Here we are close to March of 2021. As we sit here gas prices at the pump have gone up on average, 30 cents a gallon across the boards since January 1st and since the end of November the price has gone up about 44 cents. What does this mean for the future?
Well, there’s more to consider. Through 2020 there was a reduced industrial demand for electricity and natural gas due to COVID-19. And there fortunately is an ample supply of natural gas and oil in storage because of 4 years of energy-friendly policies regarding oil and fracking.
A high percentage of electricity generation plants depend on natural gas to run the generators that produce the electricity, thus there is a direct correlation between the prices of natural gas and the cost of electricity.
Natural gas prices have been low for quite a while. In fact, historical lows were experienced all through 2020. But take a look at what’s happening to the price of natural gas since the end of 2020!
In the last two months, there have been some big changes that are likely to increase prices of oil, gasoline, natural gas, and electricity pretty dramatically.
Here are some things that have been done:
- The Keystone XL pipeline has been stopped.
- There are increased regulations regarding oil, gas and coal emissions that will make it difficult for fossil fuels plants to remain competitive over time.
- Funds that have in the past subsidized fossil fuel industries have been redirected.
- Drilling on all federal land has been halted. This accounts for about a quarter of annual U.S. production.
- There is a halting of new oil and gas leases on federal lands and water.
These actions and more will upset natural gas production and storage just as we are moving into an expected ramp-up period as the pandemic subsides.
My advice to any commercial business owner is this:
Lock in a fixed rate now for as long as you can. We have very experienced Energy Consultants, and we work with many different Energy Supply Companies. If you are in a deregulated state you can take advantage of a 1, 2, 3 year or more contract that locks in the price of your electricity and/or natural gas no matter what happens in the market. There are many things that are uncertain right now. But we can be certain about this—we are moving toward a perfect storm of factors that will make electricity and natural gas costs rise dramatically. Now is the time to talk to us about your electricity and natural gas needs. We will get you the best price available in the current market and lock it in!
Call for your Free Rate Analysis today—866-253-9600. Visit our website at www.ConsumerEnergySolutions.com to reach out to us as well.