NEW YORK — The price of natural gas has fallen to its lowest level in more than a decade, a remarkable decline for a commodity that not long ago was believed to be in short supply.
The country's supply of natural gas is growing so fast that analysts worry the country's underground storage facilities could be full by fall. Utah consumers may benefit from the boom if Questar Corp. gets its way.
On Wednesday, the natural gas futures price dipped to $1.984 per 1,000 cubic feet, its lowest level since January 28, 2002, when the price hit $1.91. If the price falls to $1.75, it would be the lowest since March 23, 1999.
Natural gas production has boomed across the country as energy companies employ a new drilling technique, called fracking, to tap previously untouched reserves. The process has raised concerns about water safety, and has been temporarily banned in New York and New Jersey. But where it has been allowed, it has led to increases in drilling, job growth and production.
The falling price of natural gas has been a boon to homes and businesses that use the fuel for heat and appliances, and for manufacturers that use it to power their factories and make chemicals, plastics and other materials.
Questar Gas on Tuesday asked the Utah Public Service Commission to approve an immediate $42 million one-time refund to customers.
If approved, the refund would amount to about $34.50 for the typical customer, and would be a credit on their May bill.
"The purchase price of natural gas we buy for our customers has fallen and is expected to remain stable in the near term," said Craig Wagstaff, senior vice president of Questar Gas. "Typically, customers would see these lower prices reflected over time as rates are adjusted. With this proposal, customers will see a more immediate reduction."
From October to March, households spent $868 on average on natural gas, a decline of 17 percent from last winter. Those savings have helped to relieve the burden of rising gasoline prices. On average, households nationwide spent $1,940 on gasoline from October to March, a 7 percent increase from the same period a year ago.
There is so much natural gas being produced — and still in the ground — that drillers, policymakers, economists and natural gas customers are trying to figure out what to do with it.