Natural Gas Artificially High? Cities Suing Producers

[NJCher]

Well, well, isn't this interesting. Associated Press has an article called "Natural Gas Economy is Losing Steam." It's one of those stories where the headline is deceiving about what the real content is--sort of like those vote recount stories we all had to read when it was seen that Gore did indeed beat bush in the 2000 election.

This story is about how natural gas producers are being sued by some major midwestern cities for price collusion:

"I think the increase in prices is a designed thing," says Charles Wheatley, a lawyer for the 18 communities from Texas to Indiana suing five leading gas producers in federal court.

While the story is ostensibly about how natural gas production was once viewed as a bright spot in the energy business, now the lazy producers have figured out how to keep the price high and do less scrambling. Of course, they deny that but if you read the story, it seems pretty obvious that this is what is happening.

I had $500 a month gas bills and my house is only about 2000 square feet. This year I am installing a soapstone stove and will use natural gas only as a supplement or backup.

More excerpts from this story, which can be found at:

http://www.forbes.com/entrepreneurs/feeds/ap/2006/04/29/ap2708404.html

Natural Gas Economy Is Losing Steam

"There's a lot of natural gas in the world," says Jerry Langdon, an executive at producer and marketer Reliant Energy.

Why, then, isn't it reaching users?

Despite their protests, maybe some producers aren't really trying, industry critics suspect. Maybe they're happy to take it easy and rake in record yearly profits. Many natural gas producers are the same companies benefiting from rocketing gasoline prices in recent years - familiar petroleum names like Exxon Mobil, Chevron, Shell and BP.

Drivers, of course, can respond immediately to high prices by traveling less. It's harder for people to turn down their natural-gas heat. "As soon as companies that control the resource figure out how to keep prices high, they'll do it, and I believe that's what were seeing in gas," says Ezra Hausman, analyst for Synapse Energy Economics in Cambridge, Mass.




Cher

[One_Life_To_Give]

1. Customers probably won't be switching to oil.

Well the competition for Gas heat is Oil and Electric. As the prices of the competition increase. Their is no incentive to keep your own prices as low as possible. Since people aren't likely to switch anyway.