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However, with natural gas, production takes a long lead time -- drillers and processers cannot increase production capacity quickly to meet increased market demand, thus increased demand will start the price rising and keep it rising for a period of time until eventually supply catches up, or other market factors (such as a warm winter that reduces demand for heating gas) influence the price. Overall, prices for natural gas have been rising: between 1999 and 2008, natural gas prices in the U.S. more than doubled, from $6.69 per thousand cubic feet (Mcf) to $13.68 per Mcf. The increasing price reflects market conditions that have included:
Colder-than-normal weather for long periods during some heating seasons
Increasing use of natural gas for electric generation
Production disruptions from hurricane activity in the Gulf of Mexico
Record-high crude oil prices over much of the last two years
Fluctuating net...
Energy Information Administration).
Additionally, prices in different regions of the country can vary based on their proximity to natural gas producing facilities. Transportation costs become part of the total price for some customers. In other words, as we see price variations in different geographies and prices rising in response to changing economic and environmental conditions, it is clear that market forces of supply and demand are operating to set the prices, not a monopoly.
References
Alben, Alex. "Mediating the marriage of Comcast and NBC to protect consumers." Seattle Times. 28 January, 2010. Web. 3 May, 2010.
Morris, Frank. Monsanto GMO Ignites Big Seed War. National Public Radio. 12 January, 2010. Web. 3 May, 2010.
NaturalGas.Org. Industry and Market Structure. 2004. Web. 3 May, 2010.
U.S. Energy Information Administration. Natural Gas Prices. Web. 3 May, 2010.
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