According to the Energy Information Administration's latest annual long-term forecast, the "Annual Energy Outlook 2006," prices for natural gas are expected to go up in the future, but demand will grow more slowly than had been predicted in the past.
Also, the EIA says that residential use of natural gas is expected to drop by 6% from 2005 levels this year but rise by 7.7% in 2007.
Saving energy would help with the costs of cooling now and in the future. To help save energy:
- Hang curtains over your windows to keep the sun from coming in.
- When not in use, turn off lights, appliances, and other electrical equipment. Your best bet is to bake, wash, dry, and iron in the morning or evening.
- Put in a thermostat that will change the temperature on its own. In the summer, set it to 75 degrees when you are home and higher when you are out.
- Let the dishes in the dishwasher dry on their own.
- Clean your air conditioner's filter or get a new one.
There are four main parts to the costs of natural gas: production, transmission, distribution, and the commodity price, which is set by the market.
When the gas is made, it is sent from the wellhead to a nearby gas company by pipeline over long distances. Once it gets to the gas company, it is stored and then sent to customers in the area. The price of natural gas is set by supply, demand, and other factors in the market.
The Gulf of Mexico provides 25% of the natural gas that is used in the United States. But damage from Hurricanes Katrina and Rita is still stopping 11% of Gulf production.
Only 27% of natural gas is used to make electricity. The other 23% is used to heat homes. By tapping into the gas-rich Appalachian Basin, companies like Mammoth Resource Partners Inc., which is based in Kentucky and looks for oil and gas, hope to slow the rise in natural gas prices.
Roger L. Cory, president of Mammoth Resource Partners, says that even though people's energy costs are going up, investors know that this means there are more opportunities to make money.
