Multiple WSJ articles this morning with implications for natural gas — and one in Bloomberg worth paying attention to.

First, in “Glut Hits Natural-Gas Prices,” the WSJ reports:

U.S. energy companies are pumping so much natural gas out of the ground that prices are plummeting, and the cheap gas isn’t likely to evaporate anytime soon.

Natural-gas prices fell 5.7% Wednesday to their lowest level in over two years—good news for people who use gas to heat homes and for companies that use it to power factories.

For U.S. energy companies, however, the domestic natural-gas market is looking increasingly out of whack. Despite a 32% drop in prices last year, onshore production rose 10%, and it is expected to rise another 4% this year, according to Barclays Capital. As a result, prices are expected to remain low for at least the next couple years.

Prices may even drop through — or at least near — the old $2 per mBtu floor that hadn’t been hit since 2002.

So what to do with all this gas?  The WSJ provides one answer in their story on utility emissions, “Power Plants Top List of Emissions.”  This is the first time EPA has made detailed emissions information publicly available, and not surprisingly:

Power plants accounted for more than half of the greenhouse-gas emissions by the major emitters on the list, with refineries and chemical facilities also contributing large shares.

So clearly one thing to do with all this gas is use it for power plants while we figure out how to burn coal more cleanly.

Another thing that can be done is referenced in Bloomberg today, who reports that: 

Chrysler Group LLC, the automaker controlled by Fiat SpA, plans to begin selling natural gas- powered pickups in the U.S. this year, said Sergio Marchionne, chief executive officer of both automakers.

Apparently deliveries will begin in the US in 2017 to, appropriately enough, fleet customers.  The reason to start with fleets is obvious and well reported by Bloomberg:

Infrastructure for refueling natural gas vehicles is limited. The International Association for Natural Gas Vehicles says on its website that there were 1,000 stations and 112,000 natural-gas vehicles in the U.S. as of December 2010. The worldwide totals were 12.7 million such vehicles and 18,202 refueling stations, according to the association’s data.

So you start with fleets that can make the investment in refueling infrastructure and can then recapture the investment in lower engine and fuel costs versus diesel and electric hybrid — estimated by Fiat as $3,000 in engine costs alone for natural gas versus $3,300 for diesel and $8,000 for an electric hybrid.

Natural gas for power and natural gas for fleet vehicles where it makes sense.  That’s a pretty sound use of this currently plentiful commodity and a likely recipe for sustainable pricing.

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