Brace yourself for a costly winter; With temperatures poised to drop, natural gas prices are surging

If you place any stock in the Farmers’ Almanac – most farmers don’t – then we’re in for a cold and snowy winter. Better hope the almanac is wrong this year because heating our homes could cost a fortune.

Natural gas prices have at least doubled over the past two years and are sitting at 14-year highs, according to Citizens Utility Board. Natural gas from Ameren Illinois, for example, has risen 30% from last August, according to CUB figures.

Does that mean Ameren bills will climb by 30%? No. Natural gas prices are only part of the equation on your home heating bill. Your out of pocket won’t rise hand-in-hand with the price of natural gas. Nevertheless, we can reasonably expect some sticker shock.

“All indications are that gas bills will, for the second consecutive winter, be elevated,” said Jim Chilsen, communications director for CUB. “It looks like this will be another painful winter for Illinois consumers.”

Chilsen urged consumers to increase their energy efficiency and limit their consumption. Visit CUBHelpCenter.com for tips.

Farmers already are feeling the pain. David Isermann, president of the La Salle County Farm Bureau, said farmers use natural gas to dry their crops and heat their homes, but it also is a key component in the production of anhydrous ammonia, the cost of which was rising, anyway.

“Our fertilizer inputs are directly tied to natural gas,” Isermann said, “so this is bad news for us.”

This has set off a guessing game for organizations on tight budgets. Carol Alcorn, executive director for Public Action to Deliver Shelter, which operates homeless shelters in Peru and Ottawa, saw a 21% increase in utility costs between August 2021 and July 2022. Now she’s scrambling for a handle on what this winter holds.

“I’m writing a budget and I don’t even know what to ask for,” Alcorn said. “I know it’s going up, but I don’t know how much.”

The Citizens Utility Board doesn’t know, either, as prices are subject to monthly fluctuations. Gas could tick lower as winter approaches, but Chilsen acknowledged the outlook is grim.

Anyone worried about making ends meet this winter can apply for relief through the Low Income Home Energy Assistance Program, or LIHEAP.

Tammy Saenz, director of the LIHEAP program for the Tri-County Opportunities Council, said applications now are being accepted through TCOC’s website, tcochelps.org. Applicants should be prepared to furnish income information for the past 30 days.

Saenz said she isn’t sure whether rising natural gas prices will usher in more applicants than in the past two winters, when the coronavirus pandemic set her phone ringing off the hook.

“The last two years were very hectic, but I’m not sure how it’s going to be this year,” Saenz said. “All I know is I hope it’s a better year than last year.”

Why are prices rising? The answer depends on who you ask.

The CUB pins the increase on a number of factors, including the Russian invasion of Ukraine, increased demand after the pandemic and extreme weather. Hurricane Ida alone knocked more than 90% of gas production in the Gulf of Mexico offline last August, CUB said, citing the Energy Information Administration.

“The boom-bust cycle of this fossil fuel is making consumers pay,” said Bryan McDaniel, director of governmental affairs for CUB.

But another source thinks Washington bears responsibility for driving up prices.

Tom Trott is an oil and gas lawyer who earned his degrees from the University of Illinois and is board certified in oil, gas and mineral law by the Texas Board of Legal Specialization. He said the major cause of the high price of natural gas is actions taken by the current administration to discourage oil and gas development in the USA.

“The USA was an exporter of oil prior to the actions of the current administration,” Trott said. “We are now an importer. Actions by Russia have made the situation worse, but our governmental actions are the major cause of the price increase.”