American Gas Association Winter Heating Forecast shows lower prices and higher production following previous year’s record costs
Washington, D.C. – American Gas Association analysis shows lower natural gas prices for consumers as Americans prepare for an El Niño winter that is anticipated to bring colder-than-usual temperatures to the southern United States. Natural gas prices for 2023 are on track to resemble the 2021 norm rather than the elevated prices of 2022, according to the AGA 2023 Winter Heating Outlook, thanks in part to higher natural gas production and natural gas inventories that are above the five-year average.
“We are seeing prices that are both stable and in line with recent historical trends,” said AGA VP, Energy Markets, Analysis and Standards Richard Meyer. “The return to lower pricing means natural gas bills are expected to decline this winter – even under colder conditions.”
“Utilities use a variety of supply sources to ensure they are prepared to meet customer demand during even the coldest months, helping to ensure energy reliability, especially during extreme conditions. Guided by experience and regulatory oversight, natural gas utilities plan natural gas deliveries on a daily, weekly, monthly, and seasonal basis by matching supply resources to forecasted demand and preparing for “design day” conditions or historic peak day loads,” said AGA Senior Market and Regulatory Analyst Morgan Hoy.
According to the U.S. Energy Information Administration’s forecast, which AGA further builds its outlook upon, home heating prices are expected to decline by an average of 21 percent year-on-year from 2022 to 2023 thanks to an anticipated 45 percent year-on-year decline in U.S. natural gas prices as measured at the Henry Hub. Households can save between 34 and 72 percent with natural gas compared to many popular electric alternatives. Homes and businesses already using natural gas for space heating can further cut costs this winter by 17 percent by installing a high-efficiency gas furnace.
Over the past year, the U.S. natural gas industry has experienced record-high production, demand, and exports while supplying reliable energy to American homes and businesses amidst changing global demands. This outlook is in stark contrast with last year’s steep natural gas production declines, which contributed to a close call related to system integrity in the New York area during Winter Storm Elliott, where record-breaking demand and operational challenges forced some gas utilities to rely on contingency plans to ensure customer reliability.
While FERC’s final report on Winter Storm Elliott is forthcoming, it is anticipated to include recommendations to ensure the reliability of natural gas utilities and the electric grid. AGA anticipates working with FERC to ensure it is taking steps within its jurisdiction to maintain reliable pipeline and storage services to supply gas utilities. AGA has also consistently supported efforts by stakeholders, regulators, and legislatures to ensure natural gas utility reliability and resilience, and the construction of additional needed infrastructure.
NOTE ON AFFORDABILITY: Customers who have difficulty paying their energy bills should be aware that help is available through energy assistance programs like LIHEAP. A state-by-state resource directory created as a joint effort between the American Gas Association and the National Energy and Utility Affordability Coalition to help customers find applicable programs is available here.
The slides for the Winter Heating Outlook media event is available here.