Greenspan Says Natural Gas Prices Are a Threat

Greenspan Says Natural Gas Prices Are a Threat

Translation: We're running out of natural gas in the United States, and Canada is unable to meet our demand. Thus, we will lose jobs as companies relocate to where the natural gas is cheaper. Thus, as we lose jobs and households are having a sharp hike in the price of heating and cooling, consumer spending will reduce and further deflate the economy.

Mr. Greenspan has managed to keep deflation at bay by lowering interest rates and thus stimulating the real economy through housing and real estate, but he has about reached the minimum level he can reduce the interest rates. His so-called "other options" have not yet been revealed, but he had better find a way to get more money printed into the real economy, rather than into the hyperreal financial system that rarely "trickles" down effectively to the real economy of the rest of us. I wonder if Greenspan acknowledges the misallocation and waste between the financial systems and the real economy, or if he is in Wall-Street la-la land and believes that investing in Wall Street actually results in the efficient production of real goods and services in the real economy?

As long as the price of energy continues to rise because of reduced supply, our money supply will shrink. Bad for us, good for oil barons. Too bad for us that the country is currently being led by the oil barons.

is what is a threat.

there will be no disruption of supplies, no manipulation of prices, or no illegal collusion.

Trust Greenspan to be wrong on EVERY ISSUE.

Refusal of companies to make investments in pipeline and other infrastructure in countries where they WANT TO SELL THEIR GAS does not automatically mean you can have our national lands to despoil!!

Ya want energy? Pay a fair price, do the investment, then sell it at a fair price. If the whole world pays more, does that mean the U. S. gets off cheap?

(I didn't register to read article so forgive me if this was mentioned)

This administration has done very little, if anything to replenish the already very low levels of natural gas that the US normally stockpiles for use.

They have fallen so far behind now, and what with good quality supplies being harder to find/extrude, that the US is already in a state of crisis and this winter is not going to be pleasant regardless of any "extreme" weather events.


One excellent article I read:

http://www.fromthewilderness.com/free/ww3/062303_nat_gas_crisis.html

snip

The single greatest threat to the U.S. right now comes from a critical shortage of natural gas. The impending crisis will affect all consumers directly in the pocket book, and it may well mean that some people won't survive next winter. The problem is not with wells or pumps. The problem is that North America is running out and there is no replacement supply.

Natural gas stocks are currently at 1,199 billion cubic feet (Bcf), over 39% short of what they were last year at this time (1,954 Bcf). The storage refill season has so far proceeded at a very modest pace, though buyers recently pushed up their purchases to record levels.1 The peak storage refill period runs from May through mid-July. By late July, summer electricity demand usually limits the amount of natural gas available for storage. Weekly storage levels tend to taper off through the summer, rise again slightly in September, and then drop to nothing as the winter heating season starts up in October. There is very little time left to replace the record withdrawals that occurred this last winter, and the peak refill season is nearly over. What is more, analysts are saying that we need to do more than just replace what was used last winter. In order to avoid a crisis next winter, we must build our storage up to record levels.


snip

Winter demand in 2002-2003 hit an all-time high, depleting storage by a record 2550 Bcf. By early April, storage had bottomed out at a dangerously low 623 Bcf, more than 40% below normal storage for that time of year. Spot prices skyrocketed to $10.00 per Million British Thermal Units (MMbtu's). This led to NG prices of as high as $30 per million cubic feet (Mcf).

The American Chemistry Council has calculated that this is equivalent to paying $16 for a gallon of milk, more than $9 for a gallon of gas, or nearly $13 for a pound of beef.3

Many electrical power plants now run on gas and can't be easily converted to run on anything else. Remember California's power crisis a couple of years back? Get ready to see it again in other parts of the country.

n/t

Econo-Magic Man in the fight of his political life with geological reality.

I wonder who'll win?

The only way they would do it is if all the schools in the area converted to gas from oil heat. The schools are already underfunded and way over budget. I can see big problems arising when the gas prices go up. I tried contacting the school board with the From the Wilderness article but my emails got bounced back. Quite probably they wouldn't have listened anyhow.

WASHINGTON (Reuters) - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) on Thursday said growing U.S. demand for natural gas to fuel factories and electricity plants may outweigh environmentalists' desire to preserve wilderness areas that contain energy reserves.

A sharp rise in natural gas prices and an unusually low stockpile of the fuel has grabbed the attention of the Bush administration and lawmakers. As a result, Greenspan -- whose appearances on Capitol Hill usually feature discussion of broad economic trends -- was asked to testify at the Senate Energy Committee on the impact of high gas prices.

The Senate will resume debate on a broad energy bill later this month. The Bush administration and many Republicans want to allow drilling on more federal land in the Rocky Mountains, while Democrats and environmental groups support energy conservation and renewable fuels.

http://story.news.yahoo.com/news?tmpl=story&cid=570&ncid=753&e=7&u=/nm/20030710/sc_nm/energy_greenspan_dc