As families around America gather around dinner tables this holiday season, topics like the weather, Black Friday sales, or the economy are probably more likely to come up in conversation than the issue of fracking. And for that reason, this might be a good winter for the natural gas industry—at least as far as public opinion goes.
The debate in Washington and in shale-rich states like New York over hydraulic fracturing have reached new heights this year, as proponents praise the process as a domestic energy game-changer and environmentalists virulently oppose it. Though the latter group has managed some victories this year on the issue of natural gas, they might have more trouble making their case this winter as consumers notice the savings (and/or warmer living spaces) that increased natural gas production could bring.
Compared to heating bills of winters past—before the country's jackpot discoveries in shale gas over the past few years—recent bills should give natural gas users a reason to give thanks. And although analysts don't expect huge changes in the price of natural gas from last year or even the year before, gas users will still have an advantage over their oil-using counterparts, especially in the Northeast.
According to John Felmy, chief economist at the American Petroleum Institute, heating oil will cost an average American family around $2,500 this winter as oil prices remain high. By contrast, he says, the average family that uses natural gas to heat its home will be spending around $1,000. According to the Energy Information Agency, an average family could even spend less than $750 depending on where it lives.
Like Thanksgiving itself, natural gas has become "a unique story that's really a U.S. story," says Tancred Lidderdale, senior economist at the Energy Information Agency. Unlike oil prices, for which fluctuations are based more on global supply and demand, natural gas prices have been more dependent on what's been happening within the United States, he says.
And hydraulic fracturing technology, for all the controversy it's created, is largely responsible. Forecasts of warmer weather and tepid economic growth also contribute to the downward pressure on natural gas prices.
If they're watching prices and looking ahead at the natural gas industry, Felmy says, consumers could decide to splurge a bit—either on extra heat or on a few extra gifts under the tree this holiday season. But most likely, he says, they won't start noticing savings until after the holiday season when they get their heating bills for December. "It could be a real positive sign in the mail," he says—and not just for the family.
"To the extent that they're able to spend money on other things other than heating, that's good for the economy," he says.