Natural Gas Prices

The value chain of the gas industry consists of oiland Hawaii pays the highest price. During winter, the
and gas exploration, drilling, gas processing,major concern is the gas bill for heating homes. There
transmission and distribution, and the final end usersare various factors affecting the price of natural gas.
such as residences and industries. After three yearsA weak production or a disruption in the production
of stable residential gas expenditures, the forecastcould send the prices upwards. For instance, the
for this year indicates a rise of 40 percent.The pricehurricanes Katrina and Rita have caused production
components of natural gas are production costs,operations to shut down.Similarly, there are other
processing costs and the transmission costs. Therefactors such as high demand, high import costs and
are number of players such as the oil and gasinadequate inventories resulting in high prices for gas.
companies, refineries, and long distance and localHigh demand comes from severe weather conditions,
transmission companies. According to the Energysuch as prolonged cold winters and hot summers.
Information Administration, the production cost isShortages of other fuels used in industries also force
almost 50 percent of the price. The average wellheadindustries to convert to natural gas heating
price is 5.46 dollars per thousand cubic feet in 2004.systems.There are a number of ways prudent
The end user price varies according to the type ofresidential users could reduce the price. To start with,
customers. The industrial price is approximately $6.50energy audits could be done to understand
and the residential prices are $10.50.The residentialenergy-saving opportunities. Alternatively, customers
prices vary among states due to the proximity ofcould shop for low priced companies. Some states
the wellheads, number of pipelines traversing thehave subsidy programs for low-income groups.
state and competition. Texas has the lowest price