WSJ.com - Natural-Gas Bills Forecast to Rise By 50% in Winter
WSJ.com - Natural-Gas Bills Forecast to Rise By 50% in Winter
By STEPHANIE I. COHEN
DOW JONES NEWSWIRES
October 12, 2005; Page D3
The American Gas Association said yesterday it anticipates the average natural-gas bill will rise about 50% this winter.
A day ahead of the planned release of the Energy Department's winter-fuels outlook, the industry group said it expects utilities to meet basic natural-gas demand this winter, despite the potential loss of between one billion and three billion cubic feet of production a day through March due to damage from Hurricanes Katrina and Rita.
"I would expect to look at customer bills that are 50% higher...that would be a good rule of thumb," said Roger Cooper, executive vice president of policy and planning at the American Gas Association.
Natural gas is the dominant fuel used to heat homes in the U.S., with roughly 52% of homes using it.
While weather always has the biggest bearing on winter heating costs, the hurricanes that damaged oil and natural-gas production facilities in the Gulf of Mexico will play a significant role this year, said Paul Wilkinson, the association's vice president of policy analysis.
Hurricane Katrina cut off close to nine billion cubic feet a day of natural-gas production. Less than a month later, Hurricane Rita prevented production of eight billion cubic feet a day at its peak.
The majority of the natural gas pumped into homes and business -- around 84% -- is domestically produced, with an additional 13% from Canada and about 3% imported on tankers as natural-gas liquids. The association called on lawmakers to expand access to natural-gas supplies located on federal lands onshore and offshore.
The utility industry says it receives no benefit from natural-gas price spikes. Utilities pass along the price they pay to their customers, which typically accounts for about 70% of a customer's bill, Mr. Cooper said. Utilities make their profit by delivering natural gas to customers at rates approved by state regulators.
By STEPHANIE I. COHEN
DOW JONES NEWSWIRES
October 12, 2005; Page D3
The American Gas Association said yesterday it anticipates the average natural-gas bill will rise about 50% this winter.
A day ahead of the planned release of the Energy Department's winter-fuels outlook, the industry group said it expects utilities to meet basic natural-gas demand this winter, despite the potential loss of between one billion and three billion cubic feet of production a day through March due to damage from Hurricanes Katrina and Rita.
"I would expect to look at customer bills that are 50% higher...that would be a good rule of thumb," said Roger Cooper, executive vice president of policy and planning at the American Gas Association.
Natural gas is the dominant fuel used to heat homes in the U.S., with roughly 52% of homes using it.
While weather always has the biggest bearing on winter heating costs, the hurricanes that damaged oil and natural-gas production facilities in the Gulf of Mexico will play a significant role this year, said Paul Wilkinson, the association's vice president of policy analysis.
Hurricane Katrina cut off close to nine billion cubic feet a day of natural-gas production. Less than a month later, Hurricane Rita prevented production of eight billion cubic feet a day at its peak.
The majority of the natural gas pumped into homes and business -- around 84% -- is domestically produced, with an additional 13% from Canada and about 3% imported on tankers as natural-gas liquids. The association called on lawmakers to expand access to natural-gas supplies located on federal lands onshore and offshore.
The utility industry says it receives no benefit from natural-gas price spikes. Utilities pass along the price they pay to their customers, which typically accounts for about 70% of a customer's bill, Mr. Cooper said. Utilities make their profit by delivering natural gas to customers at rates approved by state regulators.
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