Natural Gas In 2012: Electric Generation Switch Implications

(SEEKING ALPHA) Natural gas (UNG) entered the injection season with the highest inventories on record. This created fears of storage exhaustion and a deep plunge in natural gas prices, also helped by a very mild winter.

This incredibly low natural gas price, in turn, meant that natural gas became cheaper to use in electricity generation when compared to the usual baseload fuel, coal (KO). Unsurprisingly, this lead to massive dispatch switching from one fuel to the other, producing statistics such as January’s 24.5% plunge in electricity generated by using coal, versus a 22.5% increase in usage of natural gas for the same purpose.

Read full article by Paulo Santos in SEEKING ALPHA