Energy analysts say California utility customers could see a temporary boost in their natural gas bills in the wake of Tuesday’s terrorist attacks after a summer of low prices.
Though the nation’s power grid and pipeline distribution system were not disrupted, the possibility that the United States will retaliate sent prices for crude oil up $2 to $3 on European futures markets Wednesday morning. U.S. markets remained closed.
But, even if prices rise, analysts expect the hikes to be short-lived.
“I personally think any kind of run-up in oil prices or natural gas prices here domestically would just be in the short term, unless there was an extended retaliation in a Middle Eastern country,” said Mark Easterbrook, an energy analyst for Dain Rauscher Wessels in Dallas.
Easterbrook predicted any rise in energy prices could return to previous levels within a week because the vast majority of the nation’s natural gas supply is produced domestically.
The Independent System Operator, which manages California’s power grid, has been checking in with oil refineries, energy sellers, hydroelectric dams and power distributors to ensure operations were running smoothly.
The ISO had not reported any problems, said California Energy Commission spokeswoman Claudia Chandler.
The state’s largest utility, Pacific Gas and Electric Co., had not yet noticed price spikes for natural gas or electricity, spokeswoman Christy Dennis said Wednesday.
Natural gas is the primary fuel for most of California’s hundreds of power plants. Soaring fuel prices last winter drove electricity prices to more than nine times their previous levels.
Prices have fallen steadily over the summer as conservation and cool weather lowered demand and natural gas sellers boosted supply with increased drilling and underground storage.
Chandler said natural gas sellers around the state have stowed away 10 percent more supply in underground storage facilities than at this point last year, which would help guard against price shocks.
Easterbrook said electricity costs also should remain stable because the country generates most of its electricity from domestically produced fields such as natural gas, coal and renewable energy.