What Consumer Should Know. Typically, residential natural gas consumers have some basicquestions as the winter approaches: How much will natural gas cost and will enough be available this winter heating season? The answers to these questions ultimately depend on ever-changing conditions in national and local markets for natural gas. Since 1999, market conditions generally have fostered an upward trend in natural gas prices. The Energy Information Administration (EIA) expects that generally higher prices will continue through this winter. According to its Short-Term Energy Outlook (November 2007), assuming normal winter weather (and no catastrophic disruptions of supply), EIA expects that supplies of natural gas should be sufficient to satisfy all residential consumers’ needs (although there is always the possibility of isolated shortages caused by unusual regional or local conditions). EIA estimates that the average residential price of natural gas in the Midwest will be about 11 percent higher than last winter, while consumption is projected to be about 1 percent higher this winter. As a result, EIA expects that the total amount spent for natural gas consumed by the Midwest residential customer during this winter (October 2007-March 2008) will increase by more than 12 percent from the level of last winter. To understand the current high-price environment for natural gas, it is helpful to know some basics about the commodity itself and the marketplace. E-Mail: infoctr@eia.doe.gov
