As Natural Gas Prices Continue to Increase, Glass Companies Feel the Impact

The cost of natural gas is continuing to increase and it shows no signs of slowing. According to the Energy Information Administration's (EIA) July 10 Natural Gas Weekly report, natural gas prices surpassed historical norms, exceeding $11 per MMBtu at trading locations throughout the lower 48 states, with the exception of Rocky Mountain market centers. In addition, the EIA expects the high price of natural gas to increase further by the end of the year and into 2009. Likewise, the EIA reported that the amount of natural gas consumed for space cooling was particularly high for June, which registered cooling degree-days that were 23.5 percent above normal. For 2009 the EIA expects residential and commercial sector consumption to be relatively unchanged from this year, while natural gas consumption for electricity generation is expected to increase by 3.2 percent.

Natural gas consumption on the industrial side is also expected to increase. The EIA is projecting it to rise by 1.6 percent this year and by 0.6 percent in 2009. With such high prices many companies, including float glass produces, are feeling the impact.

"Natural gas is a significant part of our costs and we have seen its price increasing steadily for months. This not only affects our production costs, but we are seeing increasing costs from our suppliers and vendors who are all implementing some type of energy surcharge to help offset their increasing energy costs," says Serge Martin, vice president of building products for AGC North America. "Energy surcharges are also impacting our primary glass customers as these costs continue to rise. Surcharges and increased costs, however, will not solve these concerns. The industry needs to continue to focus on more energy reduction and energy efficiency initiatives to help reduce these impacts and correspondingly improve the environment."

CLICK HERE to read the EIA's Natural Gas Weekly report.

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