Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 12
We Know Energy
March 23, 2012 Energy Update
In this Issue
Editor's Note
Record Warmth Creates Record Gas Surplus
Spotlight on Windpower
New MSN Video Features a WGES Customer's Green Power Commitment
Natural Gas Fundamentals
Natural Gas Storage Update: Data Released March 22, 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
WGES' Parent Company Announces Plans to Jointly Develop 200-mile Interstate Gas Pipeline (March 2, 2012)


WGES Customers Show How Small Changes Make a Big Difference (Jan. 27, 2012)


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)


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
Record Warmth Creates Record Gas Surplus
Week in review for period of March 16-22, 2012

Although natural gas and electricity prices unexpectedly rose last week, prices were relatively flat this week. For this seven-day report period, the 12-month average price for natural gas on the NYMEX fell 1.4% and the 12-month average price for peak power on the PJM rose 1.6%.

At this time, natural gas and electricity prices are trading at a ten-year low, but are beginning to flatten out as you can see from the natural gas and electricity pricing graphs included in this newsletter. Is this the bottom?

Record warm temperatures and ample shale gas supplies get the credit for causing these low, attractive prices. This was the fourth warmest winter on record. According to the U.S. Energy Information Administration, "heating degree days nationwide were down 38.7 percent from normal."

Record warm temperatures have now spilled into the month of March. Because of the record warmth this month, we did not see a withdrawal from the natural gas storage fields this week. In fact, we saw an injection of 11 Bcf. into storage for this report period. This is only the fifth time since record keeping began in 1994 that we saw an injection during the middle of March. The gas surplus over the five-year average grew from 51% to 54%

Some analysts now argue that prices may be near the bottom. They point to the fact that natural gas prices are too low to motivate the drillers. As an example, Reuters reported that "the gas-directed rig count fell for the 10th straight week, down by seven to 663, its lowest since May 2002." Additionally, as we have reported in previous newsletters, big producers like Chesapeake Energy are beginning to shut-in their gas wells due to low prices.

It is very hard to know if this is the bottom. However, we may begin to see some upward pressure on prices if the trend of unusually warm weather continues into the summer and the natural gas-fired generators are needed to meet the seasonal air conditioning demands. Another factor that may place upward pressure on prices is if natural gas producers continue to shut-in their gas wells.

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