Natural gas can be priced in dollars per therm, dollars per MMBtu, or dollars per cubic foot in the United States. 1 To translate these costs from one price basis to another, the heat content of natural gas per physical unit (such as Btu per cubic foot) is required. The annual average heat content of natural gas provided to consumers in the United States in 2020 was around 1,037 Btu per cubic foot. As a result, 100 Ccf of natural gas equals 103,700 Btu, or 1.037 therms. A thousand cubic feet (Mcf) of natural gas equals 1.037 million British thermal units (MBtu), or 10.37 therms.
These calculations can be used to convert natural gas prices from one pricing basis to another (assuming a heat content of 1,037 Btu per cubic foot):
Natural gas heat content varies by location and type of natural gas customer, as well as with time. For information on the heat content of the natural gas they supply to their clients, consumers and analysts should contact natural gas distribution firms or natural gas suppliers. Customers’ invoices may include this information from some natural gas distribution providers or utilities.
1 Natural gas was measured in cubic feet by the US Energy Information Administration from 1964 to 1964 at a pressure of 14.65 psia (poundspersquareinchabsolute) at 60 degrees Fahrenheit. Since 1965, the pressurebase has been 14.73 psia at 60 degrees Fahrenheit.
What is the cost of a unit of natural gas?
What is the price of natural gas per therm? Does the price of natural gas per therm differ by state? Natural gas prices per therm differ depending on geography and other factors. The average price of natural gas is $0.95 per therm, or $9.52 per thousand cubic feet. 100 cubic feet of natural gas equals one therm. Natural gas is used by the majority of households to heat their homes, heat their water, and power their appliances. Natural gas is a clean-burning fossil fuel that emits less pollutants than coal or petroleum-based goods. However, being a natural resource, we should make every effort to conserve natural gas. Natural gas costs fell last year, in 2020, but they now appear to be rising again. Continue reading to find out more about natural gas and its current prices1.
What is natural gas?
Natural energy is created deep beneath the earth’s surface. Natural gas is colorless and odorless in its natural state. Natural gas, on the other hand, is rarely used in its purest form. Normally, natural gas is treated and transformed. Many by-products are removed during the process. By-products can be recycled for a variety of purposes. Natural gas is most typically utilized to generate power and heat. Natural gas is widely used in residential, commercial, and industrial settings since it is one of the cleanest fossil fuels available. Demand largely determines natural gas pricing. Demand may fluctuate due to seasonal fluctuations.
What is a therm?
“Therm is the unit of measurement for your natural gas utilization over time,” according to the EIA. The amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit is measured in British Thermal Units (BTUs). Therms are used in most natural gas bills, however one therm is equal to around 100,000 BTUs. The price per therm is determined by your location, provider, and demand. The amount of gas you consume can be influenced by the weather, appliances, and other factors2.
How much is a unit of natural gas?
Natural gas prices vary depending on where you live and the season. Natural gas prices frequently rise in tandem with rising demand. There is no motivation to consume more than your neighbor because it is a natural resource. Natural gas is often priced in dollars per MMBtu, dollars per cubic foot, or dollars per therm in the United States. In January 2020, the national average for natural gas was $9.52 per thousand cubic feet3. Natural gas must be transported and stored, which is why pricing is affected by location. Natural gas may be more expensive in places like Hawaii.
Why is natural gas so cheap?
Natural gas is inexpensive when compared to other energy sources. Natural gas prices were historically low in 2020, but they began to rise in the second half of the year. Natural gas is abundant in the United States, which keeps prices low. We now have access to more resources, such as natural gas, thanks to technological advancements. Prices are expected to drop even further as we are able to produce more natural gas5. Furthermore, as alternative energy sources grow more prominent, natural gas demand may decline in the next years. Lower prices should result from the combination of increasing supply and decreased demand6.
Is fixed-price natural gas worth it?
Fixed-price natural gas has a higher average price, but it avoids seasonal price spikes. Fixed-price natural gas will almost certainly save you money in the long run. Furthermore, your monthly electricity payment should be easier to handle. The cost of variable-rate programs varies depending on market rates.
Will natural gas prices go up in 2021?
After falling in 2020, natural gas prices are likely to rise slightly in 2021. A substantial chunk of our economy was forced to shut down due to the current pandemic. Natural gas prices may have fallen due to a temporary dip in demand. As our economy reopens, demand begins to climb again, which could explain why prices are rising. As previously said, technological advancements are expected to lower natural gas prices in the long run. However, it is likely that these forecasts will not be realized for another 20 years or more.
Is natural gas cheaper than electricity?
Natural gas is frequently less expensive than electricity on average. While gas appliances are more expensive, they may save you money in the long run. Because gas is usually less expensive, a gas furnace should be less expensive to run. Electric furnaces, on the other hand, may be quieter and safer. If you reside in a location where power outages are often, gas appliances may be a better option. Even if there is a power outage, gas appliances should continue to function. To make an informed decision on whether to use gas or electric equipment, you should consult a specialist. Gas and electricity both have advantages and disadvantages.
How much does natural gas cost monthly?
Natural gas is used to heat the house, warm the water, and in many cases, to cook in many houses. As a result, residential gas expenses vary based on usage, location, and other factors. In the United States, the average natural gas bill is $63.34. Gas may be more expensive in other states, such as Alaska, Hawaii, or Maine. Alternatively, petrol may be substantially cheaper in other states such as New Mexico, Idaho, and Nevada. If you’re attempting to save money on natural gas, look over your bill. While monthly utility bills can be perplexing, a section dedicated to usage should be included. You can use this part to keep track of your monthly usage and check whether any new measures help you save resources7.
What are gas procurement charges?
The fuel required to power activities must be sourced and transported by gas firms. Acquisition and transportation fees charged by utility companies could be classified as procurement charges. Procurement costs can fluctuate from month to month. They typically change on the first business day of every month. More costs than simple usage can be found on gas bills. The majority of gas bills have a number of different components, including procurement expenses, transportation costs, surcharges, and so on8. The impact of wholesale gas markets on procurement prices is the greatest9.
How many therms does the average household use?
Households often use less therms in the summer than they do in the winter. In the winter, residents in California use an average of 40 therms per month, while in the summer, they use 16 therms each month10. The average yearly natural gas usage per home in Georgia is approximately 717 therms11. Natural gas use is primarily used for heating. Natural gas will most certainly be used more in locations with colder weather. Aside from location, the size of your home can have a big impact on how much energy you consume. Some argue that because some families do not use natural gas, averages may not be as accurate as we want.
Who has the cheapest natural gas?
Utah has been declared the winner! Utah offers some of the cheapest natural gas prices, with costs as low as $9.12 per 1,000 cubic feet12. Montana is the runner-up, but Utah is still roughly 8% less expensive. Idaho, New Mexico, Minnesota, New Jersey, Colorado, Wisconsin, Nevada, and Oregon are among the states having some of the lowest natural gas prices.
How is natural gas billed?
Although most gas bills are similar, the charges may differ. The majority of gas bills will show your usage. Other charges, such as procurement and fees, may also be shown. Some homes may assume they are efficient since their gas bills are quite low. When you look at your gas bill, though, you can find even more methods to save.
How is natural gas price calculated?
Natural gas prices are usually determined by supply and demand. However, as previously stated, the way natural gas prices are determined might vary depending on geography and other factors. Your gas usage is most often expressed in therms on your utility statement. Appliances or furnaces, on the other hand, may specify needed usage in other units, such as BTU. You may need to make some conversions13 if you’re attempting to figure out how much your heater or appliances cost each month. These guidelines should assist you in calculating natural gas expenses.
A therm is equal to 100,000 BTUs.
A therm is equal to 100 cubic feet of gas.
A thousand cubic feet (MCF) equals 1,028,000 British thermal units (BTUs).
Natural gas has a BTU value of 1,028 per cubic foot.
Conclusion
Experts believe that gas prices will continue to be low as technology advances. There’s a chance they’ll even fall.
The Clean Natural Gas plan from Inspire gives you peace of mind at a fixed price. Furthermore, when you choose Inspire as your natural gas supplier, there are no sign-up or cancellation fees, no installations, and no service interruptions. Based on parameters such as your home’s energy use patterns, we’ll calculate a personalized price for your natural gas supply.
Once you’ve joined, you’ll have peace of mind knowing that carbon emissions from your home’s natural gas consumption are being offset, and you’re doing your part to help the environment.
Your gas will continue to be delivered to you by your local utility provider when you switch to Inspire’s Clean Natural Gas plan. Your present natural gas supplier will be replaced by Inspire, and you will see “Inspire” listed as your natural gas supplier on your utility bill after you begin service. We’ll start buying carbon offsets on your behalf to offset the carbon emissions caused by your home’s natural gas usage.
Our Clean Natural Gas plan is currently available in Ohio for eligible home and small business customers, with more locations coming soon.
It’s never been simpler to cut your net carbon emissions and help the environment. Visit Inspire’s Clean Natural Gas plan page or call Inspire’s helpful Member Experience team at (866) 403-2620 to learn more about offsetting your natural gas consumption.
We also offer access to clean, renewable energy for one flat monthly price if you’re looking for sustainable choices for your home’s electricity supply needs. Begin today, and the planet will thank you.
What are the methods for calculating natural gas consumption?
The cubic foot is a popular unit of measurement for natural gas, and you’ll be paid in thousands of cubic feet (MCF) or hundreds of cubic feet (CCF). You could also be charged by the therm, which is roughly equivalent to a CCF or 100 cubic feet. The utility sets a meter between the incoming electric power or gas lines and the point of distribution at the house to monitor how much electricity or gas you consume.
The force of moving gas in the pipe drives a gas meter, which turns quicker as the flow increases. The pointer on the next higher value dial advances one number for every complete round of the dial with the lower value.
When reading a gas meter, read and write down the numbers from left to right on the dials (opposite of an electric meter). It’s vital to observe that the hands of adjacent dials on both types of meters turn in opposite directions.
How is the energy of natural gas measured?
Natural gas can be measured in metric or imperial units based on its energy content or volume.
The energy content of natural gas is usually measured in Gigajoules (GJ), a metric energy unit. One million British Thermal Units is the imperial unit of measurement (MMBtu). The heat value of a GJ is roughly 0.948 MMBtus. 27 litres of fuel oil, 39 litres of propane, 26 litres of gasoline, or 277 kilowatt hours of electricity are equivalent to one GJ of natural gas.
Natural gas resources, production, and consumption are generally measured in Trillion Cubic Feet (Tcf), an imperial unit equal to 1,000,000,000,000 cubic feet in Canada (cf). However, cubic metres, a volumetric measure, is the official unit of natural gas volume measurement and customer invoicing in Canada. A cubic meter is roughly equal to 0.038 GJs and roughly represents the size of a normal kitchen range.
Btu
Natural gas is frequently measured in imperial units, particularly when it comes to gas barbecues and fireplaces. The imperial cousin of the metric joule is the British thermal unit (Btu). The amount of energy necessary to elevate one pound of water by one degree Fahrenheit is measured in Btu.
Cubic feet
At a temperature of 60 degrees Fahrenheit and a pressure of 14.7 pounds per square inch, gas is sometimes measured in cubic feet.
The amount of gas produced by wells is measured in thousands or millions of cubic feet (Mcf and MMcf). Trillions of cubic feet are used to calculate resources and reserves (Tcf).
What is the volume of a trillion cubic feet? Enough to fill a cube with two-mile-long sides!
Note that equipment has variable levels of efficiency. Efficiency considerations are not included in these conversion factors because they are only for the commodity.
What is the cost of natural gas?
Natural gas, on the other hand, is sold in energy units. Btu, Therms, and Joules are all common energy units. The majority of natural gas produced from a subterranean reservoir is methane, along with a variety of other heavier hydrocarbons and, unfortunately, some contaminants. The energy content of the gas when combusted, and hence its eventual value to a customer, would be determined by the relative quantity of heavier hydrocarbons vs methane. Customers are charged for gas-derived energy rather than a specific volume of gas.
Gas prices were traditionally quoted by volume only in the United States, where there is a huge pipeline network with essentially identical gas characteristics (in Mcf). Because the calorific values of the pipeline are relatively identical across the network, gas consumers in the United States could convert purchased volume to energy equivalents. The $/MMBtu pricing technique, on the other hand, has gained favor in the United States in recent years.
Because natural gas is difficult to transport, prices are usually established locally or regionally rather than worldwide, as is the case with oil. Prices can be established by negotiation, regulation, or open-market methods similar to those used in oil markets for the majority of traded natural gas that is carried by pipeline (about 55 percent of total trade). Liquefied Natural Gas (LNG) is used for the rest of the natural gas trade (LNG). The bulk of LNG cargoes are sold on a long-term contractual basis at prices that are either linked to the cost of feed gas, floating in the destination market, or indexed to oil or other commodities in the LNG market.
Where there are many buyers and sellers of gas, supply and demand have the greatest impact on traded prices. Prices may be set by traders at dedicated physical or electronic exchanges in countries with deregulated markets, such as the United States and Europe, who would price gas at location-specific hubs. Hub gas pricing is becoming the industry standard outside of the United States in Canada, continental Europe, the United Kingdom, and parts of Australia all regions with extensive gas infrastructure, a large number of gas sources and gas consumers, clear regulations, and limited government influence on the markets. There have been attempts to establish hub prices in other parts of the world, such as Singapore, China, and India; however, until the ability to transport gas from these hubs to other regional markets is established, gas regulations are harmonized, sufficient volumes are traded on these hubs, and the veil of secrecy surrounding gas prices in these regions is lifted, it is unlikely that suppliers and buyers from outside the local market will want to trade.
Variables like production levels, gas storage injections and withdrawals, weather patterns, pricing and availability of competing energy sources, and market participants’ views on future trends in any of these or other variables are all supply-and-demand factors that can influence natural gas prices. Gas prices may rise in the winter months if the weather is cold and gas is used for space heating in that particular region. In contrast, if the majority of the gas is utilized to create electricity that is mostly used for air conditioning, gas demand will climb during the hotter summer months. Weather would have a minor impact on gas demand if gas is consumed by industrial consumers, either directly or indirectly. Gas supply disruptions (such as those caused by offshore hurricanes in the US Gulf of Mexico) would restrict supplies and consequently raise prices.
What are the methods for buying and selling natural gas?
If you live in a deregulated state, you have the option of choosing your energy supplier, which includes natural gas. But how does this take place? What is the process for providers to sell natural gas, and what elements influence the outcome?
Natural gas can be bought, sold, and exchanged on the free market, just like electricity and other commodities. Energy suppliers in deregulated jurisdictions keep a close eye on energy prices and buy natural gas for consumers at current market prices. This allows them to sell natural gas at a guaranteed, often lower price than the utility.
Natural gas prices tend to be lower in March and April, according to the New York Mercantile Exchange (NYMEX), making spring an ideal time to consider enrolling in a natural gas plan with a secure and locked-in rate. Here you may look for price plans in your neighborhood.
Natural gas retail prices differ from state to state and city to city. The following factors have the most impact on those differences:
Naturally, supply and demand influence the price of all commodities, including natural gas. Lower prices are usually the result of an increase in supply and/or decrease in demand, whilst higher prices are usually the consequence of a drop in supply and/or increase in demand.
In the same way, higher prices, which are less appealing than lower rates, will restrict demand while encouraging output. Lower prices will discourage manufacturing, reducing the risk of an overflow of supply and maintaining a more balanced supply-demand ratio.
We all know that supply and demand have a direct impact on natural gas prices. But what influences supply and demand? Let’s have a look at some examples:
- Production capacity and speed generating too much natural gas too rapidly, or not enough at a fast enough rate, will have an influence on available supplies.
- Natural gas can be kept during periods of low demand, but if there is insufficient or excessive natural gas in storage compared to the speed and ability to create natural gas, the supply may be too great or insufficient.
- Natural gas imports and exports the amount of natural gas flowing out or coming in has an impact on supply.
- The state of the economy when the economy is doing well, demand for commercial and industrial goods and services rises, resulting in increased natural gas demand.
- Unexpected weather extremes an exceptionally warm winter or cool summer reduces natural gas demand, whereas an abnormally cold winter or hot summer boosts demand.
- Other fuel availability – when other fuels are scarce or have rising prices, demand for natural gas rises; conversely, when other fuels are plentiful and at cheaper prices, demand for natural gas falls.
Aside from the cost of the commodity, transportation and distribution also contribute to the price of natural gas. The costs of moving natural gas from where it is generated or stored to distribution utilities through pipeline, as well as the cost of delivering it to customers, are known as transmission and distribution fees.