Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 9, Issue 42
We Know Energy
October 28, 2011 Energy Update
In this Issue
Editor's Note
What Percent of U.S. Natural Gas Production Comes From Shale Gas?
Focus on Wind Power
EPA Recognizes Panera Bread of Maryland as a Top Retail Green Power Purchaser
Natural Gas
EIA Gas Storage Update - Data Released October 27, 2011
Baker Hughes Rotary Rig Count For Natural Gas
NYMEX Natural Gas Monthly Settlements For the Past 12 Months
NYMEX Values For the Forward 12 Months
NYMEX Graph For Natural Gas- 12 Month Average Price Per Therm at the Well-Head
PJM Electricity
Graph - PJM 12-Month Average Peak Power Price
Local Cooling Degree Days*
Recent Features
Chimes International Activates 3,000-Panel, 670-Kilowatt Solar Panel Field on Baltimore City Campus (Oct. 14)


Perdue Completes Final Phase of WGES-owned Solar Power System (Oct. 7)


University of Maryland College Park Unveils Its New Solar Array (Sept. 2)


WGES Helps the D.C. Metro Area's Oldest Jewish Day School Go Solar (August 26)


Perdue Completes First Phase for WGES-owned Solar Power System (August 12)


Philadelphia Brewery to Use 100% Wind Power Electricity From WGES (July 22)


Properties Can Profit from Residential Enrollments (June 24)


WGES Ranked #1 Supplier (June 3)

Our New Wind Power Partners
Panera Bread of Maryland (Lemek LLC)
Calvary Baptist Church
Mountain View Community Church
Caser Chavez Public School
PB Dye Golf Club
Behnke Nurseries
Townes of North Creek
Victory Racing Plate Company
Village Management, Inc.
Mt. Airy Bicycles
College Park Bicycles
Donatelli Development
Blue Ocean Realty
Mandarin Oriental
Bank of Georgetown
Embassy of Bosnia Herzogovina
Baltimore International College Foundation
The Shakespeare Theatre Co.
Kaiser Foundation Health Plans of Mid-Atlantic States

Visit wges.com/partners for full list of WGES Wind Power Partners.

To find out more about a green power purchase for your organization, call 703-793-7578, or visit wges.com/commercialwind.

For more information, contact your WGES Account Manager or wges_lgc@wges.com.
Editor's Note
What Percent of U.S. Natural Gas Production Comes From Shale Gas?
Week in review for period of October 21 to October 27, 2011

For the second week in a row, natural gas and electricity prices were relatively flat. For this seven day report period, the 12 month average price for natural gas on the NYMEX fell less than 1%, and the 12 month average price for peak power on the PJM rose less than 1%. For now, natural gas prices are trading near an eight year low and electricity prices are trading near a seven year low. (Please see the graphs included elsewhere in this newsletter for the trend lines.)

There are a number of variables that are forcing energy prices to drop to these attractive levels. Let's look at the most notable supply and demand variables that are creating this downward pressure. On the supply side, natural gas supplies are robust thanks to the shale gas discoveries. In the year 2000, shale gas production was .39 Tcf. However, in 2010, shale gas production rocketed to 4.87 Tcf. Currently shale gas accounts for 25% of the United State's total gas production and is expected to climb to 46% in 2035. The shale gas supplies are expected to more than offset the supply declines we are experiencing with the traditional rig counts. The traditional gas rig counts are 20% below the 5 year average. Thanks to shale gas, supplies are high for now.

From the demand side, energy demand is low because of the sluggish economy. Instead of gas getting consumed by customers, it is getting injected into the storage fields. For example, the natural gas in the storage fields is now 4.4% above the five year average. For now, energy demand is low.

High production and low demand are the big reasons that natural gas prices are near the eight year low and electricity prices are near the seven year low. However, winter is on the horizon. Plus, the U.S. Commerce Department just announced that the U. S. gross domestic product expanded at an annual rate of 2.5% for the third quarter. This is the best growth we have seen all year. Where do prices go from here? Stay tuned. Some analysts say that natural gas is the most volatile commodity in the world.

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