Natural Gas Prices Surge As Utilities Switch From Coal Use

A few months ago, natural gas prices hit a 10 year low. No more. Now these energy prices have surges roughly 70% recently due to several factors, leading yet another significant energy inflation cycle. In recent months, many utilities have even switched from burning coal to using natural gas to produce electricity, which will on one hand reduce greenhouse gas emissions, but also mainly because the lower price of natural gas only encouraged this switch by the utilities. Further, recent seasonal air conditioning use has also resulted in higher natural gas use as well as temperatures surged in the United States to near record levels making many workplaces and homes unbearable.

While Congress appears to be largely viewed as a do nothing mechanism right now, many utilities actually cut greenhouse gases on their own by switching to natural gas to produce electricity. The lower cost of the natural gas helped to fuel this effect that has benefited the environment it seems. Coal fired electricity production was about 50% up until very recently, but now natural gas fired electricity production is running nearly equal recently, although other methods such as water turbine powered, nuclear powered, etc. still account for part of these production figures. So far, most electricity consumes haven’t seen any price decrease in their electricity bills though, while some continue to receive increases as their public regulators continue to grant new increases to utility providers.

Yet, one business trend is clear. that natural gas prices will be on the rise as only the latest utility to witness an inflationary trend.

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