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Natural Gas Use in American HouseholdsHouseholds that use natural gas, especially for space heating, will be confronted this winter heating season by the recent sharp increase in the price of natural gas and the forecast that higher prices will continue through the season and beyond. Residential natural gas prices remained in the $6 to $7 per thousand cubic feet (mcf) range annually throughout the 1990s (Figure 1). Although prices vary by seasonlower in the first quarter and higher in the third quartercomparison of residential prices for the same month (September) between 1999 and 2000 shows a sharp increase, from $8.63 to $9.78 per mcf (Monthly Energy Review January 2001). Prices that exceed $10 per mcf for the next few quarters before dropping below $9 are projected by EIA's Short-Term Energy Outlook February 2001 (STEO) (Figure 2). According to the most recent Residential Energy Consumption Survey (RECS), the average American household paid $579 for natural gas in 1997 (at an average price of $6.96 per mcf). The price projected by the STEO is $10.07 per mcf for 2001. This price is applied to the average annual consumption reported by the 1997 RECS (83 mcf per household at prevailing 1997 weather conditions, Figure 3) to estimate expenditures at the projected higher price. In order to account for inflation when comparing expenditures for different years, all dollar values are converted to chained (1996) dollars. We find that households paid, in chained dollars, $568 in 1997 and would pay $765 at 2001 prices (Figure 4). |
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If natural gas prices projected for 2001 were applied to households that used the fuel in 1997, annual expenditures (in chained dollars) would be 35% higher. |
The use of natural gas in the United States is widespread. In 1997, 61 percent of residences used the fuel for one or more end uses53 percent used it as the main heating fuel and 52 percent used it for water heating. Most natural gas (68 percent of the total) was consumed for space heating. While natural gas is widely used, its use and the amount consumed vary significantly within the residential sector and, consequently, the impact of higher prices will be variable. Consider the following findings from the 1997 RECS:
Specific questions may be directed to:
Alan Swenson http://www.eia.doe.gov/emeu/consumptionbriefs/recs/natgas/nat_gas_piece.html Release date: January 16, 2001 If you are having technical problems with this site, please contact the
EIA Webmaster at wmaster@eia.doe.gov |