Perfect Timing -- New York Enjoys Cheap Natural Gas

Just yesterday I posted the cost of electricity in New York state (very, very expensive) compared to the rest of the country.

Now, Bloomberg reports that -- thanks to the fracking revolution that some New Yorkers hate -- the city is about to enjoy really, really inexpensive natural gas. And what's more: the natural gas will arrive by .... drum roll... pipeline. Say it ain't so. Sent in by a reader (thank you):

Of all the weird stuff that must have happened in New York City on Halloween, perhaps the strangest thing occurred in the energy markets. On Oct. 31, natural gas prices in Manhattan were nearly 40¢ cheaper than in Louisiana. That hasn’t happened in eight years.

Consumers in the Northeast and New England typically pay some of the country’s highest prices for natural gas, especially in the winter, when heating demand spikes. During a cold spell last January, the price of natural gas delivered to New York City hit a record high; it cost more than gas delivered across most of Asia, where prices are often triple what they are in the U.S. [I find this amazing, actually.]

A pipeline that opened on Nov. 1 has effectively doubled the amount of natural gas flowing into Manhattan and steadily pulled down the island’s delivery price. In anticipation of the pipeline opening, traders on Oct. 31 drove down the price of gas delivered to New York, to $3.18 per million British Thermal Units, knocking 66¢ off the price in just 10 days. That compares to the Henry Hub benchmark price of $3.58 that’s set in Erath, LA.

An incredible story. Another huge "thank you" to a reader for sending this in.

The story does mention that not everyone is happy with the "new" pipeline:

Opponents also contend that the pipeline is dangerous because it could trigger an explosion beneath Greenwich Village. As evidence they point to a 2010 explosion in San Bruno, Calif., that involved a pipeline of similar size and pressure and killed four people. That pipeline was built in 1956 and was found to contain numerous welding defects.

Those nervous about the threat of exploding pipelines should worry about the thousands of miles of aging pipes under cities such as New York, not the new ones being built. “The safest thing to do is to replace these old pipes with more of these updated projects,” says BNP Paribas’s Teri Viswanath.