Aug 21, 2009 -- Home heating expenses to be much cheaper this winter
CLARKONOMICS: In an era of bad economic news, there is one great side-effect that Clark has to report. What you pay to heat your home will likely be lower this winter.
Natural gas is the predominant method of home heating for most Americans. This clean-burning fuel is mostly domestically sourced and has a considerable oversupply of available inventory.
It's the complete opposite of what happened after Hurricane Katrina put a big crimp in supply and drove up the price. Four years later, the price has completely collapsed to around 28 cents per therm at wholesale. (Editor's note: Figure accurate as of Aug. 21, 2009.)
Meanwhile, the current supply is at such an all-time high that The Houston Chronicle reports sellers are running out of places to store their excess! At the same time, demand is down, particularly among industries forced to shutter factories because of the recession.
Natural gas has traditionally been used simply to heat homes, for cooking and for hot water. But with the air pollution problems associated with coal, more power companies have taken to building natural gas power-plants to generate electricity.
Now the power for your lights, TV and computer comes from natural gas at much lower prices vs. coal-generated electricity.
So if your power bill is not going down, somebody's ripping you off, according to Clark! Both home heating and normal electricity should be a lot cheaper now and throughout the coming winter.
Finally, Clark used to own a natural gas powered vehicle. But he sold it for a handsome profit at the height of T. Boone Pickens media push for natural gas powered vehicles. He intends to buy another one when prices on such vehicles become cheaper.