America’s most popular energy source – natural gas -- is making the news. SCANA Energy can keep you in the loop with the latest information.
We also offer educational materials so you can better understand how changes to the natural gas industry can affect you. Expand your knowledge and put it into practice with energy saving tips.
What You Should Know About Natural Gas Prices
Natural Gas Questions & Answers
Energy Education Resources
What You Should Know About Natural Gas Prices
The price of natural gas, whether high or low, is impacted by market conditions occurring on a national level. That's because natural gas is a commodity. Its price goes up and down according to supply and demand across North America.
Here's a brief overview of some of the factors that influence natural gas supply and demand - and ultimately price.
Weather
The demand for natural gas typically peaks during the coldest months and tapers off during the warmest months, with a slight increase during the summer to meet the demands of electric generators. The weather during any particular season can affect this demand for natural gas. The colder the weather during the winter, the more pronounced the winter peak will be. A warm winter may result in a less noticeable winter peak. An extremely hot winter can result in even greater cooling demands, which in turn can result in increased summer demand for natural gas.
Fuel Switching
Supply and demand in the marketplace determine the short-term price for natural gas. However, this can work in reverse as well. For some consumers, the price of natural gas can affect its demand. This is particularly true for consumers who have the capacity to switch the fuel upon which they rely. While most residential and commercial customers rely solely on natural gas to meet many of their energy requirements, some industrial and electric generation consumers have the capacity to switch between fuels. For instance, during a period of extremely high natural gas prices, many electric generators may switch from using natural gas to using cheaper coal, thus decreasing the demand for natural gas.
U.S. Economy
The state of the economy can have a considerable effect on the demand for natural gas in the short term, particularly for industrial consumers. When the economy is expanding, output from industrial sectors is generally increasing at a similar rate. When the economy is in recession, output drops. These fluctuations, which may accompany economic upswings and downturns, affect the amount of natural gas needed by these industrial users.
Gas Storage
There are peak seasons for high natural gas demand. This occurs mainly during winter months, which requires companies to store extra gas in the summer to accommodate peak time demand. The amount of gas stored affects the amount available as supply.
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Natural Gas Questions & Answers
What is the outlook for natural gas prices this winter?
Natural gas customers can expect to face significantly higher energy bills this winter –especially if winter weather is colder than it was last year. The following factors are driving the forecasted increase:
- Storm activity: even prior to Hurricane Katrina, natural gas production from the Gulf of Mexico, where Georgia receives most of its natural gas, was recovering from the effects of an earlier storm (Hurricane Ivan).
- The damage from Katrina and Rita created further disruption, which has resulted in additional price spikes.
- Recent history: natural gas reserve and production increases continue to struggle to keep pace with demand. This tight balance between supply and demand creates frequent and unpredictable price swings.
- Also, the natural gas market has a tendency to follow crude oil prices, which have also fluctuated significantly in recent months. In fact, crude oil prices exceeded $130/barrel following Hurricane Katrina.
- Electric generation demand: an increasing amount of natural gas is being used to generate electricity, particularly during the summer months when natural gas utilities are typically building their storage levels.
- Weather: of all the factors that drive prices, weather has the greatest impact. Colder than normal weather in the winter puts a strain on supplies and this usually drives up wholesale market prices, which can ultimately affect consumers. Plus, warmer than normal weather in the summer creates the huge electric generation demand mentioned previously.
Why is natural gas a popular fuel?
Because of its unmatched level of comfort, convenience and reliability, natural gas remains one of the most popular energy choices available. In fact, 52 percent of all heated U.S. households have natural gas heat. In addition, natural gas is a clean-burning, environmentally friendly option. SCANA Energy remains committed to providing customers with safe and reliable natural gas options that enhance their quality of life.
What can I do to conserve energy?
- Set your thermostat to 68 degrees or lower.
- Keep your fireplace damper closed.
- Wash clothes in cold water and use your dryer only when you have a full load. Keep lint filters clean.
- Have your heating system tuned up by a professional heating contractor.
- Open shades and drapes on sunny days to help warm the house. Close them at night to retain the heat.
- Add attic insulation, caulk around windows and replace old weather stripping around doors.
- Make sure your water heater is set to "normal" or "medium" setting (usually 120 degrees)
- Remember to turn off a kitchen or bathroom ventilation fan to prevent heat from being drawn outside.
- Keep doors inside your home open to keep air circulating and improve efficiency of heating system.
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Energy Education Resources
If you're watching the news these days, you are probably aware of what's happening with natural gas pricing. Here are some industry education resources to help keep you informed about the energy supply situation:
http://www.georgia.org/Business/Industries/EnergyAndEnvironment.htm
U.S. Department of Energy - Office of Energy Efficiency and Renewable Energy
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