From the Energy Information Administration:
In the News: Average price spread of natural gas delivered to the
power sector over coal declined by over three-quarters in 2012, while
ratio of net natural gas power generation to coal rose by 39 percent.
The average price of natural gas delivered in the United States to
electric power generators decreased to $28.16 per megawatt hour (MWh) in
2012, 28 percent below the average for 2011, according to data from the
U.S. Energy Information Administration’s (EIA) Electric Power Monthly.
This reflects a spread of $3.22 per MWh over the average annual price
of coal delivered to the power sector in 2012, less than one-quarter of
the $14.20 per MWh average spread in 2011, and just over one-fifth of
the $16.49 per MWh average spread from 2009 to 2011.
During 2012 in the United States, power generation from natural gas
rose by 21 percent above 2011 levels to 1,231 million MWh, while
generation from coal decreased by 12 percent to 1,517 million MWh. The
average ratio of power generated from natural gas to power generated
from coal reached 0.81 in 2012, 39 percent above the 0.58 average ratio
in 2011, and 82 percent above the 0.44 ratio in 2008, when average Henry
Hub natural gas prices were more than double the annual averages seen
since. For 2013 and 2014, EIA’s Short-Term Energy Outlook
forecasts the gas/coal net generation ratio to come down from its 2012
level, but to stay above the level seen in 2010 as the natural gas to
coal price spread increases from 2012 levels while staying below the
average 2010 level....MORE
As the decline curves for wells drilled in 2012 kick in, the production side is going to be a bullish factor:
...Total supply for the report week was flat. Bentek
estimates that supply was unchanged for the report period. U.S. gross
and dry natural gas production were up slightly, rising by 0.1 percent
over last week. Dry production for the week is 0.7 percent above last
year’s levels. A net decrease in Canadian imports of 1.1 percent offset
the increase in production. Driving the decrease in Canadian imports
was a 5.7 percent drop in imports to the West likely due to warm weather
in the Southwest for the report period. LNG imports decreased by 14.1
percent, although they are currently a negligible contributor to U.S.
supply....
