Natural Gas Affordability Soars Amid Volatility and Rising Demand
The affordability of natural gas has seen significant fluctuations over the past few decades. According to data from the US Energy Information Administration (EIA), natural gas prices have been increasing due to its growing role in reliable electricity generation.
A closer look at the Consumer Price Index (CPI) data from the US Bureau of Labor Statistics (BLS) reveals that natural gas CPI has been more volatile than all items CPI. Between 1986 and 1999, natural gas CPI remained relatively flat, increasing by only 4.2%. However, between 2000 and 2008, it saw a significant increase of 65%, followed by a drop in 2020, but then surged again in 2022 by 88%.
A comparison of natural gas CPI trends across different regions shows that the Twin Cities (MSP) has largely mirrored the national trend. The volatility of natural gas CPI is evident, with standard deviations ranging from 8 to 34 points over the years.