Natural gas has reached its highest price in more than four years, a spike expected to hit consumers in their wallets just as winter weather begins.
The price of natural gas — which is used to heat nearly half of all U.S. households — has surged beyond market forecasts for the year, according to the U.S. Energy Information Administration.
A Nov. 23 spot check on the price of natural gas showed it to be at $4.70 per million British thermal units. The last time the price of natural gas reached that level was June 2014, according the U.S. Energy Information Administration.
The higher prices were spurred by lower temperatures that boosted the use of natural gas while there was little already in storage, according to the EIA. If colder temperatures keep up, households could end up paying around 5 percent more in heating costs this winter, said Bob Wilkens, University of Dayton associate dean of research who spent two decades working at Shell Oil Company.
“If we have an extended really cold period then it’s going to take stockpiles a while to replenish themselves,” Wilkens said. “It all depends on what mother nature throws at us.”
November was a colder month for the Midwest in 2018 than it typically has been the last 10 years, according to data from the National Oceanic and Atmospheric Administration. Despite the colder fall, the EIA is projecting the price of natural gas to drop in the coming months.
Though price spikes still occur, they tend to level out quicker than they did four years ago, the last time the fuel reached a similar cost, Wilkens said.
That’s due in large part, Wilkens said, to the expansion of the fracking industry in recent years. Fracking —which is conducted in parts of Ohio —is the process of using pressure to extract oil or gas.
J.P. Blackwood, spokesman for the Ohio Consumers’ Council, credited programs from gas utilities, such as Vectren, for shielding Ohioans from high costs by providing them lower-priced natural gas than is offered in other energy markets.
“While natural gas prices have recently fluctuated, Vectren’s standard choice offer remains a conservative approach to purchasing natural gas at a competitive price,” Blackwood said.
Just as prices were beginning to climb in October, Vectren, which delivers natural gas to homes in this region, predicted heating costs would be “affordable” this winter. If this winter’s weather follows a similar pattern to last year’s, that will likely mean heating bills around $75 a month on, according to Vectren.
“Gas bills continue to remain very affordable compared to historic highs we’ve experienced in the past,” said Colleen Ryan, president of Vectren Energy Delivery of Ohio said in a prepared statement. “More than a decade ago, customers saw five-month bill totals around $750 during the heating season.”
Even if prices continue to increase this winter, there are a number of ways concerned customers can cut down on their utility bills, said said Natalie Hedde, director of corporate communications for Vectren.
Vectren customers can set up a budget to pay an equal payment every month instead of a fluctuating bill and households of four people making less than $75,300 a year can apply for weatherization help from the gas delivery company. Ohio, along with the federal government, also offers assistance to pay utility bills for households of four making $43,925 or less.
“I think that it will still be a pretty affordable winter,” Hedde said. “However it’s important to remember in the state of Ohio customers have options.”