Oct 12, 2016|
Gurpal Dusanjh (Bloomberg Intelligence, Nat Gas) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Look out. It's natural gas prices are on the rise and could affect your home heating bills this winter we're joined by der pol goes on from. Bloomberg to talk about natural gas I do younger Paul. Are very good so how are low oil prices impacting the cost of natural gas. I had actually in the US suspect there really isn't an in between northern Madagascar it's a banquet or an address is really for LNG exports which. But I would explain them trying to. Right but what percentage of our natural gas is coming as a byproduct of drilling rigs for oil. I can be as much but twenty to 25% Aceh we haven't really seen a huge draw pop. You know in the past Coakley is what I hope that there's been elements darkness because that's looking more poppycock and we used to it and became more metric happiest in the north peace time. A lot more invite the rock he's kind of access. It hasn't natural gas gone up quite a bit in price I thought it was up 30% this year. Yeah. So we can about flee to thank Dean Cain when the president kids you know since when it finished. And you know may surprised just huge historic decreasing quite sharply. For the summer and that's what you been complaints which. For the cold too that could pass him and put public constant. That kind of preached kind of think he averaged pulled storage. But this time India and the treaty driven. Increase in natural gas prices. And what percentage of our homes US homes are heated with natural gas. That is huge difference across the states on operations about fixed to the largest amount is in the party in the mid the midwest where he grew about 60% of households easing Africa. In the north if you click on the 50% like 5560%. In the northeast we keep hearing about it. Problems with pipelines the fact that there aren't enough pipelines and that's why we pay more for electricity. And more for our natural gas is that a problem that's national or is it really related strictly to the northeast. Because yes the very localized problem. Like it is. It's and senators say you're talking in New Hampshire that he a problem with high places that you caught. You know I might depend higher electricity crisis because you haven't got. Electricity lines from Quebec could fully independent act compliance. To bring get like cheap and Africa from the state but you know it took into possible penalties to Iran like being a local utility Pennsylvania event. Everything she did the trees so it's a very localized Obama. So tight in just little piece that's very specific states with and the northeast. So when you look back like last winter was pretty mild relative to the last three but if we go back to the winters of thirteen and fourteen. They were darn cold with what could happen to the price of natural gas and what could happen to the price of electricity. If we yet. You know an abnormally cold winter. My grin emerged that position in terms of production so. BP would definitely spike that's. Without a doubt but I think it's going to be shall live if there is sticky cute twin trends you know that have been. Some took a stake could be have you wintry again. We would hit spike can I didn't think we can expect fifteen to spikes and practical the incident because production. Emmett that tumbled forward looking more production from me twelve. Or Paul do you anticipate that there will be any progress made as a relates to pipelines I mean it again. It's a northeastern problem. Specifically here in New England it's causing really a lot of the rate it means so the electric bills that I saw this summer were related to this problem. Which. It is is there any progress being made. Talk to people I think the match typical what took an X copy is that he more pipe enact this sometime between today. And there were compact could try to show off with a critical pipeline from Canada lifting. A little more organized kind of activism to try and should on the planet in these type and so the team delays across the whole. Time I'm at these projects to delay department seemed to make each state individual steps of princess and don't have I think the problem and I think it's a commanding gets close at the time. They're Paul thank you very much for your time in your information we appreciate. You know Truckee the death the nightmare scenario. Of course is. You get he really cold winter. And oil production drops off so you're not getting that. You know the surplus natural gas you basically get for free yup when you're drilling. Rig count is down I mean that the recount I think we're down to levels we haven't seen since the 1940s. I I just look at this and him myself if we get a really bad when like if you some of you. Are paying extraordinarily. High electricity costs why because they couldn't get the natural gas to the power plants in the cost went up. Yeah and as you mentioned rig count it continues to be incredibly low when we take a look at where we are compared. Just to a year ago were down about 30% in terms of the number of rigs in the U lesson and if we take a look compared to where we were. Back in 2014 to 2015. Yeah. We're better we're we're down like 60% had at one point in 2015. They were over 16100 rigs working in the US right now. Today there 524. And it's hard to understand that day the the recount does correlate to natural gas production. Sounds like a lot of the problems of natural gas those not so much the production and what we have in storage is just getting it where you need it it is in people in New England or no stranger to this because we've talked to land. About how look we have this huge demand for natural gas here. The pipeline capacity isn't there are so what do we do we turn into liquid form we bring it in from the ocean even though it takes Q how will help how expensive as hell won't hesitate to do that. It's we we don't have a a coherent policy when it comes to being able to transport where needed and it's because states and towns and communities can't agree on running it because nobody wants the pipelines running through the back got my back yard.