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How Does Cold Weather Impact Natural Gas Prices?

With winter in our midst, our concern will be keeping warm. We will be turning on our furnaces and bringing out extra blankets to fight off the cold. Heating our homes can be one of the bigger expenses we run into as far as utilities are concerned, and since everyone is turning on the heat, more natural gas is being used. The question is, how does cold weather impact natural gas prices?

Around half of United States households use natural gas for heating and cooling their household. The price of natural gas is dependent on supply and demand. Therefore, when temperatures outside reach more into the extremes there is more of a demand for natural gas usage. In the winter, your natural gas prices may increase slightly because there is more demand for natural gas so people can heat their homes and keep themselves warm.

The prices of natural gas are also dependent on how much natural gas is in the US natural gas inventories. Inventories start to build up at the end of the winter, but if a winter is long and particularly cold, it can lead to an increase in prices because the demand is high and the inventory is low.

Other weather conditions can also effect the prices of natural gas because they can lead to the disruption of production. Hurricanes and severe weather can lead to the slowing or stoppage of natural gas production. This will lead to the US having less natural gas, so that can also potentially affect the prices. However, most of the natural gas we use comes from the US, so we do have easy access to it, and the supply is there for us.

It is good to know that the price of natural gas can change just so you are prepared in case it happens, but it is also important to remember that natural gas is one of the cheapest, cleanest-burning fossil fuels. Even if prices do change, you are still getting a great source of energy at a good price. 

Factors That Affect Natural Gas Prices

We are all familiar with the flux of prices regarding fuel. There have been many times recently when gasoline prices have increased based on supply and demand, but what about natural gas? This resource heats our homes and gives us energy. What factors affect the change in natural gas pricing?

1. Supply and Demand – Like everything else, supply and demand has any influence on price. That is why in winter months natural gas prices can increase because people use this resource to heat their homes.


2. Weather – Weather also has an impact because it can increase the demand and use of natural gas. Also, severe storms like hurricanes can slow efforts to obtain natural gas.


3. Imports and Exports – This is often a factor regarding sources of energy. However, the United States gets its natural gas predominately from inside its own borders. This means you don’t have to worry much about the imports and exports; with natural gas, we have enough to fuel our country right from our very own land!


4. Competition Among Other Resources – Natural gas prices can be affected by the prices of other energy sources because they are in competition with one another.


5. Natural Gas Storage – The amount of natural gas in storage is also a factor that can affect price. However, natural gas is a great resource because it can be stored. During summer months, when the demand for natural gas is lessened, we replenish and increase storage, so we have plenty of natural gas for when the demand increases.

There are a few factors that can affect the price of natural gas, but overall this is a great resource to use because it has many advantages. We have lots of natural gas in the United States, so we can get the supply we need. Natural gas is also one of the cleanest burning sources of energy and one of the cheapest. There are many reasons why natural gas is a great resource for energy in your house. 

Natural Gas Prices: Fixed or Variable Rates?

With utilities like electricity and water, you have a monthly bill that you have to pay a certain rate for. Natural gas, however, is a little bit different. With your natural gas provider, you can choose whether or not you want to have a fixed or a variable rate for your usage.

Fixed Rate

A fixed rate is pretty self-explanatory. This is a rate that doesn’t change from month to month. Your contract is usually six months or a year, and you pay the same rate for all of those months. The rate is determined before the customer commits to the agreement.

With fixed rates, it is important to know what your contract entails because you will want to know the contract length and how renewal of the contract works. Also, there may be an early termination fee or cancelation fee if you don’t stick through all of your contract.

Variable Rate

A variable rate is dependent on the current rate for natural gas in the market. In a variable rate plan, you are at the mercy of the market. This plan is subject to price swings, but the price can swing lower and give you a better rate than a fixed rate plan. With a variable rate plan you have the opportunity to have the lower prices, however, there isn’t any sort of protection if prices do rise. With a variable rate, there is no contract. The customer can cancel the service at any point in time.

Before deciding what kind of plan you would like to do, you can do a little research on what the specific prices of each plan are. Here are our current rates for new customers, and if you have any other questions about fixed versus variable rates, contact Walton Gas. 

The History of Natural Gas

Natural gas has been around for millions of years, in fact, sometimes natural gas escaping from the earth would ignite leading to a fire from the earth. This was thought of as a divine or supernatural thing until more recently when we have harnessed the power of natural gas to use as a source of energy.

Around 1785, natural gas produced from coal was used to light streetlights and houses in Britain. This came to America in 1816, but it wasn’t the naturally occurring gas that we use today. This was manufactured, so it was less efficient.

In 1821, the first well specifically to obtain natural gas for energy was dug. This natural gas was predominantly used as a source of light because it was difficult to transport very far. However, after the invention of the Bunsen burner in 1885, people realized they could use gas for cooking and heating.

In the early 1900s pipelines for natural gas started to be built. This allowed natural gas to be transported for people to use in their homes for heating and cooking. Instead of coal that wasn’t as efficient, natural gas in its natural state allowed homes to be heated for cheaper.

Natural gas is now being obtained cheaper and easier than ever. The natural gas industry has existed for over 150 years in this country, and it has been growing and improving ever since it started. Natural gas is now often seen as the fuel of choice in our country and throughout the world. 

The Basics of Using Natural Gas for Energy

Natural gas is used to heat about half the homes in the United States. It also generates about 33% of our electricity. Why is natural gas so popular and what are the advantages of using it?

Natural gas is used for energy over coal and oil for several reasons. One major reason is natural gas is “clean burning.” This means that it produces fewer undesirable by-products than coal or petroleum. When natural gas is burned it does emit carbon dioxide, but at only half the rate that coal does. Natural gas is more energy efficient than coal as well; natural gas can better convert heat energy into electrical power.

Another benefit of natural gas is the fact that it is domestic. Pretty much all of the natural gas used in the United States comes from the United States. This is different than oil because about 25% of all our oil is imported from other countries.

Overall, natural gas is one of the cleanest, safest and most useful forms of energy that we have available to us. Walton Gas is a company with real people providing real service. We give you more than just energy, we give you the trust and experience you desire in a company. That combined with competitive pricing is why so many people choose Walton Gas. If you have any questions you can call us at 866.936.2427 or contact us via our website. 

How to Convert Your Home to Natural Gas

Natural gas is the most popular fuel in the United States. Around 56 percent of US households are heated by natural gas. Thinking about converting your home? It’s not as strenuous as it sounds. We’ve broken the process down to five steps. The good news is, most of these steps are done by professionals, all you have to do is make the decision to convert and hire a reliable contractor.

Follow this step by step guide to converting your home to natural gas:

  1. Check for gas availability in your area: You can do this by going online or calling your gas company. Ask every question you can think of. Make sure you ask if installation of the service line is free, because it usually is. Don’t make any assumptions about this process; it’s a big project and you’re going to want to know everything that’s going to happen to your home.
  2. Inquire about options and offers: Talk to your heating contractor about equipment options and special offers. Ask about a furnace for heat and a boiler for hot water. These appliances are generally $1,500 to $3,000; which is a bargain compared to oil systems, which could cost up to $8,000.
  3. Map it out: Your utility company will come map out your property to find the optimal route for the new gas service. They will identify your phone, sewer, water and electrical lines. In addition, you should mark where any underground sprinklers, septic and oil tanks are.
  4. Installation of the service line: It’s time for the service line to be installed from the street to your home. Make sure you ask your company what their services include regarding your yard. Most companies will fill in holes they’ve dug; however, they aren’t responsible for lawn care. Find out what they will do once the project is complete.
  5. Equipment Installation: This is one of the very last steps in converting your home to natural gas. All gas equipment (i.e. your furnace) will be installed in your home.

Sometimes there are special permits that you need in order to convert your home. You’re heating contractor/utility company will take care of this for you. They will figure out what needs to be done prior to installing your equipment. If there is gas near your property, installations can take up to four to six weeks, depending on the permit approval process.

You are sure to save money in the long run by switching your home to natural gas. Check out our other blogs for more information about the benefits of natural gas. 

Natural Gas Exploration - Factors That Affect Prices and Stores

Gas stove held in hands

There are numerous variables that influence the prices and stores of natural gas. Some of the most important of these are detailed below.

Weather and Seasonal Factors

Since over half of homes in the United States use natural gas to provide heating during the winter months, this substantial increase in demand causes a steep rise in prices in the winter, and reduces the levels in storage.

Cold weather in winter can also decrease the supply of natural gas. For example, wellheads can freeze solid when the temperature in a gas producing field falls below freezing, which can cause substantial falls in supply and increases in prices.

Curiously, since many power plants burn natural gas as a fuel, hot summer months, with the high demand for air conditioning, also cause high demand for natural gas and reduce the levels in storage.

Economic Growth

Since natural gas is a commodity, demand is closely linked to economic growth. Economic growth has an immediate knock-on effect on prices; as a general rule, higher economic growth causes rises in price and falls in stores while lower economic growth causes falls in price and rises in stores. 

Demographics

The distribution of people within the United States has a major effect on prices and stores. An increasing proportion of the population live in southern and western states, which tend to have higher average temperatures. The resulting increased demand for cooling in summer further increases prices and decreases stores of natural gas at that time of year; decreased demand for heating in winter decreases prices and increases stores at that time of year in those areas.

Tips for Converting to Natural Gas

Couple sitting in front of fire place

Natural gas is one of the cleanest and most cost-efficient energy sources around, but, because it has not been in use as long as coal or oil, many older homes are not set up to use natural gas as their primary source of energy. Conversion can seem like a daunting process, but a few key tips can make it a very worthwhile investment:

1. Find a cost calculator

If you know your usual household energy consumption, then you can often compare directly how much you can save by switching to natural gas. Many natural gas companies have online conversion calculators, which will show you exactly how the costs of oil and gas compare over time. Knowing how much you will save can help you weigh the up-front cost of conversion against the long-term benefits for a financially sound decision.

2. Look for rebates

Because natural gas is clean, efficient, and does not pollute, many cities have clean energy bills in place to encourage people to switch to natural gas. Under these bills, you may find you qualify for a rebate that can offset the cost of your conversion. Check your local government's website or ask a nearby natural gas company for information on rebates for converting to natural gas.

3. A brand new system might save you money

It is often possible to adapt an existing oil system to handle natural gas, but don't rule out replacing your heating system with a brand new one, even if it is more expensive. Some modern natural gas systems run at up to 90% efficiency, which can make a huge difference to your energy bill over time. A brand new system might cost more than a simple adaptation, but it will probably pay for itself sooner too.

The Future of Natural Gas

Energy diagram

In only a relatively short space of time, natural gas has gone from a strange novelty to one of the dominant sources of energy in the US.

Based on the way the demand for natural gas has grown over just the last few years, experts are predicting that natural gas will continue to climb in use for at least 30 years, overtaking coal and oil as the biggest source of energy in the US. As more individuals and businesses become aware of the advantages of natural gas, particularly its money-saving efficiency, homes and offices are switching from oil-based systems to gas systems in order to save money. At the same time, energy demand is going up overall, and more and more of the new energy is produced from natural gas as coal and oil fall out of favor for being environmentally unfriendly.

Production of natural gas is speeding up not just to match the increased demand, but to overtake it. Natural gas is comparatively easy to produce and store in large quantities, so production tends to continue even though demand fluctuates seasonally. As the US produces less coal and more gas, that gas is going to become a key export product, boosting the use of natural gas worldwide. With an increasing global interest in environmentally friendly energy, at some point natural gas will give way to completely clean and renewable energy sources like wind, solar and geothermic. For now, though, those technologies are still developing, and in the couple of decades it will probably take before truly renewable energy technology is mature enough to handle large-scale needs, gas will continue to grow as a safe, efficient and clean source of energy in the US and worldwide.

How Natural Gas is Stored

Gas refinery

Just like any other resource that helps provide heat and electricity, demand for natural gas goes up and down with the seasons. In hot regions, powering air conditioning during the summer months requires more gas for electricity; in cold regions, gas is a valuable resource during the winter when it can be used for heating, for generating electricity during long, dark nights, and for cooking hot food. Seasonal demand means that there are often large fluctuations in how much natural gas is needed, but fluctuating the production to match is expensive and inefficient, so storing the excess natural gas during periods of low demand means that there's plenty to go around during periods of high demand.

Most natural gas is stored underground - in fact, most natural gas is stored in the same places from which it is extracted. The kinds of porous rock that yield natural gas in the first place are pretty good places to keep natural gas when it isn't being used, so depleted underground reservoirs are treated and then re-injected with the natural gas produced by other methods. As gas is added, the pressure inside the reservoir builds up; the higher the pressure, the easier the gas is to extract again. Some of these reservoirs are salt cavern reservoirs, which make particularly good storage for natural gas because the salt is self-sealing, meaning that very little gas escapes and is wasted once it has been injected into the reservoir. Salt cavern reservoirs' structure makes them extremely strong and environmentally sound; some of the biggest reservoirs extend further underground than the height of the world's tallest skyscrapers!

If extremely high volumes of gas need to be stored, natural gas can be cooled into a liquid. Liquid natural gas is much denser than in its gaseous form, so large amounts of gas can be stored in relatively small spaces with a high energy yield. Natural gas reservoirs can be found all over the country, but most are concentrated in the north-east, where the geological landscape is perfectly suited to store large amounts of gas without harming the environment.