Home heating sticker shock natural gas price increased by 180%

Natural gas prices, the most common way to heat homes and the main source of electricity, have risen more than 180% to one million British gallons in the last 12 months to $ 5.90. Natural gas has not been so expensive since February 2014.

The danger is that early winter or very cold temperatures will force families to put out the fire. That could further reduce the country’s natural gas reserves and even raise prices.

Robert Yugger, the future director of energy at Mizuho Security, says: “If we have frost in the past, it can be ugly. It can be ugly. ”

Inflation will reduce the Federal Reserve’s support for the economy and force some moderate lawmakers to question the importance of White House spending plans. Meanwhile, the recession has caused international investors to worry about economic growth and rising prices.

“This is enough even in normal times,” said Robert McNilley, president of the consulting firm Rapidan Energy Group. But now there is a general concern about inflation. ”

According to the US Energy Information Administration, half of American households use natural gas for home and water heating.

“Consumers of natural gas are not paying the daily prices for the natural gas we see in the headlines,” said Jack Rubin, a spokesman for the American Gas Association, which represents natural gas utilities such as Con Edison.

AGA emphasizes that its members lock up prices and buy gas through long-term contracts that protect customers from some volatility. Rubin added that utilities will increase winter supplies by storing gas purchased months ago.

‘Tragic’ gas crisis in Europe

Natural gas conditions are much worse overseas: Europe and Asia are overshadowed by natural gas prices and shortages, closing factories and economic recovery.

“It’s a tragedy,” said McNelli.

Rising natural gas prices have forced a major US fertilizer producer in the United Kingdom to shut down. Fearing food shortages due to carbon dioxide emissions, the UK government intervened to secure the US company.
The country’s impact on the United States is diminished by the fact that the country is the world’s largest producer of natural gas. In fact, the United States is a major exporter of natural gas.

“There is no way to run out of natural gas. We will live. ”

Supply cannot meet demand

So why are natural gas prices so high? The central problem is the inability to produce natural gas when economic activity slows down. This means that demand will return faster than supply, forcing prices to rise.

After years of losing money, natural gas producers have been careful about increasing production. According to the U.S. Energy Information Administration, storage rates are below normal in the lower 48 U.S. states.

Throughout the summer, the demand for heat waves is growing across the country. Warm weather raised air conditioning and demand for electricity.

Natural gas is the leading source of fuel for the grid, providing 40% of the country’s utility capacity.

The situation is exacerbated by unplanned disruptions in Norway and Russia, as well as offshore oil and gas production in the Gulf of Mexico.

“A Full Storm”

US supplies have weakened further due to high demand from overseas prices. Exports of U.S. liquefied natural gas are expected to reach 9.6 billion cubic feet per day this year, up 48 percent from a year earlier.

And then there’s Wall Street and the role of other big money traders on Wall Street. Speculators estimate that storage rates are unusually low, and have sought to increase natural gas prices.

To take full advantage of this, it was a perfect storm. He said the list is Nirvana.

When service stations dry up, the UK puts it on standby to deliver fuel

The good news is that some people on Wall Street are arguing that natural gas prices are rising.

Last week, the World Bank’s “Natural Disaster Reduction Premium” for “Natural Gas Prices” has reached “extreme levels.” The bank expects natural gas prices to fall in the last three months of the year and fall next year.

Power transfer will not be easy

The rise in natural gas prices is coming at a critical time for governments around the world. Not only are they dealing with high inflation, world leaders are also trying to move away from fossil fuels.

Environmental groups want to block oil and gas reductions to prevent emissions. At least four countries in the European Union Plans to halt domestic fossil fuel production by 2050
President Joe Biden has set a major goal of 2035, which calls for a dramatic transition from natural gas and coal to solar and wind.

Today’s high energy prices are a sad reminder of how addictive the world economy is to fossil fuels – and how hard it is to get rid of them.


Leave a Comment