to this time natural gas and oil were fairly close in cost with a few spikes here and there when one or other became more expensive. This recent gap in pricing pushed many consumers to make the switch to natural gas, but hasn't or wasn't it universally adopted as a fuel source? For most of the country natural gas is the most popular fuel source, with about half of the country using it.   It is then followed by electricity, and the third most popular fuel source being oil, with the majority of that being in the Northeast. Why hasn't the Northeast embraced natural gas as much as the rest of the country or why has oil stuck around if the infrastructure is in place. A lot of it has to do with price and the age of the area.


When you think about it the Northeast is one of the oldest parts of the country and there would have the oldest infrastructure in place, as you go west to newer parts of the country you find more areas that embraced natural gas as a starting point. This of course doesn't mean that the northeast doesn't have the infrastructure in place for natural gas, it's just not everywhere. Natural Gas is delivered to homes through pipes that run along the roads through a meter and in your home. If the pipes aren't on your street than the gas can't be delivered to your and this is the disconnect.


Part of the push has been to install new piping into towns to bring natural gas to areas that didn't previously have gas, however it hinges on the entire community getting behind natural gas. Towns or utilities are more inclined to install new NG piping into a part of town if the residents in that area are willing to make the switch. This will usually require several people to commit to making the switch beforehand. For those that don't commit at first will be able to switch at a later point. In heavily populated areas this process is much easier since homes are closer together and less piping is required to serve a lot of homes. 


Once you have decided that you want to make the switch to Natural Gas, you'll have to call you local NG supplier to set up an appointment to have pipe run from the street to your home. This may take awhile due to the amount of people that have been making the switch to NG and should be done before contacting a company to install a new gas boiler or furnace. Once your local natural utility has completed the process of connecting your home to the street for NG it is time to pick the products that you like to have installed in your home.


Natural Gas and Propane are the only outside fuel source that allows for a complete home application, while oil can only be used for heating your home and your water supply. Propane can of course be used in many different applications like home heat, water heaters, dryers, fireplace inserts, grills, space heaters, stoves, and cooktops. This allows you maximize your home comfort without having to worry about keeping a tank full.


While the process to get natural gas into your home may be more than that of Propane or Oil, witch just requires a tank being installed, the benefits of an on-demand fuel source like natural gas outweigh the time restraint. If you're interested in making the switch from Electric or Oil to Natural call your local utility company and then call the Gas Doctor.