Natural gas prices could dent household budgets this winter
HOUSTON - While rising oil prices may affect consumers in the short term, natural gas prices may be a bigger threat, with cooler temperatures on the way.
The fossil fuel is used for so many things. It heats and powers our homes; drives industry; it's a fuel for transportation, and it's become very expensive in the last year.
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Maryann Ramirez knows all too well what those high prices can mean. After the Big Freeze, she got stuck with a $400 gas bill, which was five times the normal rate, in her Sealy neighborhood.
"I didn't get hurt as bad as a lot of people did," she remembers.
Now, hearing prices are inflated again, she's not looking forward to seeing her budget stretched any farther.
"Double or triple the bill, on a regular basis, would definitely be a big hurt in the pocketbook," she says.
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Energy analysts have had a challenge keeping up with ever-changing demands around the globe. For natural gas, current demand is fueled by a buying-spree in China, to help switch from coal power, and a shortage in Europe, where prices are the equivalent of $200 oil, as renewable energy sources have not lived up to expectations.
"You can't just cut off things like LNG imports, and build a bunch of wind turbines and install solar," says Houston energy analyst James Bevan, "When the wind doesn't blow and you don't have adequate supplies, is when things go wrong."
Global demand has helped inflate U.S. natural-gas prices by more than a 100% this year. While supply is not the problem it is overseas, the nation generates 40% of its electricity from natural gas.
A colder winter will mean more use, with higher prices passed on to consumers.
"For those who use natural gas as heating, like Texas and the Midwest, they're going to see another impact in their heating costs as we go through the winter," says Houston energy analyst Andy Lipow.
RELATED: Oil prices reach seven-year high impacting prices at the pump
Like oil, the price of natural gas changes daily, dependent on demand. Experts believe that an especially cold winter could easily force prices to double again and add financial pressure on anyone who depends on it.