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The Results Are In - The Implications of the Election on Natural Gas and Electricity

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Chances are, you are either really happy or really disgusted this morning!  And I am certain that the first question on your mind after the election results came back was, “What is going to happen to natural gas and electricity?” Well inquiring minds, I am here to tell you: Nothing. At least in the short term. The market is currently governed by real economic factors such as weather, production, and storage inventory and not regulation from the EPA which has implications on electricity generation from coal.

Currently the factor idling many electricity generators that utilize coal is low natural gas prices, not regulation. Over the next several years though, this may not be the case as the natural gas market may be fundamentally different. For instance, we could see exports of natural gas that put upward pressure on price. If this were to occur and coincide with coal generation becoming economically unviable because of regulation, there will be notable upward pressure on electricity prices.  We’ll be keeping an eye on this, both long and short-term and will keep you up-to-date here and on Energy Insights. I am sure you are on the edge of your seat.

Posted: November 17, 2013