Natural gas prices are not going to return to the $8-12 range anytime soon, but there will still be a lot of interest in the fuel, according to Texas Lt. Gov. David Dewhurst, who spoke Thursday at NRG Energy Inc.’s financial analysts conference in Houston.

Dewhurst said he did not see natural gas “rebounding to the prices we saw several years ago of $8 to $12 anytime soon,” although he quoted more bullish forecasts from Barclays Capital and Goldman Sachs, which he said forecast a gas price rebound to about $7.50 by the end of next year. More recently, even those price forecast more recently have come down, he said, “although Goldman is still slightly more bullish.”

“I personally think that we’ll unstack some of the stacked [idle] drilling rigs if there is more predictability,” Dewhurst said. “Let’s face it, every business wants predictability, and if that happens, you are looking somewhere in the neighborhood of $5 to $6 for gas — you can see future strips for gas prices have gone down for the next year or two from where they were in August and September, and future strips are in the $4-5 neighborhood now.”

Dewhurst said the $4-5 level remains competitively priced for industries that use natural gas. “It is still cheaper in a lot of ways than other hydrocarbons, so I think we will see a large demand for natural gas,” he said. In Texas, he says this varies with investor-owned utilities and geographical regions of the state.

In the Corpus Christi, TX, area, industrial demand for electricity has gone down 7% while commercial demand has actually gone up, and residential demand has stayed flat, Dewhurst said. He guessed that the Houston/Gulf Coast area probably had electricity demand that was down 10-20% for industrial loads and probably flat or slightly up for a little increase in residential.

“What’s my forecast for Texas? We were one of, if not the last, states to go into recession; I believe we will be one of the first ones out, and we’re already starting to see indications that we are starting to come out of the recession.”

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