Amarillo, TX - The over production of natural gas is impacting the local market and area consumers.
47% of Texas's economy is dependent on oil and gas production. Since these two products are closely linked the lower selling rate of oil is affecting natural gas. Currently, natural gas is selling for $2.19 per million cubic foot. Executive Vice President of the Panhandle Producers and Royalty Owners Association, Judy Stark, said oil and gas are being sold at the lowest rate in several years because of the over abundance.
Stark said the low price affects our economy because the money buyers and consumers would spend on gas is being used elsewhere. "Anytime there is a reduction in people's over all cost of doing business or living they spend that money somewhere else," Stark said.
These low prices are greatly impacting consumers like those who use Xcel Energy. Xcel Energy's, Wes Reeves, said the company does not sell natural gas but they do use it to make electricity. "We buy a lot of gas to make electricity so it's definitely something that affects the consumer because when those gas prices are high the customers are paying that cost," Reeves said.
In their bills, customers are paying for natural gas because Xcel charges them for the electricity produced by natural gas. However, since natural gas is low, customers are seeing a change. "When natural gas prices go down they see that reflected in their electric bill, and it's a positive impact for customers," Reeves said. Prices have been so low that Xcel has refunded customers since November.
Despite the positive impact these prices have on consumers they are also negatively affecting producers. They are losing money because of the commodity's low selling price; however, that may change soon. Stark said in 2016 the U.S. is trying to increase the amount of natural gas they export by making liquid natural gas.