The demand for natural gas keeps rising, and the prices seem to keep pace. Numerous factors contribute to the cost of energy, but Alisha Dixon with CenterPoint Energy says 2005 was a rough year for natural gas consumers.
"We were already in a tight supply market at the end of the summer then we had three back-to-back hurricanes that knocked out much of the production in the Gulf of Mexico, so that created an even tighter supply. So natural gas prices reached record highs. What CenterPoint Energy does as a local distribution company, is we purchase gas from suppliers for our customers' use and we pass the cost on to the customers at the same price we pay. So when prices go up, we pay more and we pass those increases on to customers."
And when prices go down, that gets passed on to consumers as well. CenterPoint has lowered prices this month and has another adjustment scheduled six months from now. The short-term outlook reflects prices remaining pretty much where they are. But in the long-term, a fresh supply of energy could alleviate some costs. The U.S. should start receiving shipments of liquified natural gas, or LNG, around 2008. John Gass is the president of Chevron Global Gas and spoke to media at the CERA energy conference.
"When large supplies of LNG begin coming in to the country later in this decade, it's bound to have some impact on the price and it's anybody's guess, but our view would be yes, you'll see an impact on price, you'll see less volatility probably than we see today as the supply situation gets less tight."
But the global demand for LNG imports could keep costs high. The U.S. will compete with many other world markets for energy supplies and until supply matches the enormous and growing demand, prices will remain resilient. That's why Dixon says for now, it's up to the consumers to do as much as possible to conserve energy.
"I think in the short-term, there is no immediate relief in sight for volatile natural gas prices. And so consumers are going to have to be very savvy about conservation, energy efficiency, get on an average monthly billing program so you know what your bill roughly will be each month, you're going to avoid those high winter bill peaks. Right now it's going to be about the consumer being really, really savvy about the amount of energy they use, because you know we're feeling it everywhere."
Right now, natural gas spot prices run at more than $8 per million British thermal units. CERA consultants estimate the price could drop as low as $4 when the LNG imports begin to saturate the U.S. market. Laurie Johnson Houston Public Radio News.