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Natural Gas Producers – Meet the Country’s Ever-increasing Demand for Natural Gas

By Albiemorkel Subscribe to RSS | July 11th 2012 | Views:

Natural gas is an important source of energy and is used in different spheres of life. Found in deep underground rock formations, natural gas was created over time mainly by two mechanisms – biogenic and thermogenic. While biogenic gas is created by methanogenic organisms in mashes, landfills, bogs, and more, thermogenic gas is formed from buried organic matter. Natural gas undergoes processing before it can be used as a fuel. This is important to clean the gas and remove impurities to ensure that it meets the specifications of marketable natural gas. Many countries around the world produce natural gas. United States is the largest natural gas producer in the world, followed by Russia, European Union, Canada and Iran.

Natural gas industry forms an important segment of the U.S. economy. It provides clean burning fuel and valuable commerce to the nation. The exploration and production companies explore and drill for natural gas and transported it through the pipelines to the local utilities. These utilities then distribute and sell gas to the consumers. Natural gas prices are regulated by the state, according to which the local distribution companies can sell it to their customers. Marketers play an important role in facilitating the movement of natural gas from producers to end users. They are like middlemen between the two parties, facilitating the sale and purchase of natural gas. Thus, natural gas producers in the United States reach the consumers directly or through middle-men and provide necessary fuel to the economy.

United States has more than 6000 producers of natural gas, with companies ranging from large integrated producers to small operations. While large producers deal with worldwide operations and have interests in different segments of the oil and gas industry, most of the small producers have interest in a single well. The price of natural gas depends on the demand and supply of the product. If the demand is more, prices rise accordingly and producers increase their exploration and production capabilities to make most of the price rise. Increased demand pushes natural gas producers in the United States to increase the production level and benefit from increased price rise.

When natural gas companies face with falling gas prices, most producers cut down on the expenditures for new explorations and production activities, thus decreasing the productive capacity. Decreased prices again increase the demand for natural gas, resulting in an upward pressure on gas prices. For the existing producing wells, supply of natural gas remains the same and is not affected by the changes in price. Producers do not stop their exportation activities or shut down oil wells when the prices are low as it can be difficult to restore the well’s production once it is halted. If gas is produced along with oil, stopping gas production will affect the production of oil, which may be in demand. Therefore, most of the natural gas producers continue their operations irrespective of falling prices and increase their exploration and drilling activities when gas prices are high.

Albiemorkel - About Author:
Albie Morkel has worked with a leading oil and natural gas company in the United States. His writings are easy to understand and give genuine information about the natural gas producers of the country.

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