Today's natural gas price and supply constraints are the consequences of past decisions. Going back to year-end 2000, we saw the results of natural gas supply shortages. As storage dwindled, prices soared and consumers had to deal with the consequences. The initial phase of that supply-demand imbalance reflected the effects of low oil prices in 1998-1999 on capital availability to develop domestic natural gas supply. In 1999, these historically low petroleum prices resulted in capital expenditure budget cuts for domestic producers exceeding 30 percent. The natural gas drilling rig count dropped by over 40 percent at its lowest point. And, new wells failed to replace existing reserves.
展开▼
