Natural gas prices could exceed wood pellet prices soon

By Staff | August 22, 2012

A report issued by FutureMetrics LLC finds that the price of natural gas is expected to be higher than that of wood pellet fuel within the next three to eight years. The report, titled “An Analysis of the Future of Natural Gas Prices and Wood Pellet Prices: Natural gas will become more costly than wood pellets,” projects that cheap natural gas prices will end before 2020 due to rapidly increasing global demand in the transportation and power sectors and other market factors. Domestic natural gas producers are interested in exporting natural gas, in much the same way crude oil is shipped today, the report says, which could increase prices. The analysis also notes that exporting influences also have the potential to impact pellet prices, but that current economics show that wood pellets generate more profit when used domestically, which is likely to mitigate interest in exporting the fuel.