Do increases in heating oil prices necessarily mean we also will see higher prices for natural gas?
To the extent that there is competition between heating oil and natural gas, which are substitutes for residential and commercial heating, their prices will chase each other. For example, with a tight natural gas market and high prices, an increase in demand for heating oil should be expected, which will, in turn, cause the price of heating oil to rise. In the next couples of years, the current constraints on natural gas supplies will be reduced because we will be importing more and more liquefied natural gas. In fact, we will be relying increasingly on natural gas from overseas, much as we do now for oil. Once new liquefied natural gas regasification facilities become operational along the Gulf Coast, the price of natural gas will decrease. Historically, the U.S. has gotten a large majority of its supply of natural gas from the Rocky Mountains, west Texas and the Gulf Coast. Roughly 25 percent of this country’s natural gas is produced in Texas and another 25 percent in coastal areas a
