CNG prices

[davidimc]

Sorry if this has been asked recently. I searched and couldn't find anything.

Why is natural gas in Utah and Wyoming so cheap and why is it so expensive in California and Nevada ?

I live in Utah so I love the 64 cent price but just want to understand the market dynamics.

I go my first CNG car last week and I'm loving this. Thanks to those who are putting together this forum. It's a very helpful site.

[freedml]

Re: CNG prices

In Utah CNG is sold by a regulated utility which can only charge its cost for gas plus a small amount (same in WY?). I'm sure they lose money on their retail CNG operation.

In California most retail CNG is sold by Clean Energy which is for-profit and apparently has a policy of pricing its CNG a certain amount below gasoline (even though there is no relationship between gasoline cost and Natural Gas cost). Stations operated by cities (Corona and others) have much lower prices (but not as low as Utah).

Even though I'm a 'free market economist,' the market for retail CNG does not yet come close to having competition. If you don't have your own pump, you're at the mercy of your local dispenser operation.

[rabwc]

Re: CNG prices

In Nor CA most available stations are by our regulated utility - PG&E - which also supplies the gas - unless some buy their own and use PG&E pipes only.

They post their price monthly at:

http://www.pge.com/tariffs/pdf/G-NGV2.pdf

At the March price of $2.29 per gge- it is more than 1/2 for "transportation" - pipes and compression - which I have yet to figure out how this is figured - it seems to be set for a year or so. Then they have a commodity component which changes each month - which is based on current market prices and about the same as the commodity charge for the home gas user. For current market prices (for PG&E City Gate) - see:

http://intelligencepress.com/features/intcx/gas/intcx_gas_point.emb?pointcode=ICECALPGCG

Current gas prices are creeping up - and this may be due to National demand from a local cold snap - or the gas market - such as if the Nuke plants go off-line then gas demand also goes up and prices climb. For general national market trends see:

http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp

As NG prices climb toward $10/mmBTU CNG will go up also - until market pressures or something else brings this down. But with Oil at 100+ per barrel - NG is still way cheaper and this drives usage up too.