The nations 68 million natural gas customers have ridden a roller coaster of price swings in recent years. Whats happening?
Natural gas is increasingly popular for use by homeowners, schools, businesses, factories and electric power-generation plants because it is efficient, clean, and reliable. However, natural gas production has struggled to keep pace with demand. As a result, the market price of natural gas reflects an extremely tight balance between natural gas supply and demand. The wholesale price of natural gas was relatively stable during the 1990s around $2 per thousand cubic feet (Mcf) because natural gas supplies were in balance with demand. Since 2000, however, wholesale natural gas prices have risen and could average nearly $9 in 2005 due to a number of factors, according to the U.S. Energy Information Administration. Factors that have resulted in higher natural gas prices include increased use of natural gas to generate electricity, especially during this summers warmer-than-normal weather, disruptions to natural gas production caused by Hurricane Katrina and public policies that have made it
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