Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 20
We Know Energy
May 18, 2012 Energy Update
In this Issue
Editor's Note
Prices Rise For the Fourth Straight Week
Spotlight on Carbon Offsets
ASAE Partners with APPI Energy to purchase WGES CleanStepsŪ Carbon Offsets
Natural Gas Fundamentals
Natural Gas Storage: Surplus Contracts Again. Data Released May 17, 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 and Sterling Planet Donate $126,000 to the Chesapeake Bay Foundation’s Carbon Reduction Fund; Help Plant 1,500 Trees in Frederick, Md. (April 27, 2012)

WGES Provides Green Energy Products to Mandarin Oriental, D.C. (April 20, 2012)

WGES Renewable Energy Products Are Now Green-e Energy Certified (April 6, 2012)

New MSN Video Features a WGES Customer's Green Power Commitment (March 23, 2012)

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)

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 Fourth Straight Week
Week in review for period of May 11-17, 2012

The Bulls are controlling the natural gas and electricity markets. For the fourth straight week, the natural gas and electricity commodities experienced another price increase. For this seven-day report period, the12-month average price for natural gas on the NYMEX rose 1.7%. The 12-month average price for peak power on the PJM rose 2.6%. Over the past three weeks, the 12-month average price for natural gas on the NYMEX has risen 21% and the 12-month average price for peak power on the PJM has risen 8.8%.

The shrinking natural gas storage surplus is one factor placing upward pressure on prices. As you may recall, the natural storage surplus grew to record levels last winter due to unseasonably warm weather. NOAA reported that it was the fourth warmest winter ever in the United States. March was the warmest on record, and April 2012 was the third warmest ever. The demand for space heating never materialized and the surplus grew.

However, we are beginning to see a reversal in the storage position and this fact is spooking the markets for now. For the third week in a row, the natural gas storage surplus shrunk. Since March 8, 2012, the natural gas surplus over the five-year average has shrunk from 51% to 41%.

The big question is why is the gas bubble shrinking? Is it because producers are shutting-in their wells? According to Baker Hughes, the active natural gas rig count is now 598 rigs, which is the first time since 2002 that the rig count has dropped below 600 rigs. Is it because demand is growing? As we've reported previously, many coal fired power plants are switching over to natural gas and are thus driving up demand for natural gas.

All eyes are on the gas bubble. If we have a hot summer and the gas bubble continues to shrink, we may see more upward pressure on prices.

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