Natural Gas Prices To Hold In $4-$5 Range Through 2035

Tower for drilling horizontally into shale for natural gas [Wikipedia image]
A study by economic research firm IHS projects that domestic shale gas production is likely to hold down the price of natural gas for more than twenty years. 

The report forecasts the price of natural gas will hold to an annual average of $4-$5 per million British Thermal Units (MMBtu) through 2035. IHS says current technology should allow production of roughly a third of the continent’s shale gas resources — about 900 trillion cubic feet — without significantly higher prices.

Tim Gardner, an IHS vice president, says the trend makes natural gas more competitive as an energy source for home heating. But he also says that much of the country still lacks the infrastructure to allow homeowners to switch to gas from other energy sources, such as electricity or heating oil.

“Probably in the Northeast you have the strongest case for greater gas consumption, and there you also have some of the most serious pipeline constraints of anywhere in the country.”

Those pipeline constraints are particularly severe in New England. Last week’s polar temperatures caused gas prices in the region to spike at nearly ten times the national average.  

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...