Due to weak U.S. natural gas prices natural gas exploration and production activity has been depressed the last few years. Natural gas reserves that were produced have not been replaced according to Spears, and drilling activities were curtailed as companies attempted to reduce costs and preserve cash flows. In normal times when reserves are depressed drilling activity quickly provides additional volumes that can be marketed to meet demand. Due to the mature nature of this basin he thinks that such activity may only reduce the ongoing decline of domestic natural gas reserves.
Some analysts are surprised how energy intensive the high-technology sector is proving to be.
Firms such as Sun Microsystems Inc. and Oracle Corp. use as much energy as a small steel mill. And virtually all the incremental power demand is being fulfilled by turbines that burn natural gas - an industry trend that has been going on for 10 years now. The use of natural gas is fed by the environmental benefits of the relatively clean-burning fossil fuel, and technological innovations that provided enormous gains in generation efficiency. And numerous natural gas fueled generating plants are being planned or are under construction. At Record Low Fill Levels Natural gas storage facilities have been of great assistance in developing distant gas markets by allowing the producer to move the gas closer to the end-use market in slow demand periods.