Natural gas glut puts brakes on economy

The pace of things is a little slower in Mansfield these days. The drive across town takes a little less time. The line at the gas station is a little shorter and the parking lots are less crowded every day. “It’s really been a tremendous change since February,” Shelby Spurlock, co-owner of Café 171 in Mansfield, in northwest Louisiana, tells The (Alexandria) Town Talk. “It’s gotten to the point where we wonder if we can keep the doors open or not.” Café 171 opened in September 2010, targeting the droves of oil and natural gas workers meeting the booming demand on the Haynesville Shale. And for almost two years the eatery has had a house packed with roughnecks, surveyors, supervisors and anyone else working the nearby rigs. “I just don’t know how long we can hold on,” Spurlock says. “The way things are falling, every day we get closer to nothing.” What’s falling—and taking a lot of local business with it—is the price of natural gas; which has hit dramatic lows over the past six months. In 2008, 82% of U.S. rigs were producing natural gas while prices ranged between $8 and $12 per million British thermal units, according to Louisiana Oil and Gas Association President Don Briggs. Now only 27% of rigs are producing natural gas and prices are near $2.70 per MMBtu. Those prices will need to return to at least $4.50 per MMBtu before serious activity is expected to return to the Haynesville Shale, Briggs says. “Companies can’t drill for natural gas at these prices,” Briggs says. Read the full story here.