Do you think Natural Gas prices are going to come down eventually?

[jnw]

I just did a little analysis, looking at my month natural gas bill for the past 4 1/2 years.  It's gone up 53% and staying there so far.   Much higher than inflation.  Have others here noticed a 50% increase in their natural gas bill?  (I have been on the AMP plan for years now -- average monthly payment.)

Btw, nothing has changed with respect to consumption, using a bit less actually: a year ago the attic was blown with fiber glass increasing it to R39 from R15 or so if I recall.

[Sibley]

Of course they will go down, just depends on what your time frame is. My gas charges have dropped slightly, but certainly not to where they were a year ago. Lower your usage if you can, or switch to other energy sources if its reasonable.

[Paper Chaser]

This chart is a couple of years old now, but demand is only forecast to increase:



As you can see in the left side of the chart that shows historical data, demand does fluctuate (and presumably prices follow), but the trend is that it's been increasing and will likely continue.

[reeshau]

If you are talking in the next year, I would say it's unlikely.  Europe came out of last winter relatively well, although fuel prices are up much higher than the US--but no blackouts or shortages.  Last winter was milder than expected.  But this is an El Nino year, so the winter is expected to be colder.  The EU will need to stock up again.

I am assuming that Russia's invasion of Ukraine is not resolved in this time.

[GilesMM]

Natural gas prices at Henry Hub are down about 70% from last year.

[seattlecyclone]

For the sake of our planet I hope the prices go nowhere but up. We need to transition away from this fuel and high prices will hasten that transition.

[lutorm]

For the sake of our planet I hope the prices go nowhere but up. We need to transition away from this fuel and high prices will hasten that transition.

Exactly. Although as the transition proceeds logically prices will drop because there will be less and less used. Hopefully that would be offset by carbon taxes, but I'm not holding my breath, at least in the US.

[TreeLeaf]

Personally - I don't think it will be dropping much in the next year.

Longer term? Who knows...

I think the longer term price is going to come down to demand and climate change regulations, imo. While we are well supplied with natural gas here in the states, we can only supply so much of the stuff efficiently and cost effectively everywhere on the planet, especially if we have to ship it.

And yeah - I am also in the camp of rooting for higher prices and carbon taxes for the sake of our planet. I would also love to see higher gasoline prices for automobiles, for the same reason.

[alsoknownasDean]

It'll likely come down as more supply finds its way into the system (the answer to high prices is high prices, etc). Although even after the war in Ukraine ends, Europe may not buy anywhere near as much gas from Russia as it did pre-war, that'll mean increased demand from other countries.

[trollwithamustache]

what state are you located in? Henry Hub may not matter depending on your city gate pricing situation.

[ChpBstrd]

Your bill is something different than the commodity price of gas. What does a chart of your consumption look like over that same timeframe?

If your consumption has risen dramatically, it may be a sign of a leak. Have a plumber pressure test your whole house.

If it's not consumption that has raised your bill, it seems most likely that a rate increase has passed through the regulatory process. The commodity price right now is not particularly high, but the recent peak could have justified a hike. To answer the question in the title, the price of NG typically falls prior to a recession.

[Laura33]

Yeah, I think it will come down eventually.  And I think it will go up eventually.  And then down.  And then up. 

Three big changes in the industry over the past oh 15 years:

1.  Development of, and then opposition to, fracking.  New drilling technologies created a huge glut of natural gas -- pipelines literally could not be built fast enough to handle it all -- and prices went way down.  Now there is a lot of opposition, and the opponents have succeeded in preventing the construction of new pipelines, which is constraining supply, thus increasing prices.

2.  Shift of demand to summertime in the south.  Used to be natural gas peak demand was in winter for heat -- and that's still the case.  However, the demand in the summer has grown significantly, to the extent that pipelines have changed where they send gas when in order to meet summer demand.  More demand over the course of the year = more need for natural gas supply = see item 1 above.

3.  The economy, in particular, the return of primary manufacturing to the US.  Natural gas is used both as a fuel for manufacturing operations and as a feedstock -- it is a basic chemical component in a some chemical manufacturing operations.  For a very long time, US manufacturers couldn't manufacture those basic chemicals cost-effectively in the US, because of the limited supply of US natural gas and the cost of importing natural gas from elsewhere.  The fracking boom actually re-patriated a lot of this basic chemical manufacturing back to the US, because even with the lower costs of labor and equipment and such abroad, the low cost of gas from the fracking boom made it cheaper to manufacture those materials here than to manufacture them in cheaper companies and transport them here.  Of course, that growth depends on there being a market for the chemicals that are manufactured, and the continued availability of cheap natural gas, so when the economy crashes or gas prices rise, so does the demand for natural gas for US chemical manufacturing. 

The short version is that NG price are driven by a host of macroeconomic, political, and local factors.  If you have a major cold snap in an area where natural gas supply is constrained by increased demand/no new pipelines, and your utility company is deregulated, then you're going to see a huge short-term spike in gas prices.  If you live in an area with plentiful supply and milder temperatures, you're likely to have lower and more stable prices.  If you're in an area with a regulated utility, you won't see wild swings in prices, but you'll still pay for those swings spread out over time, as the utilities have to cover their fuel costs.  There's just too much playing into the equation to make a single accurate prediction across the country

[Laura33]

For the sake of our planet I hope the prices go nowhere but up. We need to transition away from this fuel and high prices will hasten that transition.

Exactly. Although as the transition proceeds logically prices will drop because there will be less and less used. Hopefully that would be offset by carbon taxes, but I'm not holding my breath, at least in the US.

Long-term, sure.  But in the short-term, we also need to make sure that people in the north can heat their homes in winter and people in the south can cool them in summer.  Right now, we have three primary fuel options:  coal; oil; and natural gas.  Most power companies have equipment that is authorized to use coal and/or oil.  So the more expensive you make natural gas right now -- the more you restrict supply and cheer higher prices -- the more companies are going to shift back to coal and oil.  My power company has many old, major coal-fired generating plants.  I'd rather focus on getting rid of those first and shifting generation to natural gas, while we continue to develop better emissions controls and more renewable energy sources. 

Every single energy choice comes with some sort of negative environmental tradeoff.  Solar and wind are not effective without sun and wind, and they also kill birds and bugs.  Dams kill fish and change ecosystems.  Combustion sources increase airborne pollutants and affect climate change.  Nuclear has an extremely low failure rate but an extremely high health/environmental cost when failure does occur; it also generates waste that must be managed properly for thousands of years.

What we need in the US is a rational, logical energy policy that provides sufficient incentives for investment in lower-impact energy sources (such as solar, winds, and dams in appropriate places), that shifts generation over time away from things like coal and oil and, eventually, natural gas, and that does so in a way that does not create major disruptions or price hikes to consumers who need reliable energy sources, particularly when the weather is dangerous.  But our political system prevents that from ever happening, as politicians follow the party line, agencies are authorized by Congress to focus only on little pieces of the issues, and people and groups get wrapped up in the cause du jour.  There is simply no one with either the authority to or the interest in looking holistically at the costs and benefits of various approaches; we're too busy either denying that there's any harm at all or acting as though there's some tradeoff-free option out there.

[jnw]

Your bill is something different than the commodity price of gas. What does a chart of your consumption look like over that same timeframe?

If your consumption has risen dramatically, it may be a sign of a leak. Have a plumber pressure test your whole house.

If it's not consumption that has raised your bill, it seems most likely that a rate increase has passed through the regulatory process. The commodity price right now is not particularly high, but the recent peak could have justified a hike. To answer the question in the title, the price of NG typically falls prior to a recession.

As mentioned in my original post, consumption has gone down sleightly.  I'll make another graph showing price per decatherm which has gone up dramatically.

I am paying $7 more per month or so due to the winter storm a couple years back.  The local natural gas company didn't store enough and had to buy natural gas at like hundreds of times normal cost if I recall.   I think I'll be paying $7 more per month for the next 20 years due to their mistake.  I don't think it's fair but the state commission voted in their favor.

[ChpBstrd]

In that case it's time to take a hard look at going all-electric, or at least substituting some appliances like the water heater, dryer, and stove depending on which connections you have.

Using the Bank of Craigslist, you could probably arrange an even swap selling your used appliances and buying their used appliances.

[lutorm]

There was a Guy Raz podcast I listened to with a company that is pushing ground-source heat pumps for heating (and cooling) homes (https://dandelionenergy.com/.) This is already very common in some countries, like Sweden. What was interesting was that they claimed that switching a gas-heated home to using ground-source heat pumps could cut the cost to 1/5. I dunno what gas price they were counting on there, but if that's true then there's a lot of margin for gas prices dropping and the heat pump option still being cheaper.

[GrumpyPenguin]

Wholesale commodity cost is only one component of the entire residential natural gas bill.  Infrastructure costs for the entire network from wellhead to the home are increasing.  If any of the drive away from fossil fuels is successful in the coming decades, the infrastructure costs will be allocated to a decreasing customer base, thereby increasing their costs even more.  The volatile commodity costs in the short run make in impossible to predict whether it will go up or down the next several years, but I think prices will be increasing significantly in the next 1-2 decades.

[ender]

There was a Guy Raz podcast I listened to with a company that is pushing ground-source heat pumps for heating (and cooling) homes (https://dandelionenergy.com/.) This is already very common in some countries, like Sweden. What was interesting was that they claimed that switching a gas-heated home to using ground-source heat pumps could cut the cost to 1/5. I dunno what gas price they were counting on there, but if that's true then there's a lot of margin for gas prices dropping and the heat pump option still being cheaper.

The operational cost of geothermal is a lot lower yes - but you have to pay for/setup the system initially :)