U.S. gas production rose to a record of more than 37 trillion cubic feet last year, up 44% from a decade earlier. Yet the infrastructure needed to move gas around the country hasn’t kept up. Pipelines aren’t in the right places, and when they are, they’re usually decades old and often too small, The Wall Street Journal reports.
Earlier this year, two utilities that service the New York City area stopped accepting new natural-gas customers in two boroughs and several suburbs, because they couldn’t guarantee they’d be able to deliver gas to additional furnaces. The utilities cited jammed supply lines running into the city on the coldest winter days, never mind that the Marcellus Shale, is only a three-hour drive away.
Meanwhile, in West Texas, drillers have so much excess natural gas they are simply burning it off, roughly enough each day to fuel every home in that state.
This spring, the price of natural gas at a trading hub near Midland, Texas, dropped as low as negative $9 per million British thermal units—meaning that producers were paying people to take it off their hands. (A million British thermal units is enough to dry about 50 loads of laundry.)
Elsewhere, prices soared due to bouts of cold weather coupled with supply disruptions. At a trading hub in Sumas, Washington, natural gas rose to $200 per million British thermal units in March, the highest ever recorded in the U.S.
The national benchmark, set at a knot of pipelines in Louisiana, recently hit a three-year low of $2.19 and has hovered below $3 for much of the year.
With U.S. homes, power plants and factories using more natural gas than ever, the uneven distribution of the shale boom’s bounty means that consumers can end up paying more or even become starved for fuel, while companies that can’t get it to market lose out on profits.