Natural gas has dropped to its lowest price in more than a decade, powering an increase in the region of conversions to the alternative fuel source.
“I would say three quarters of the work now is (natural gas conversions), when usually it was a quarter,” said Eugene Adams, who owns a South Jersey heating company with a location in Pleasantville.
“It’s had a double impact because oil’s going up and natural gas is going down,” said Adams, of Eugene Adams Inc.
Booming production of natural gas across the country — and particularly in Pennsylvania — has dramatically increased supply, as energy companies use a controversial technique called hydraulic fracturing to reach untouched reserves.
This increased production has helped businesses and homes that use the fuel for heating and appliances, as well as companies that convert heating systems to use natural gas.
Folsom-based South Jersey Industries, the parent of South Jersey Gas, added nearly 3,600 customers last year primarily through conversions, the company said in its annual financial report in February.
South Jersey Gas, whose seven-county area includes Atlantic, Cape and Cumberland, expects about 4,500 more conversions this year, spokesman Dan Lockwood said.
“It’s probably the most critical point that that residents, consumers, even business owners look at when they’re looking to heat their homes is the price,” Lockwood said. “The price is playing probably the most critical factor in seeing the conversions and the switching.”
Anita Van Heeswyk, deputy mayor of Cape May Point, estimated more than one-third of the small borough’s residents are switching to natural gas from propane, heating oil and other fuels after the borough approved South Jersey Gas to install pipes in December.
As recently as five years ago, natural gas was thought to be in short supply in the U.S. Then engineers learned to drill horizontally into shale formations and inject millions of gallons of water, sand and chemicals to break open rock and free the natural gas trapped inside.
Increased concerns about water safety have led to the process being temporarily banned in several states.
Lawmakers in New Jersey adopted a one-year ban on so-called “fracking,” even though the state lacks the natural gas for which to drill.
Fracking, though, has proved efficient in drawing natural gas, and the country’s supply is growing so fast that analysts worry the country’s underground storage facilities could be full by fall.
On Wednesday, the futures price of natural gas declined to $1.98 per 1,000 cubic feet, its lowest level since Jan. 28, 2002, when the price hit $1.91. If the price falls to $1.75, it would be the lowest since March 23, 1999.
From October to March, households spent $868 on average on natural gas, a decline of 17 percent from last winter. Those savings have helped relieve the burden of rising gasoline prices. Households spent $1,940 on gasoline from October to March, a 7 percent increase from the same period a year ago.
The Associated Press contributed to this report
Contact Brian Ianieri: