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As consumers we tend to understand the workings of Natural Gas less than we do the the other sources of energy that effect our lives. This from the EIA (go to EIA.gov site)
We know all about oil and what causes the ever upward swing in foreign oil prices.
Electricity is old hat. But natural gas, the energy source we tie our wagons to once we choose NGV's as a way of transport is far less well understood. For most people the level of understanding seldom goes beyond realizing that when winter sets in, heating bills go up. This text document may help you understand the ups and downs of your household heating bill... or the price of your cars fuel.
Natural gas is about 85% domestically produced, that means no middle east oil producer can hold you hostage at the pump when you put CNG in your vehicles tank. This makes pricing more stable and increases our national security, thereby decreasing our dependence on foreign oil.
The price of natural gas has two main parts (all cost components include a number of taxes):
Commodity costs — the cost to the natural gas itself.
Transmission and distribution costs — the cost of move the natural gas by pipeline from where it is produced to the customer’s local gas company, and to bring the natural gas from the local gas company to your house.
Click to enlarge »
Data for this figure »
More data »
Since the winter of 2001-2002, the natural gas commodity cost (the cost at the wellhead) has constituted more than half of the residential price. This relative cost pattern differs from earlier years in which the commodity cost was consistently less than half the total residential price. The large commodity cost share has resulted from increasingly high prices for natural gas during most of this decade.
The increasing price trend reflects market conditions that have included:
Average Natural Gas Prices in the United States
Between 1999 and 2008, the national annual average residential natural gas price more than doubled, from $6.69 per thousand cubic feet (Mcf) to $13.68 per Mcf. However, prices moved slightly lower in 2009 to $11.97 per Mcf. The national average price of natural gas is only part of the story, as the prices in individual States can differ greatly. These differences are often related to a market’s proximity to the producing areas, the number of pipelines in the State, average consumption per residence receiving service, and the transportation charges associated with them, as well as State regulations and degree of competition.
For example, based on 2009 data, residential consumers along the Atlantic Coast tend to pay the most, with prices ranging from $14 to more than $20 per Mcf. By contrast, States in the rest of the country benefit from either indigenous production or the presence of major trunk lines traversing the State. The availability of relatively abundant supplies results in prices between $9 and $15 per Mcf.
We know all about oil and what causes the ever upward swing in foreign oil prices.
Electricity is old hat. But natural gas, the energy source we tie our wagons to once we choose NGV's as a way of transport is far less well understood. For most people the level of understanding seldom goes beyond realizing that when winter sets in, heating bills go up. This text document may help you understand the ups and downs of your household heating bill... or the price of your cars fuel.
Natural gas is about 85% domestically produced, that means no middle east oil producer can hold you hostage at the pump when you put CNG in your vehicles tank. This makes pricing more stable and increases our national security, thereby decreasing our dependence on foreign oil.
The price of natural gas has two main parts (all cost components include a number of taxes):
Commodity costs — the cost to the natural gas itself.
Transmission and distribution costs — the cost of move the natural gas by pipeline from where it is produced to the customer’s local gas company, and to bring the natural gas from the local gas company to your house.
Click to enlarge »Data for this figure »
More data »
Since the winter of 2001-2002, the natural gas commodity cost (the cost at the wellhead) has constituted more than half of the residential price. This relative cost pattern differs from earlier years in which the commodity cost was consistently less than half the total residential price. The large commodity cost share has resulted from increasingly high prices for natural gas during most of this decade.
The increasing price trend reflects market conditions that have included:
- Colder-than-normal weather for long periods during some heating seasons
- Increasing use of natural gas for electric generation
- Production disruptions from hurricane activity in the Gulf of Mexico
- Fluctuating net import levels
- Record-high crude oil prices over much of the last two years
Average Natural Gas Prices in the United States
Between 1999 and 2008, the national annual average residential natural gas price more than doubled, from $6.69 per thousand cubic feet (Mcf) to $13.68 per Mcf. However, prices moved slightly lower in 2009 to $11.97 per Mcf. The national average price of natural gas is only part of the story, as the prices in individual States can differ greatly. These differences are often related to a market’s proximity to the producing areas, the number of pipelines in the State, average consumption per residence receiving service, and the transportation charges associated with them, as well as State regulations and degree of competition.
For example, based on 2009 data, residential consumers along the Atlantic Coast tend to pay the most, with prices ranging from $14 to more than $20 per Mcf. By contrast, States in the rest of the country benefit from either indigenous production or the presence of major trunk lines traversing the State. The availability of relatively abundant supplies results in prices between $9 and $15 per Mcf.
Like oil, the price for natural gas has been falling, so I would have expected PG&E's prices to be lower, not higher. Not too many people are going to be interested in buying CNG vehicles (and paying a premium to do so) if the price of natural gas is the same or higher than the price of gasoline.
What will they do?
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