Why are energy costs on the rise?
There are a lot of questions right now around the reasons for rising natural gas prices, and what is generating the sizeable jump in cost.
Many factors are at play, including—but not limited to—the following:
- Return of economic activity following pandemic shutdowns
- Increased usage of natural gas to generate electricity across the U.S.
- Increased U.S. demand for natural gas (up 3% in 2021–2022) due to colder temperatures and a slight increase in industrial demand
- Higher production costs due to inflation and disruptions from COVID-19
- Natural disaster events, like hurricanes in the Gulf of Mexico
- Geopolitical events—like the war in Ukraine—are increasing demand for U.S. liquified natural gas
- Natural gas pipelines are at full capacity and permitting of new infrastructure has been impeded by organizations and state governments that oppose natural gas
Overall, much like prices of other consumer goods and services, market forces—including storage levels, production rates, and basic supply and demand—have raised the cost of natural gas. While it remains the most affordable energy option available, the resource’s increased price affects all of us, and National Fuel is committed to helping our customers through this challenging time.
Find our list of cost savings programs and tips here.
Get the latest information on how you can use natural gas to save energy, money and our environment.