Natural Gas Prices Soar Amidst Rising Electricity Demand
Natural gas prices have been rising in recent years due to increased demand for electricity generation.
A review of data from the US Energy Information Administration (EIA) and the Bureau of Labor Statistics (BLS) shows that natural gas prices have inflated by 43% compared to all items CPI inflation of 76% since 2000.
The Twin Cities' natural gas CPI was relatively flat between 1986 and 1999, but exploded by 65% from 112 in 2000 to 186 in 2008. It dropped and was 41% lower by 2020 at 110, but shot up again by 88% to 206 in 2022.
The volatility of natural gas prices is a concern, with a standard deviation of 28 points compared to the medium volatility of all items CPI of 20 points. This means that natural gas prices are subject to wider swings in both directions.