Love or hate fracking, most New Jerseyans share in lower natural gas bills

Shale gas hydraulic fracturing, colloquially called fracking, is scorned by environmental activists, but there’s no denying New Jersey natural gas customers have enjoyed the fruits of the technology.

Public Service Electric & Gas cut bills this winter by around five percent, lifting total cuts in the last two years to 35 percent. New Jersey Natural Gas, South Jersey Gas and Elizabethtown Gas Company have done likewise.

"The shale reserves in the Marcellus, in our backyard, are huge," said Kathleen Ellis, chief operating officer of New Jersey Natural Gas. "There is no arguing that the price of gas, because of increased supply, is good for our customers."

An analysis by the AARP Public Policy Institute of heating costs for seniors found natural gas customers will average $542 to heat their homes this winter, compared with $2,675 for those using fuel oil.

Those using electric heat should average around $468. That’s because while oil prices rose in recent years, electrical prices are tied to gas because of gas-fired power plants.

State officials aren’t shy about giving credit to shale gas either: when the Board of Public Utilities announced rate cuts this summer, it pointed to a new supply line—and to shale gas produced in nearby states such as Pennsylvania.

"The development of Marcellus shale has allowed New Jersey utilities to tap into natural gas reserves locally, resulting in lower delivery costs and savings for New Jersey ratepayers," said the BPU statement.

"There’s been a downward pressure on price due to greater levels of production. It’s basically a supply and demand thing," explained Amy Sweeney, a natural gas expert for the federal Energy Information Administration.

Sweeney said shale gas production flowed faster than the government reports tracking it, the most recent of which covers 2009.

"Back then it was 13 percent of supply," Sweeney said. "It very well could have doubled by now. That’s the sense that we’re getting from industry sources."

The federal government projects that by 2035, 47 percent of gas produced in the U.S. will come from shale sources.

That increased production is especially beneficial to New Jersey residents because the state has one of the highest concentrations of natural gas users in the country, according to the BPU.

The bottom line: 76 percent of New Jersey homes heat with gas, compared with 12 percent using fuel oil and kerosene and 11 percent that use electricity, according to Census Bureau data.