Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 4
We Know Energy
January 27, 2012 Energy Update
In this Issue
Editor's Note
Prices Rise for the First Time in Two Months on "Shut-in" News
Spotlight on Carbon Offsets
WGES Customers Show How Small Changes Make a Big Difference
Natural Gas Fundamentals
EIA Gas Storage Update: Largest Withdrawal of the Season. Data Released January 26, 2012
Baker Hughes Rotary Rig Count For Natural Gas
NYMEX Natural Gas Monthly Settlements For the Past 12 Months
NYMEX Values Per Month 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 Heating Degree Days*
Recent Features
D.C.'s Dumbarton House Reduces its Carbon Footprint with Purchase of Carbon Offsets from WGES (Dec. 30, 2011)


U.S. EPA Honors the District of Columbia with the Green Power Community of the Year Award (Dec. 9, 2011)


WGES Receives Prestigious Green Power Supplier of the Year Award (Nov. 18, 2011)


WGES Selected to Supply 1.5 Million Megawatt Hours Per Year to the Baltimore Regional Cooperative Purchasing Committee (Nov. 14, 2011)

WGES and Kent County, Maryland Announce 1.58 Megawatt Solar Project (Nov. 4, 2011)


EPA Recognizes Panera Bread of Maryland as a Top Retail Green Power Purchaser (Oct. 28, 2011)

Our New Wind Power Partners
Green Power Leadership Award Winner - U.S. Department of Energy

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
Prices Rise for the First Time in Two Months on "Shut-in" News
Week in review for period of Jan. 20 - 26, 2012

Is the downward trend over? For the first time since December 1, 2011, both natural gas and electricity prices have made upward moves. For this seven-day report period, the 12-month average price for natural gas on the NYMEX rose 10%. The 12-month average price for peak power on the PJM rose 4%.

Three variables deserve some credit for this upward move in prices: the economy, the storage fields, and production.

First, the U.S. Commerce Department announced that the economy was doing better than expected. During the fourth quarter of 2011, the U.S. gross domestic product grew at a 2.8% annual rate, which was the best growth experienced in one-and-a-half years.

Second, the natural gas storage withdrawal was much higher than expected. The U.S. Energy Information Administration (EIA) reported the largest withdrawal so far of this winter season. We saw a triple-digit withdrawal of 192 Bcf., which was even larger than the five-year average of 173 Bcf.

Third, but most significantly, we saw a big name producer announce a "shut-in." On Monday, Chesapeake Energy announced it was reducing its dry gas drilling activity by 50%. The CEO of Chesapeake Energy said that "[a]n exceptionally mild winter to date has pressured U.S.natural gas prices to levels below our prior expectations and below levels that are economically attractive for developing dry gas plays in the U.S."

Are prices at the bottom? Will weak prices prompt more producers to shut-in their gas wells? For now, prices are trading at very attractive levels. This is still a great time to look at the early renewal strategy.

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