ACEEE Report Analyzes Effects of EE, RE on Natural-Gas Costs

A new report issued by the American Council for an Energy-Efficient Economy (ACEEE) analyzes the impacts of expanded energy-efficiency and renewable-energy investments on natural-gas prices, and updates ACEEE's seminal December 2003 analysis that demonstrated the price effect from reducing natural-gas demand.

The study, titled Impacts of Energy Efficiency and Renewable Energy on Natural Gas Markets: Updated and Expanded Analysis , finds that expanded use of energy efficiency and renewable energy could reduce wholesale natural-gas prices by 37% in the next 12 months, based on total consumption reductions of about 1%. By 2010, wholesale gas prices would be 20% lower, based on gas savings of over 4%. Energy efficiency alone could reduce prices by 25% in the next 12 months, based on savings of about 0.6%; in 2010, wholesale prices would be10% lower, based on energy savings of about 1.3%. The reduced consumption and price effects could result in over $33 billion in savings to natural-gas consumers in 2010, with a total investment of about $11 billion.

"While the current focus has been on oil prices, which are still not at record high levels in real terms, natural-gas prices continue at record real levels, over $1.50 per million Btu higher than they were just a year ago," said Dr. Neal Elliott, ACEEE Industrial Program director. "Unless we take serious action on gas demand, natural-gas prices are likely to remain high and volatile for the next few years because new supply resources are years away at best."

For other key natural gas research results and references, model programs, and an expanded discussion of the policy options, visit ACEEE's natural gas web page .

(Source: ACEEE news release, 4/28/05)