Natural gas liquids prices down in 2012 - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Natural gas liquids prices down in 2012

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Prices for liquids extracted from certain Marcellus Shale gas wells aren't faring much better than natural gas itself.

Natural gas liquid prices are higher than natural gas prices, but they were still lower in 2012. Many companies focused on shale gas drilling have moved operations into so-called "wetter" regions in order to take advantage of more valuable liquids such as ethane, butane, isobutane and natural gasoline.

The largest declines, according to the U.S. Energy Information Administration, were in ethane and propane markets, both lower-priced natural gas liquids. Isobutane and butane tend to track the price of oil, another natural resource from which they can be obtained.

"Spot prices for ethane and propane were near or below the bottom of the 2006-10 range in the second half of 2012," the EIA reported. "Propane's average 2012 spot price was almost 32% below its 2011 average price, and ethane's price was nearly 48% below. Average spot prices for normal butane, isobutane, and natural gasoline fell during summer 2012 as oil prices fell, and returned to near the top of the five-year range toward the end of the year, although they were still below 2011 averages."

According to the EIA, production and stocks of ethane and propane are higher, which depressed prices. The low prices spur companies to leave ethane in the gas stream (within safe limits) as opposed to extracting it and selling.

Many natural gas operators have felt the stress of low prices despite and because of depressed prices. Increased production and efficient extraction methods have kept natural gas prices at record lows in recent history.