Nearly full natural gas reserves, onshore drilling minimize Isaac's effect on price

Increased onshore natural gas production minimized the effect of Hurricane Isaac on the country's natural gas prices.
by Adam Wilmoth Published: August 31, 2012
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Not long ago, a hurricane in the Gulf of Mexico would have caused natural gas prices to spike.

But not today.

The country's natural gas markets barely noticed Hurricane Isaac churning through the gulf this week, even as the storm threatened the country's oil and natural gas production platforms, refineries and storage terminals.

Isaac forced producers to shut in more than 3.2 billion cubic feet of natural gas per day, which is about 72 percent of the gulf's daily output.

The price of natural gas gained 14 cents Thursday, but still closed down 7 cents over the past week, settling at $2.76 per thousand cubic feet Thursday.

The country's near-full natural gas reserves and rapid increases in onshore shale gas production have largely shielded consumers from the effects of the storm.

The Gulf of Mexico now represents only 7.3 percent of the country's total daily natural gas production, according to the U.S. Energy Information Agency.

When Hurricane Katrina swept through seven years ago, the Gulf of Mexico held more than 19 percent of the country's natural gas production. Natural gas prices jumped $2.25 to more than $12 per thousand cubic feet when Katrina made landfall.

When Hurricane Gustav followed a similar course in September 2008, the Gulf of Mexico represented more than 15 percent of the country's production. The price of natural gas rose 88 cents to a high of $8.81.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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