Natural Gas Price Per Therm: How Much Does Natural Gas Cost?

How Much Does Natural Gas Cost?

What does natural gas cost per therm? Do natural gas costs per therm vary by state? The cost of natural gas per therm can vary depending on location and other factors. The average natural gas cost per therm is $0.95 or $9.52 per thousand cubic feet. One therm is equal to 100 cubic feet of natural gas. Most households use natural gas for heating the home, heating water, and appliances. Natural gas is recognized as a clean burning fossil fuel that puts out fewer emissions than burning coal or petroleum products. However, as a natural resource, we should try to conserve natural gas as much as possible. Last year, 2020, we saw natural gas prices drop, but they appear to be rising again. Keep reading to learn more about natural gas and current costs.

What is natural gas?

Deep beneath the earth’s surface, natural energy is formed. In its natural state, natural gas is colorless and odorless. However, natural gas is typically not used in its pure form. Natural gas is usually processed and converted. During the process, many by-products are extracted. The by-products can be repurposed for other uses. Most commonly, natural gas is used for generating electricity and heat. As one of earth’s cleanest fossil fuels, natural gas is extensively used in residential, commercial, and industrial settings. Natural gas prices are usually determined by demand. Seasonal changes may cause demand to fluctuate.

What is a therm?

According to the EIA, “Therm is the unit of measurement for your natural gas use over time.” A British Thermal Unit (BTU) is the amount of heat required to increase the temperature of one pound of water by one degree Fahrenheit. Most natural gas bills will use therms but for comparison, one therm is equal to about 100,000 BTU’s. The rate you pay per therm can vary depending on your location, provider, and demand. Weather, appliances, and other factors can impact the amount of gas you use.

How much is a unit of natural gas?

Natural gas prices can vary depending on location, They can also vary depending on the season. As demand increases, the cost of natural gas usually increases as well. Since it’s a natural resource, there is no incentive for consuming more of it than your neighbor. In the United States natural gas is typically priced in dollars per MMBtu, dollar per cubic feet, or dollars per therm. The national average for natural gas in January 2020 was $9.52 per thousand cubic feet. Natural gas has to be shipped and stored, which is why location can impact cost. In places such as Hawaii, natural gas may be more expensive.

What is the cost of 1 MMBtu natural gas?

1MMBtu of natural gas should cost about $3.35.

Why is natural gas so cheap?

Compared to other energy sources, natural gas is very affordable. Natural gas prices for 2020 were historically low but rose in the second half of the year. In America, we have an abundant source of natural gas which drives prices down. Technological advances have allowed us to have access to more resources such as natural gas. As we are able to produce more natural gas, prices are predicted to become even more affordable. In addition, as alternative energy sources become more popular, the demand for natural gas may decrease in the years to come. The combination of increased supply and decreased demand should lead to lower prices.

Is fixed-price natural gas worth it?

Fixed-price natural gas may have a higher average but allow you to avoid seasonal spikes. In the long run you’ll probably save money with fixed-price natural gas. In addition, your monthly electricity bill should be more manageable. Variable-rate plans fluctuate in price depending on the market rates.

Will natural gas prices go up in 2021?

Natural gas prices are expected to slightly increase in 2021 after declining in 2020. The recent pandemic caused a large portion of our economy to shut down. The temporary decrease in demand for natural gas may have caused prices to drop. As our economy re-opens demand begins to rise again, which could be why we are seeing an increase in price. As we mentioned earlier, in the long term we expect to see a decrease in natural gas price due to technological advances. However, it will likely take 20+ years for these predictions to be proven.

Is natural gas cheaper than electricity?

The average price of natural gas is usually cheaper than electricity. While gas appliances may be more expensive, they may offer more long term savings. Since gas is usually cheaper, a gas furnace should be cheaper to operate. However, electric furnaces may be quieter and safer. If you live in an area prone to power outages, you may be better off with gas appliances. Gas appliances should continue to work even in the event of a power outage. When choosing between gas or electric appliances you should consult a professional to make an educated decision. There are pros and cons for gas and electricity.

How much does natural gas cost monthly?

In many households natural gas is used to warm the house, warm the water, and in many instances to cook. Therefore, gas costs per household can vary depending on usage, location, and other factors. The average natural gas bill in the US is $63.34. In some states such as Alaska, Hawaii, or Maine gas may be more expensive. Alternatively in other states such as New Mexico, Idaho, and Nevada, gas may be significantly cheaper than other areas. If you are trying to cut back on natural gas usage you should study your bill. While monthly utility bills can be confusing, there should be a section dedicated to usage. You can visit this section to monitor monthly usage and see if new actions save the amount of resources you are using.

What are gas procurement charges?

Gas companies need to source and transport the fuel required to power operations. The utility companies acquisition and transport fees may be labeled as procurement charges. Procurement charges can vary on a month-to-month basis. In most cases, they change on the first business day of each month. Gas bills can include more charges than just simple usage. Most gas bills are composed of a variety of components such as procurement costs, transportation costs, surcharges, and so forth. Wholesale gas markets impact procurement costs the most.

How many therms does the average household use?

In summer months, households typically use less therms than in winter months. In California, residents use an average of 40 therms per month in the winter and 16 therms per month in the summer. In Georgia, the average annual natural gas consumption per household is about 717 therms. Heating is a major portion of natural gas consumption. In areas with colder climates, you will likely see more natural gas usage. In addition to location, the size of your home can also significantly impact the amount of therm you use. Some opinions say that averages may not be as accurate as we hope since some households may not use natural gas.

Who has the cheapest natural gas?

And the winner is. . . Utah! Coming in at $9.12 per 1,000 cubic feet, Utah has some of the cheapest natural gas prices. The runner up is Montana but Utah is still about 8% cheaper. Other states with some of the cheapest natural gas rates are Idaho, New Mexico, Minnesota, New Jersey, Colorado, Wisconsin, Nevada, and Oregon.

How is natural gas billed?

Most gas bills share similarities but the charges may vary. Most gas bills will reflect usage. In addition, you may notice other charges such as procurement and surcharges. Some households may have very low gas bills, leading them to believe they are efficient. However, when you dive into your gas bill you may discover even more ways to save.

How is natural gas price calculated?

In most cases, natural gas prices are based on supply and demand. However as we mentioned, location and other factors can change how natural gas prices are calculated. Your utility bill probably expresses your gas usage as therms. However, appliances or furnaces may express required usage in other measurements such as BTU. If you are trying to calculate how much your furnace or appliances cost each month you may need to do some conversions. These tips should help you calculate natural gas costs. . .

One therm = 100,000 BTU One therm = 100 cubic feet of gas One thousand cubic feet (MCF) = 1,028,000 BTUs One cubic foot natural gas = 1,028 BTUs

Conclusion

As technology continues to advance, experts predict that gas prices will continue to remain inexpensive. There’s a possibility they may even drop.

Inspire's Clean Natural Gas plan offers peace of mind with a predictable price. In addition to that, there are no sign-up or cancellation fees and no installations or service interruptions when choosing Inspire as your natural gas supplier. We'll generate a customized price for your natural gas supply based on factors, including your home's energy consumption patterns.

Once you're a member, you'll rest easy knowing that carbon emissions from your home's natural gas consumption are being neutralized, and you're doing something positive for the planet.

When you switch to Inspire's Clean Natural Gas plan, your gas will continue to be delivered to you by your local utility company. Inspire will replace your current natural gas supplier, and once you start service, you will see “Inspire” listed as your natural gas supplier on your utility bill. We will begin to purchase offsets on your behalf to neutralize the carbon emissions associated with your home's natural gas consumption.

Currently, we offer our Clean Natural Gas plan for eligible residential and small business customers in Ohio, with more locations coming soon.

It's never been easier to reduce your net carbon emissions and make an impact on the planet. To learn more about offsetting your natural gas consumption, visit Inspire’s Clean Natural Gas plan page or contact Inspire’s friendly Member Experience team at (866) 403-2620.

And, as always, if you're looking for renewable options for your home's electricity supply needs, we also offer access to clean, renewable energy for one flat monthly price. Start now – the earth will thank you.