Energy conservation may avert natural gas supply crunch

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Natural gas prices have jumped dramatically in the past couple of months, and a Purdue University agricultural economist said that supply might also become an issue as natural gas production has decreased due to hurricanes Katrina and Rita.

"The fear is that the production we are losing now will cause shortages this winter," said Otto Doering. "New gas supplies cannot be brought on line quickly."

He said the only additional supply available is liquefied natural gas imported from the Middle East. "However, there are a limited number tankers to transport it and fewer port facilities to receive it," Doering said.

Doering said high prices could help keep adequate supplies of natural gas available. "With little flexibility to increase supply or reduce demand, a big price increase creates the incentive to limit use," he said.

"Conserving 10 percent would make a big difference right now," he said.

"We are at a tipping point where a small surplus that is expected to continue for a while could eventually greatly reduce prices."

http://news.uns.purdue.edu/html3month/2005/050930.Doering.crunch.html

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