Natural Gas in the USA

Transcription

1 2012 Natural Gas in the USA Christopher Griffin, Jonathan Theriault, Colin Young (9:45) Babson College 12/3/2012

2 The authors of this paper hereby give permission to Professor Michael Goldstein to distribute this paper by hard copy, to put it on reserve at Horn Library at Babson College, or to post a PDF version of this paper on the internet. I pledge my honor that I have neither received nor provided any unauthorized assistance during the completion of this work Chris Griffin Jonathan Theriault Colin Young

3 Natural Gas in the USA By Chris Griffin Jonathan Theriault Collin Young Michael A. Goldstein Babson College Babson Park Massachusetts 2012 (Submitted on December 3, 2012)

4 Table of Contents Executive Summary 1 Background on Natural Gas Market...2 History 2 Volatility in price 2 Relationship with oil 3 New Technology - Fracking...4 Variables/Analysis of Each Variable...6 General Rule of Thumb 6 Price of Oil 6 Weather 7 Commercial/Residential Prices 8 Supply and Demand 8 Oil Rigs 9 U.S. GDP 10 Conclusion Exhibits...12 References...26

5 Executive summary: In our analysis of the US natural gas market we chose to focus on the factors and variables that affect the Wellhead price of natural gas. We looked at variables in the long-run as well as in the shortterm in order to determine their individual relevance to the change and volatility in price. We also looked at the US excess supply of natural gas in the beginning of 2012 and realized that it created a 13-year low in the Wellhead price. Our analysis hopes to depict the significance of individual variables and how each can be used to more accurately to predict a convenient supply of the alternative energy source. With the price of oil reaching new heights in 2008, and the recent gap between its price and the price of Natural Gas increasing to all-time highs, we hope to explain through our analysis the thought process of big digging companies and how they plan to adjust the supply of natural gas to restore its price to a more appropriate relationship to the price of oil. We hope to analyze variables such as temperature, US GDP, residential and commercial prices, oil prices, and the number of active oil rigs direct impact on the changes in the price of natural gas. We understand that predictions are almost never perfect and natural disasters such as hurricanes or earthquakes can drastically affect the results, but the correlation between such variables and price could potentially provide a template for predicting an accurate natural gas price. Finally, through our research we hope to show that the 2012 low in price is only temporary and that the US is going to adjust its supply in order to fall under the demand and restore the price of natural gas. With the gap between oil and natural gas prices so large, either the price of oil will be lowered, or the price of natural gas will have to rise. To maximize profit, we believe that big oil and gas companies will choose to lower their supply of gas in order to raise its price as opposed to lowering the price of oil and risking potential profit loss. We will proceed by performing single and multiple regression analysis to find which variable(s) affect price and how the price of natural gas can be accurately predicted. 1

6 Background on Natural Gas Market: History: Natural gas has been available as a source of energy for centuries, but the commercialization and transportation of the product was established in the United States in the 19 th century. Once the transportation of the gas became successful, many usages of natural gas were discovered such as using it to heat homes and operate appliances. Natural gas is now used in the manufacturing industry to power plants, heat boilers, and to also generate electricity. Natural gas became an increasingly popular form of energy due to the evolution of technology which has made transportation of the energy source increasingly more efficient. There are now over 6,300 producers of natural gas in the US, a low and alarming 518 processing plants, over 300,000 miles of pipeline, and 123 gas storage facilities in the US 1. Volatility in prices: Natural gas prices in the US have shown volatility throughout the last ten years. In turn, predicting the impact of its movement is not an easy task. Many variables have to be accounted for to precisely determine the market price. In 2012, natural gas prices fell below the $2.00 mark for the first time in ten years (currently $3.70 per MMBtu on Wednesday, November 28) due to a surplus of gas in a low demand economy. Within the last 6 years, gas drillers have been able to increase production by 30%, while the demand has increased a low 15%. This resulted in the all time low price of $1.89 per mcf (thousand cubic feet) 2 in April According to the EIA ( US Energy Information Association ) this low was not of major concern, as the demand was expected to go up within the next few months. This has proven true, as many of the major gas producers have switched their drilling programs away from dry gas to natural gas. The EIA has also witnessed, although not surprisingly, hotter than usual temperatures in the United States. At the moment, this is causing an excess in energy demand. The EIA also reported this summer,

7 that for the first time in the history of natural gas, natural gas fired power plants generated more electricity than coal fired plants. This is tremendous for the demand of natural gas because it is a more cost effective alternative source of energy than coal. We have also seen the development within big companies such as Fed Ex and UPS to move to natural gas powered delivery trucks. This should not only increase demand, but also force their competitors to do the same. 3 Relationship with oil: As compared to oil, gas is a lot cheaper. Forbes recently posted that The British Thermal Unit (btu) equivalent of one barrel of oil equals six thousand cubic feet of natural gas. Therefore, if gas at $3.00 per mcf were to be at energy parity with oil, then oil would sell for $ But WTI sells at $90 bbl. If gas does not become more expensive, oil will get cheaper. This scenario is not attractive to the producers of oil. With the difference between oil and gas prices at such extremes, the producers will continue to invest their money into drilling for gas liquids and oil, while shutting down natural gas rigs in order to allow the supply to fall under the demand, and therefore prices to rise again. 4 When natural gas was at $13.28, it simply was too expensive. Now at the $1.89 price, it is too low. This is the current scenario we are witnessing take place right now as the predicted and actual consumption of natural gas in 2012 exceeds the supply, while prices slowly start to rise to a comfortable position. Combining a decade low in gas rig counts, a decline in production levels by the suppliers, continuous switching from coal to cheaper and gas alternatives from major companies, hotter than normal summer temperatures and cold winters, multiple devastating hurricanes that have hit the US, and a national GDP on the rise, it is easy to understand why the US Natural Gas Wellhead price is rising. Predictions suggest that this will continue in the near future. New Technology: Fracking:

8 Hydraulic fracturing, more commonly referred to as fracking, is an effective means of increasing the supply of natural gas. The technologically advanced, albeit controversial, way of harnessing natural gas requires drillers to pump a mixture of ninety percent water, ten percent sand, and less than one percent chemicals some 7,500 feet below ground. 5 The high pressure is used to crack shale rock formations and extract the natural gas inside. Since the inception of fracking within the United States, drillers have gathered more than 600 trillion cubic feet of natural gas. Considering that this is enough to heat about 9 billion homes for one year, fracking has proved essential to the energy sector of the United States. 6 In 2008, unconventional natural gas production methods, such as fracking, accounted for only five percent of the United States domestic supply. 7 Unconventional natural gas production now accounts for twenty percent of the total domestic supply and will undoubtedly continue to play a larger role. Consequently, the price of natural gas has fallen from a high of around $10.80 per million BTUs to under $ Greg Roche, the Clean Energy Fuels vice president for infrastructure, states [Because of historically low natural gas prices] A trucker can save one third of his energy spend by switching to natural gas. President Obama also spoke on the issue saying, Trucks that you re making here at this [Clean Energy Fuels] plant run on natural gas, and that makes them quieter, it makes them better for the environment, it makes them cheaper to fill up. 9 Some of the well drilling and hydraulic fracking has slowed because demand has not been able to meet such a high production rate. The increase in the supply of natural gas has also lead to energy experts predicting that the US may soon be a net exporter of natural gas. The Yale Graduates Energy Study Group actually calculated that a 100 billion dollar consumer surplus was created for the year 2010 through shale gas production. At current consumption rates, North America s 4.2 quadrillion cubic feet of recoverable natural gas could cover a 175 year period. This type of high volume

9 production has helped decrease not only the price of natural gas, but the volatility of the price of natural gas. 10 In turn this has increased the United States leverage in the global energy market. Hydraulic fracturing has not been exempt from opponents who cite negative environmental effects from fracking. Many have declared that the consistent use of fracking has contaminated water, used too much of the water supply, emitted harmful gases, and even increased the possibility of potential earthquakes. The anti-fracking people of the world are mostly concerned that the chemicals used during fracking will somehow contaminate surrounding bodies of water. Others proclaim that the massive amounts of water needed to create a high pressure for fracking could be used for other productive means. 11 There is also concern that anytime natural gas is being harnessed through drilling that other harmful pollutants such as methane could escape into the ozone layer. 12 According to the US Geological Survey there is correlation between fracking and seismic activity. In 2012, the International Energy Agency also reported that the US s carbon dioxide emissions decreased by 450m tonnes. 13 With regard to the excessive us of water, the chairman of Chesapeake Energy recently stated that 90 to 100 percent of the water used is recycled during the fracking process. 14 Although there are plenty of conflicting reports that reflect both sides of the negative externalities argument, most on both sides can agree that there still needs to be more research to justify many of the anti-fracking claims. Despite many opponents citing negative global externalities, until these accusations become more concrete, the United States will continue to reap the immense benefits of fracking while continuing to pursue the most environmentally friendly techniques, such as water recycling, during operations fracking-wells-air-emissions-pose-health-risks-study-finds

10 Variables: General Rule of Thumb: As with any commodity, the price of natural gas is affected by numerous variables; and, as with any energy there are general rules of thumb for pricing. Natural gas prices tend to be 1/6 th to 1/10 th the price of crude oil, but over the past 10 years this assumption has not been a good predictor. 15 From the graph below we can see that from 2000 to 2005 natural gas moved closer to the price of crude oil, but since 2005 natural gas has made a rapid movement in the opposite direction. Price of Oil: Oil prices have a small, but measurable impact on the price of natural gas causing the price to increase during times of high oil prices and decrease during the times of low oil prices. 16 In order to prove this theory we ran a regression of these two prices based on the average monthly prices from 1992 to 2012(Exhibit 8). After running this simple regression we received an R-Squared value of 39%, which

11 we felt was fairly low. Based on the above graph and the notion that the general rule of thumb no longer weighs as heavily as it once did we ran two separate regressions based on the same data. We started by analyzing these two prices in the short run from 1992 to 2002 (Exhibit 10), which increased our R- Squared value to roughly 56.4%. Then we ran another regression from 2002 to 2012 (Exhibit 11), which yielded an R-Squared of 1.35%. It is clear that the recent trend away from the general rule of thumb over the past ten years has influenced our results. These two separate regressions confirmed that over the long run oil prices have generally been a good predictor, but recently the price of oil has strayed from this quality. Weather: Weather is a factor affecting the short term in the natural gas market. Demand for natural gas has been highly cyclical depending on the time of year and the changes from season to season. Generally demand for this commodity is highest during the coldest months of the year and lowest during the warmest due to the costs of residential and commercial heating. 17 In addition a warmer than average winter will generally cause this winter spike to be less pronounced. However, as summer temperatures begin to rise, natural gas prices during these warmer than average months also begin to rise. This is due to the need for natural gas to generate electricity the electricity used to power our air conditioners. So, generally speaking temperature has a two-fold effect on the demand and price for natural gas. However, the regression test we ran (Exhibit 8), which analyzed the average winter temperature per year versus average yearly natural gas price gave us results we did not hypothesize. We expected there to be an inverse relationship between temperature and the price of natural gas. However as you can see from the scatterplot the correlation is quite low. In addition to this graph the regression statistics gave us an R-Squared value of roughly 2.8%, rendering this graph fairly useless to our cause of temperature being a good predictor of the price of natural gas

12 Residential and Commercial Prices: Residential/commercial demand and price are generally a good predictor of the price of natural gas. Over the past twenty years roughly 66% of new homes and 57% of multifamily buildings being constructed used natural gas heating. 18 This adds to the demand for the commodity, which will in turn drive up the price. Together the residential and commercial sectors make up 36% of the demand for natural gas, so one would expect them to weigh heavily on the price of natural gas. With this in mind, we ran two separate simple regressions with the average residential and commercial monthly prices versus average monthly natural gas price from year 1992 to 2012 (Exhibits 1 and 2). Both regressions yielded fairly significant R-Squared values residential being 59.9% and commercial 86.1%. With both of these values and two scatterplots verifying this positive relationship we decided to run a multiple regression analyzing the price of natural gas compared to both of these predicting variables. The multiple regression did what we expected, raising the R-Squared value to 87.8% (Exhibit 6). Supply and Demand: Over the next twenty five years the production of natural gas is predicted to rapidly increase. This is due to the continued growth in the production of shale gas and recent discoveries in deep waters offshore. In addition to these two discoveries advancements in technology will make drilling for this commodity more efficient, therefore lowering the cost needed to extract it. These lower costs are enticing for other energy companies; so many firms may decide to enter this market, which will expand production. An increase in supply or a supply shock to natural gas will shift the supply curve to the right, and in turn we expect the price of natural gas to fall as a result. Based on our regression test (Exhibit 4), we see that there is somewhat of an inverse relationship, which is what we expected. As production

13 increases we see from out scatterplot that the regression equation becomes more relevant. However, we receive a low R-Squared value of 1.3%. We believe this is caused due to the skewedness of the data. We also believe that the consumption of natural gas should be a good fit to signify the demand for the commodity. As consumption increases we believe that the price of natural gas should also increase because firms will burn through their inventory more quickly causing them to charge a higher price. However, based on the scatterplot and R-Squared value of.1% (Exhibit 3) are theory does not seem to hold. Although the.1% is a an extremely low value we decided to run a multiple regression test analyzing the price of natural gas versus both the consumption and production of the commodity hoping to improve our results. An R-Squared value of 16.6% clarified our assumption. In the future we believe that this theory will begin to become more relevant as the production of natural gas increases and the premise of shortage of this commodity is not in question. Oil Rigs: The gas rig count has been highly volatile during the past year with a peak of 936 rigs in October 2011 to 437 rigs as of October At current prices dry gas drilling seems highly uneconomical due to current natural gas prices. However, natural gas production is likely to hit an all-time high for a second consecutive year due to the more profitable shale oil and shale gas liquids recently discovered. 20 The oil rig count reached a twenty five year high in August of 2012 with a count 1,432 rigs. Many companies who own oil rigs are also invested in gas rigs. With the current low price of natural gas many of these companies choose to solely operate on the oil side. As a result we expect an inverse relationship between the price of natural gas and the number of oil rigs. Meaning that as prices decrease the number of rigs should conversely increase. After running our regression we received an R-Squared of 1.23%, which was lower than we expected. However, the data was heavily skewed as you can see by the scatterplot. From the amount of 400 oil rigs on the plot shows somewhat of an inverse relationship as we expected Ibid 9

14 US GDP: Natural gas prices tend to vary with economic growth and technological progress. However, as GDP rises we expect the price of natural gas to increase as well. After running the regression we received an R-Squared value of 83.9% (Exhibit 12). This shows that GDP is a good predictor for the price of natural gas. This could possibly be explained by the heavy domestic reliance in such areas as the manufacturing sector. When GDP is increasing and the manufacturing sector is booming, natural gas companies can get away with charging a higher price. Natural gas is one of the most important energy sources in the US which allows the producers to charge a high market price, especially when the economy is expanding and manufacturers are looking to capitalize on the economic upswing. However, if price points become too high, consumers may look toward alternative energy sources. Conclusion: There is no perfect way to predict the price of natural gas. There is no perfect way to predict any market price. If there was everyone would be investing their money and winning big. The variables we analyzed conveyed both positive and negative results. However, there are also variables that we were unable to statistically analyze fully, such as weather. For instance, in 2005 hurricanes Katrina and Rita hit the gulf coast hard damaging many of the refineries in the area, which caused the price of natural gas to increase dramatically. Again in 2008 hurricanes Ike and Gustav hit the coast hard, which again shocked the price of natural gas, which reached an all-time high. Due to the unpredictability of these natural disasters it is only possible to use them to analyze the effects of the aftermath. However, since 2008 natural gas prices have declined and continue to remain below $5 per 1000 cubic ft. According to David Greely, an energy analyst at Goldman Sachs, producers typically need this $5 to breakeven and since September of 2010 this industry has seen prices consistently lower than this breakeven price. 21 New technology promoting greater efficiency and the new discovery of fracking should potentially lower the cost of production, thus allowing firms to re-enter the market. With the price of oil

15 so high, one wonders why the United States relies so heavily on the Middle East to supply our needs when we have a vast supply of natural gas on our home-front. We believe that until the United States becomes more reliant on natural gas vehicles (NGV s) the price of this commodity will continue to remain low. The United States currently ranks 17 th in the world (as of 2011) with less than 1% of the NGV s. 22 NGV s are fuel-efficient, environmentally friendly and offer a relatively low cost of ownership. With the cost of gasoline rising and continued concern of harmful emissions we believe that the US will begin to realize the importance of NGV and begin investing more heavily in them in order to supply the domestic market. This in turn will drive up the price of natural gas, thus increasing the amount of rigs and production, ultimately boosting our economy

16 U.S. Natural Gas Wellhead Price Exhibit 1: Natural Gas Price vs. Residential Price (Jan 1992 to Sep 2012) 12 Natural Gas Price (Wellhead) vs. Residential Price Residential Price Regression Analysis: U.S. Natural Gas versus Residential Price The regression equation is U.S. Natural Gas Wellhead Price = Residential Price Predictor Coef SE Coef T P Constant Residential Price S = R-Sq = 59.9% R-Sq(adj) = 59.7% Analysis of Variance Source DF SS MS F P Regression Residual Error Total

17 U.S. Natural Gas Wellhead Price Exhibit 2: Natural Gas Price vs. Commercial Price (Jan 1992 to Sep 2012) 12 Natural Gas Price (Wellhead) vs. Commercial Price Commercial Price Regression Analysis: U.S. Natural Gas versus Commercial Price The regression equation is U.S. Natural Gas Wellhead Price = Commercial Price Predictor Coef SE Coef T P Constant Commercial Price S = R-Sq = 86.1% R-Sq(adj) = 86.1% Analysis of Variance Source DF SS MS F P Regression Residual Error Total

18 U.S. Natural Gas Wellhead Price Exhibit 3: Natural Gas Price vs. Total Consumption (MMcf) in the US (Jan 2001 to Sept 2012) 11 Natural Gas Price (Wellhead) vs. Total Consumption Total Consumption Regression Analysis: U.S. Natural Gas versus Total Consumption in the US (MMcf) The regression equation is U.S. Natural Gas Wellhead Price = Total Consumption Predictor Coef SE Coef T P Constant Total Consumption S = R-Sq = 0.1% R-Sq(adj) = 0.0% Analysis of Variance Source DF SS MS F P Regression Residual Error Total

19 U.S. Natural Gas Wellhead Price Exhibit 4: Natural Gas Price vs. Production (MMcf)/ Gross Withdrawals in the US (Jan 1992 to Sep 2012) 11 Natural Gas Price (Wellhead) vs. Total Production Production (MMcf) Regression Analysis: U.S. Natural Gas versus Production (MMcf) The regression equation is U.S. Natural Gas Wellhead Price = Production (MMcf) Predictor Coef SE Coef T P Constant Production (MMcf) S = R-Sq = 1.3% R-Sq(adj) = 0.9% Analysis of Variance Source DF SS MS F P Regression Residual Error Total

20 Exhibit 5: Multiple Regression of Natural Gas Price vs. Total Consumption and Gross Withdrawals (MMcf) in US (Jan 2001 to Sept 2012) Regression Analysis: U.S. Natural versus Production and Consumption in US The regression equation is U.S. Natural Gas Wellhead Price = Production (MMcf) Total Consumption Predictor Coef SE Coef T P Constant Production (MMcf) Total Consumption S = R-Sq = 16.6% R-Sq(adj) = 15.4% Exhibit 6: Multiple Regression of Natural Gas Price vs. Commercial and Industrial Price (Jan 1992 to 2012) Regression Analysis: U.S. Natural versus Commercial P, Residential The regression equation is U.S. Natural Gas Wellhead Price = Commercial Price Residential Price Predictor Coef SE Coef T P Constant Commercial Price Residential Price S = R-Sq = 87.8% R-Sq(adj) = 87.7% 16

21 Natural Gas Price Exhibit 7: Natural Gas Price vs. Number of Oil Rigs (Millions): September 1992 September 2012 SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 241 ANOVA df SS MS F Significance F Regression Residual Total Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upp Intercept E Number of Oil Rigs Number of Oil Rigs Versus Natural Gas Price Number of Oil Rigs (millions) 17

22 Natural Gas Price Exhibit 8: Natural Gas Price vs. Average Winter Temperature (Degrees Fahrenheit): SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 90 ANOVA df SS MS F Significance F Regression Residual Total Coefficients Standard Error t Stat P-value Lower 95% Intercept December - February, Average Temperature Average Winter Temperature Versus Natural Gas Price Upper 95% Lower 95.0% Upper 95.0% Natural Gas Price Avg. Winter Temp. (Degrees Fahrenheit) 18

23 Natural Gas Price Exhibit 9: Natural Gas Price vs. Oil Price ($USD): September 1992 September 2012 SUMMARY OUTPUT Regression Statistics Multiple R 0.63 R Square 0.39 Adjusted R Square 0.39 Standard Error 1.6 Observations 241 ANOVA df SS MS F Significance F Regression E-27 Residual Total Coefficients Standard Error t Stat P-value Lower 95% Intercept E WTI - Oil Price E Oil Price Versus Natural Gas Price Upper 95% Lower 95.0% Upper 95.0% Oil Price 19

24 Natural Gas Price Exhibit 10: Natural Gas Price vs. Oil Price ($USD): Sept Sept SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 121 ANOVA df SS MS F Significance F Regression E-23 Residual Total Coefficients Standard Error t Stat P-value Lower 95% Intercept WTI - Oil Price E Oil Price Versus Natural Gas Price: Short Run Upper 95% Lower 95.0% Upper 95.0% Oil Price 20

25 Natural Gas Price Exhibit 11: Natural Gas Price vs. Price of Oil ($USD): Sept Sept SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 121 ANOVA df SS MS F Significance F Regression Residual Total Coefficients Standard Error t Stat P-value Lower 95% Intercept E X Variable Oil Price Versus Natural Gas Prices: Short Run Upper 95% Lower 95.0% Upper 95.0% Oil Price 21

26 Natural Gas Price Exhibit 12: Natural Gas Price vs. Annual US GDP in $ Billions ( ) Regression Analysis: Natural Gas Price versus GDP in $Billion The regression equation is Natural Gas Price = GDP in $Billion Predictor Coef SE Coef T P Constant GDP in $Billion S = R-Sq = 83.9% R-Sq(adj) = 83.6% Analysis of Variance Source DF SS MS F P Regression Residual Error Total Natural Gas Price vs. GDP in $ Billion GDP in $Billion

27 Exhibit 13: Supply/Demand graph of

28 Exhibit 14: Changes between oil rigs and natural gas rigs in the USA compared to last year. Rigs Fri, November 23, 2012 last week Change from last year Oil Rigs 1, % 22.83% Natural Gas Rigs % % Miscellaneous % % Rig Numbers by Type Fri, November 23, 2012 last week Change from last year Vertical % % Horizontal 1, % -3.55% Directional % -8.92% Source: Baker Hughes Inc. 24

29 Exhibit 15: Historical Prices vs. NYMEX futures and EIA forecasts. 25

30 References: -Chantrill, C. (n.d.). US Gross Domestic Product GDP History. Retrieved from -US Department of Energy. (2012, November 30). U.S. Natural Gas Wellhead Price. Retrieved from -US Department of Energy. (2012, November 29). Natural Gas Weekly Update. Retrieved from -Gorstenko, O. (2012, June 12). Shale Gas Brings More Complications: Notes on History of Natural Gas Price Forecast Development. Retrieved from -Natural Gas. (2012). Industry and Market Structure. Retrieved from -Finger, R. (2012, July 22). We're Headed to $8 Natural Gas. Retrieved from -US Department of Energy, (2012, November 28). "Petroleum & Other Liquids." Retrieved from -Enloe, Jesse. (2012, November 24) "Contiguous U.S. Temperature: December-February " Retrieved from -US Department of Energy. (2012, November 28). "Natural Gas." Retrieved from -US Department of Energy, (2012, November 30). "Natural Gas." Retrieved from 26

31 -US Department of Energy, (2012, November 30). "Natural Gas." Retrieved from -Brown, S and Yucel, M. (2007, February). What Drives Natural Gas Prices?. Retrieved from -The U.S. Energy Information Administration. (2010, May 11). Annual Energy Outlook 2010 with Projections to Retrieved from -NaturalGas.org. (2011). Industry and Market Structure. Retrieved from -Silha, J. (2012, October 5). U.S Natural Gas Rig Count Climbs Slightly from a 13-year Low. Retrieved from -Philips, M. (2012, April 17). Is Natural Gas Too Cheap to Drill?. Retrieved from -NGVAmerica. (2012). Natural Gas Vehicles for America. Retrieved from 27