Tuesday, March 10, 2009

Natural Gas Prices And Emissions Prompt Installations

In February, the Energy Information Administration, which is the official energy statistics from the U.S. government, projected a 2.7 percent decline in U.S. real gross domestic product (GDP), which would trigger decreases in domestic energy consumption for all major fuels.

The downturn is also contributing to a decline in natural gas consumption, particularly in the industrial sector, which has led to lower natural gas prices. The Henry Hub natural gas spot price is projected to decline from an average of $9.13per thousand cubic feet (Mcf) in 2008 to about $5 per Mcf in 2009. However, it is projected to increase in 2010 to almost $6 per Mcf.

Specifically, while consumption growth in 2010 remains largely dependent upon the timing and pace of economic recovery, some projections estimate a 2.2 percent growth in the electric power sector, combined with slight growth in the residential and industrial sectors in 2010. Increased consumption, combined with a continued decline in drilling activity (currently, there are only 970 working rigs), will likely cause significant increases in demand.

In addition, more public facilities are expected to make moves toward natural gas solutions this year. In February, Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid released a letter asking the Capitol Architect to switch the Capitol Power Plant from coal to 100 percent natural gas by the end of 2009.

Since manufacturing plants are currently saving money on natural gas prices, the best time to retrofit boilers and improve efficiency might be right now, prior to natural gas increases next year. In addition to meeting the definition of best available technology, Benz Air Engineering solutions successfully exceed all federal emission guidelines.

Many solutions qualify for rebates, including up to 50 percent of the installation cost. Some projects may qualify for additional funds under the terms of the federal stimulus package.

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