Natural Gas Prices and Supply

By The National Environmental Trust

Last update: May 8, 2001

Natural gas prices spiked this winter, particularly in the West. A relatively prolonged period of low gas prices, beginning in 1986, led to reduced investments in natural gas production resulting in abnormally low supplies at the same time demand began to rise. Markets signaled the need for greater supply through these high prices, encouraging an increase in production. Now government agencies predict adequate supplies from available U.S. reserves well into this century. Lack of available reserves is not the cause of the high price of natural gas.

"Last year when prices were lower, producers cut their production. That production cut has led to the current shortage with corresponding higher prices." --Rep. Henry Hyde in a letter to Federal Trade Commission Chairman Robert Pitofshy
"Available natural gas resources in the United States combined with supplies from foreign sources are believed to be adequate to meet demand increases expected through 2020." --Dr. Mark Mazur, Acting Administrator of the EIA before the Senate Energy and Natural Resources Committee, December 12, 2000.

For more information, contact Kevin Curtis or Brandon MacGillis at The National Environmental Trust, 202/887-8800