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With winter and cold weather upon us, many consumers will be bearing the burden of increased costs for heating sources like natural gas this year.
New data released from the Bureau of Labor Statistics in early December showed a continued rise in inflation, with consumer prices in November rising 6.8% over the prior year. One of the main categories driving inflation overall has been energy, where prices now are up a total of 33.3% over their 2020 levels. While the rate of growth month-to-month has slowed, the cost of utility gas service was 25.1% higher in November than it was one year ago. The COVID-19 pandemic has increased volatility in both demand and supply for energy, and with supply currently lagging behind demand, consumers are facing higher prices as a result.
Recent spikes in natural gas pricing run in contrast to a decline in residential prices seen over the last decade. The rise of new techniques like hydraulic fracturing and horizontal drilling in the early- to mid-2000s made natural gas easier to extract, which has generally contributed to a trend of lower prices on average. In dollars per million BTU, the cost of natural gas in the U.S. has generally held steady between $10 and $15 since the last recession. In the summer of 2021, however, prices rose to around $20 per million BTU.
