Natural-gas prices in the United States will have trouble topping $2 for a thousand cubic feet between now and 1998, according to projections by Jofree Corp., a widely used gas industry consulting firm.
"We see very little growth in gas prices. There's enough gas - and gas can be produced cheaply enough - that prices are not going to move significantly," Jofree President Carol Freedenthal told a conference here this week, organized by the Gas Daily newsletter and the Fuel Managers Association.Mr. Freedenthal rejected the view held by many in the gas industry that prices will trend upward in the next few years because of reduced gas production in the Gulf Coast states, a traditional supply source for much of the gas used in the United States.
He said Jofree's projections are based on a number of factors, including greater efficiency of drilling rigs, lower drilling costs, a high and climbing success rate for gas wells due to new technologies, and more efficient markets.
Any upward move in gas prices will be offset by increased drilling and production, as well as a shift by electricity generating companies toward using more coal, Mr. Freedenthal said.
Commenting on the less-than-expected growth in gas usage by power generators in the last few years, he said the stability of coal prices versus the volatility of day-to-day gas prices has been a strong incentive to keep using coal.