Readers of this blog will not be surprised to know that gas customers of 5 utilities in southeast Pennsylvania and New Jersey are saving about $500 per year on their natural gas bills as a result of the shale gas boom, since that fact was first calculated and reported here. Andy Maykuth of the Philadelphia Inquirer, however, reports good details, including that gas costs to consumers are down 37% to 52% since 2008. www.philly.com/philly/insights/20111223_Shale_gas_is_shaving_bills.html.
The 5 gas utilities where gas costs have crashed are UGI, PECO Energy, South Jersey Gas, PSE&G, and PGW. PGW's cost of gas has fallen from $1.27 for one hundred cubic feet of gas in December 2008 and is now 61 cents. Maykuth calculates this gas cost reduction saves the average PGW customer $594 per year.
PGW only serves in the City of Philadelphia where approximately 20% of the people have incomes below the poverty line. Saving $594 per year for poor and low-income families is huge, even life saving, and without shale gas production the savings would not exist. These savings are even more important this winter, because the Low-income Home Energy Assistance Programs that provides heating bill assistance is being slashed. The desperately needed savings are a huge point that the Inquirer editorial page should factor into its positions.
Maykuth also writes about UGI opening a pipeline directly from the Marcellus fields to 15,000 UGI customers that this blog highlighted earlier in this week, noting that reducing transportation costs offer another wave of savings for gas customers.
The Maykuth article also hits a frequent theme here about the big savings gas offers to heating oil consumers who are paying record high prices for heating oil. But he does not point out that the low-priced gas produced by shale has also cut electricity wholesale market prices and saved residential consumers about another $500 per year, compared to where wholesale electricity prices were in July 2008.
The low-price of gas not only is saving consumers big money in gas bills plus electricity bills but also is cutting enormous amounts of pollution by reducing oil and coal consumption at power plants without modern pollution controls. Gas emits about half the carbon dioxide and a small fraction of the nitrogen oxide and sulfur dioxide pollution.
The consumer, economic development, and pollution reduction opportunities presented by doing shale gas right are big indeed and Maykuth's piece provides an important example of just some of them.