ONG's monthly increase

[TheTravellers]

Posting this just to make sure this gets the widest exposure possible and to hopefully prod people into commenting. Got a letter a week or so ago about ONG raising the monthly rate by $7.73 ($5.71 for low income) in the first year and less in subsequent years (they don't say how much it will go down or how many years it will last). This is to cover the insanely ridiculous prices suppliers (or whoever) charged for their natural gas during the Feb deep-freeze. If you want to comment, do the following:

In person - Courtroom 301, Jim Thorpe Office Building, 2101 N Lincoln Blvd
Zoom meeting on 11/22/2021, 8:30 AM - www.zoomgov.com/j/16108903595, meeting ID 161 0890 3595
Dial-in meeting 11/22/2021, 8:30 AM - 1-669-254-5252, meeting ID 161 0890 3595
Email - PUDenergy@occ.ok.gov with "Attention: Public Comment PUD 202100079" in the subject line
Written:
Oklahoma Corporation Commission
PO Box 52000
Oklahoma City, OK 73152

[WheelerD Guy]

Posting this just to make sure this gets the widest exposure possible and to hopefully prod people into commenting. Got a letter a week or so ago about ONG raising the monthly rate by $7.73 ($5.71 for low income) in the first year and less in subsequent years (they don't say how much it will go down or how many years it will last). This is to cover the insanely ridiculous prices producers charged for their natural gas during the Feb deep-freeze. If you want to comment, do the following:

In person - Courtroom 301, Jim Thorpe Office Building, 2101 N Lincoln Blvd
Zoom meeting on 11/22/2021, 8:30 AM - www.zoomgov.com/j/16108903595, meeting ID 161 0890 3595
Dial-in meeting 11/22/2021, 8:30 AM - 1-669-254-5252, meeting ID 161 0890 3595
Email - PUDenergy@occ.ok.gov with "Attention: Public Comment PUD 202100079" in the subject line
Written:
Oklahoma Corporation Commission
PO Box 52000
Oklahoma City, OK 73152

The natural gas market is not like Target or Walmart. Producers don't set the price; it is a free market with buyers and sellers of the commodity transacting voluntarily. Demand was off the charts for obvious reasons, and a lot of wellheads and gathering infrastructure froze off which impacted supply.

As for the base increase, this is definitely preferable to paying the cost of gas upfront. Would have been looking at bills north of $2-3K for the average household. I would imagine this increase will stay on the bills for decades, allowing ONG to pay off the cat bonds.

[Rover]

With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G.

[TheTravellers]

With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G.

[jerrywall]

We absolutely should investigate if there was gouging and such going on at the producer/supplier level for natural gas. That being said, I accept, as a ONG customer, that I'm going to absorb the fuel costs, since they merely serve as a transactional provider getting the natural gas to my home. But unless ONG has some culpability (such as insufficient reserves, etc) I don't expect them to absorb the cost of the fuel increase.

[Rover]

We absolutely should investigate if there was gouging and such going on at the producer/supplier level for natural gas. That being said, I accept, as a ONG customer, that I'm going to absorb the fuel costs, since they merely serve as a transactional provider getting the natural gas to my home. But unless ONG has some culpability (such as insufficient reserves, etc) I don't expect them to absorb the cost of the fuel increase.

Yes, ONG isn’t the bad guy unless they were complicit in decisions of the supplier to gouge. Most likely had no control.

[TheTravellers]

So why is the consumer getting punished instead of it working the other way around and going upstream to punish the suppliers (who obviously price-gouged)? Oh wait, the consumer has no power or pull, business as usual....

[PhiAlpha]

So why is the consumer getting punished instead of it working the other way around and going upstream to punish the suppliers (who obviously price-gouged)? Oh wait, the consumer has no power or pull, business as usual....

No one price gouged. It’s a commodity and is priced by the market. Supply decreased massively due to wells and flow line/gathering systems in OK and TX not being set up to handle such cold temperatures for a 2-3 week time period. Lines froze causing supply to drop at a time in which demand rapidly spiked (almost historically spiked) and the market reacted. It sucks but that’s how commodity markets work. Fortunately the customers were mostly insulated from that in OK. For those in Texas that elected to take gas at the market price (good idea most of the time but you saw the risk during winter)…it really sucked.

[TheTravellers]

No one price gouged. It’s a commodity and is priced by the market.

So that's just the way it works? Sad and ridiculous. What about Rover's comment - "With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G."? Why aren't there predatory price controls? Is the consumer just stuck with whatever anybody/everybody decides to charge, with no oversight or control?

[PhiAlpha]

So that's just the way it works? Sad and ridiculous. What about Rover's comment - "With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G."? Why aren't there predatory price controls? Is the consumer just stuck with whatever anybody/everybody decides to charge, with no oversight or control?

Quit using the term “predatory.” It’s an inflammatory term that assumes something nefarious was going on and there absolutely wasn’t. In fact I have several friends that work for small operators who had everyone from engineers to landmen and office aids out in negative temperatures in a snow storm firing up blow torches and beating on lines with sledge hammers trying to get their wells back online so they could meet the utility demand. Things get more expensive when the demand increases…it sucks but that’s the way it is. There are some price controls on natural gas but that’s honestly beyond my level of expertise.

Also why the hell should producers/suppliers be punished? They are providing a commodity that they produce and encountered basically a once in a century event. The Force Majeure clauses in their midstream contracts cover supply interruptions that are out of their control due to acts of god like that. Natural gas prices have been so abysmally low since 2009 that it’s been very difficult to even break even producing it except for in certain areas. Consequently utility prices have been historically low for the last decade…complaining about a small increase after such low prices for so long is a bit comical. How easy we forget how expensive natural gas and electricity was prior to that time.

[PhiAlpha]

Between financing/capital issues and increased regulations coming out of DC (ESG regulations, attempted repeal of tax deductions, etc) high prices are going to be a thing for awhile for both oil and natural gas. It will filter down to the consumer.

“Sad and Ridiculous” is a funny way to describe it that assumes you as the consumer are guaranteed cheap energy or that it’s some right you are owed or something. While it would be great to say everyone deserves cheap energy…that’s not a right that the consumer is owed by anyone and we will all end up paying whatever the supply/demand market requires. Natural Gas, Coal and Nuclear energy are the cheapest sources around and the government is currently trying to eliminate all three of them. You can see what happened in the short term when natural gas supply was constrained…imagine what happens when all of those are reduced or eliminated. The prices we have now are only going to go up for the foreseeable future.

[TheTravellers]

Between financing/capital issues and increased regulations coming out of DC (ESG regulations, attempted repeal of tax deductions, etc) high prices are going to be a thing for awhile for both oil and natural gas. It will filter down to the consumer. While it would be great to say everyone deserves cheap energy…that’s not a right that the consumer is owed by anyone and we will all end up paying whatever the supply/demand market requires.

Nobody ever said anybody deserved cheap energy, just that ONG shouldn't screw every single customer out of hundreds or thousands of extra dollars for who knows how long because there is no framework in place for a situation like what happened in Feb, so the upstream companies just charge whatever they feel like and all the insane charges just go downstream until the customers pay? So what's going to happen during the next deep freeze (and there *will* be one) - we get screwed out of another $10/month for another who knows how many years? And this just keeps going on? Isn't this exact situation what the OCC and other regulating bodies are for or do they just rubber-stamp whatever the utility company wants? Also, the "predatory" part was Rover's initially, I just echoed his comment.

[PhiAlpha]

Nobody ever said anybody deserved cheap energy, just that ONG shouldn't screw every single customer out of hundreds or thousands of extra dollars for who knows how long because there is no framework in place for a situation like what happened in Feb, so the upstream companies just charge whatever they feel like and all the insane charges just go downstream until the customers pay? So what's going to happen during the next deep freeze (and there *will* be one) - we get screwed out of another $10/month for another who knows how many years? And this just keeps going on? Isn't this exact situation what the OCC and other regulating bodies are for or do they just rubber-stamp whatever the utility company wants? Also, the "predatory" part was Rover's initially, I just echoed his comment.

Again…you realize gas contracts are traded on a commodity market…right? Producers/upstream companies don’t just “charge whatever they want.” They sell it at whatever price the commodity market dictates…they don’t just go out and say “you’re giving me $10/mmbtu or you can F off”

Well if global warming is happening as dramatically as world leaders indicate…another freeze like that shouldn’t happen…right? LOL

[TheTravellers]

Again…you realize gas contracts are traded on a commodity market…right? Producers/upstream companies don’t just “charge whatever they want.” They sell it at whatever price the commodity market dictates…they don’t just go out and say “you’re giving me $10/mmbtu or you can F off”

Well if global warming is happening as dramatically as world leaders indicate…another freeze like that shouldn’t happen…right? LOL

Yes, but what about the rest of my post, which basically boils down to "Are end-of-the-line customers going to be screwed in the future every time this kind of thing happens (and it will, despite your comment) and there's nothing we can do about it"?

[PhiAlpha]

And you say you don’t think everyone deserves cheap energy yet in the same sentence say that ONG shouldn’t screw the consumer for charging a little more for their already very cheap natural gas. How do you reconcile those two statements?

Also, how is ONG screwing the consumer by adjusting the price to fit the market vs just eating it themselves? You realize that over the last 6 months, natural gas prices on the whole have been double/triple what they were from 2009-2020, right? It’s been a consistent increase from sub $2.00/mmbtu to $5-$6/mmbtu. I would guess that and forecasted higher prices next year is also factoring into their decision to increase prices.

[PhiAlpha]

Yes, but what about the rest of my post, which basically boils down to "Are end-of-the-line customers going to be screwed in the future every time this kind of thing happens (and it will, despite your comment) and there's nothing we can do about it"?

I mean yeah…it’s not a nationally regulated commodity anymore and hasn’t been sense the late 70s (like helium still is today). There are advantages and drawbacks to that. Advantage: on the whole, natural gas has been historically cheap for the last decade. Drawback: when an event like Snowpoclypse happens…the market dictates the price and it might get more expensive for the consumer for awhile.

[PhiAlpha]

I definitely think we’re about to see a massive spike in both natural gas and oil prices due to the lack of capital being invested, the exhaustion of tier 1 acreage, the amount of companies that went under, the amount of people who left the industry, and the fact that so much production was shut-in over the last two years. Add to that the fact that most big time offshore/international projects that generally take 5 years (from concept to production) to produce oil were shelved due to low commodity prices starting in 2015. If much of the ESG stuff the Biden administration is pushing goes into effect and if they repeal tax deductions for intangible drilling costs and others that incentivize new exploration/development…that’s only going to add to the supply issues. Eventually prices will reach the point that it incentivizes exploration again but it will likely take awhile for the increase in production to make up for it.

[TheTravellers]

And you say you don’t think everyone deserves cheap energy yet in the same sentence say that ONG shouldn’t screw the consumer for charging a little more for their already very cheap natural gas. How do you reconcile those two statements?

Also, how is ONG screwing the consumer by adjusting the price to fit the market vs just eating it themselves? You realize that over the last 6 months, natural gas prices on the whole have been double/triple what they were from 2009-2020, right? It’s been a consistent increase from sub $2.00/mmbtu to $5-$6/mmbtu. I would guess that and forecasted higher prices next year is also factoring into their decision to increase prices.

Let me be clear - I don't think everybody *deserves* "cheap" energy, standard price fluctuations and increases are normal and fine (I don't bitch when gasoline goes up or down), but this seems like it would be a lot more than just a little increase for a while, it's going to end up being most likely a lot of money spread over a whole bunch of years. And NG prices going up over the years is just like gasoline, that's fine, incremental adjustments are normal. This would literally increase my bill during summer months by 20% or so (less of a percentage in winter, still same dollar amount) every month for who knows how many months. That's not fine. But it fits with the way America's been going the past few decades - corporations rule, people have no power (pun not intended).

And thank you for the detailed explanation, still a ridiculous situation...

[PhiAlpha]

Let me be clear - I don't think everybody *deserves* "cheap" energy, standard price fluctuations and increases are normal and fine (I don't bitch when gasoline goes up or down), but this seems like it would be a lot more than just a little increase for a while, it's going to end up being most likely a lot of money spread over a whole bunch of years. And NG prices going up over the years is just like gasoline, that's fine, incremental adjustments are normal. This would literally increase my bill during summer months by 20% or so (less of a percentage in winter, still same dollar amount) every month for who knows how many months. That's not fine. But it fits with the way America's been going the past few decades - corporations rule, people have no power (pun not intended).

And thank you for the detailed explanation, still a ridiculous situation...

No problem! I wish I knew more about the marketing/utility side so I could give better (or at least more clear) insight but outside of dealing lightly with the marketing side and taking some classes on it at OU, I’m definitely not well versed. Maybe someone else on the board that works on the midstream or downstream/utility side could chime in with more detail. And sorry if my tone was a bit harsh…with all the “screw oil and gas” rhetoric that’s out there and that I deal with personally…sometimes it just comes out that way. Need to work on that.

[soonergolfer]

Yes, but what about the rest of my post, which basically boils down to "Are end-of-the-line customers going to be screwed in the future every time this kind of thing happens (and it will, despite your comment) and there's nothing we can do about it"?

I really don't understand your beef. I am guessing you don't complain when OnCue is charging 50% more per gallon than it was a year ago. The only difference is that you pay for one on a per month basis and the other when you need to refill your car. Both companies are dependent on the price of the commodity at the time. The price of NG has gone up from around $1.80 to almost $6 mmb in less than a year.

Prices are only going to go up. People need to realize that these wells decay over a few years. Most are producing at max output, so they will decay even faster. Thats not a good recipe when companies are drilling/spending half as much as they were in 2019-2020.

[PhiAlpha]

I really don't understand your beef. I am guessing you don't complain when OnCue is charging 50% more per gallon than it was a year ago. The only difference is that you pay for one on a per month basis and the other when you need to refill your car. Both companies are dependent on the price of the commodity at the time. The price of NG has gone up from around $1.80 to almost $6 mmb in less than a year.

Prices are only going to go up. People need to realize that these wells decay over a few years. Most are producing at max output, so they will decay even faster. Thats not a good recipe when companies are drilling/spending half as much as they were in 2019-2020.

“half as much” is generous lol

[TheTravellers]

Wow, just wow (not just about the headline, but all the other info in the article)...

Oklahoma Proposes Letting Gas Utility Charge A $1,400 ‘Exit Fee’ To Go Electric

[WheelerD Guy]

Wow, just wow (not just about the headline, but all the other info in the article)...

Oklahoma Proposes Letting Gas Utility Charge A $1,400 ‘Exit Fee’ To Go Electric

Not sure why anyone
Would want to swap
A clean-burning NG stove
For a vastly inferior electric unit
All of the Top Chefs prefer NG stoves

[Midtowner]

Not sure why anyone
Would want to swap
A clean-burning NG stove
For a vastly inferior electric unit
All of the Top Chefs prefer NG stoves

I prefer electric
because my house
produces its own energy
from the sun
and
I've already paid
for all of my energy
for at least the next
30 years.

[PhiAlpha]

I prefer electric
because my house
produces its own energy
from the sun
and
I've already paid
for all of my energy
for at least the next
30 years.

Gas for stoves is better
Now we cookin with voltage
Said no one ever