February 21, 2014

If you heat anything with natural gas - your house, your hot water, your swimming pool - you may be rather anxious to see how the price of natural gas has risen in the past two years - especially in February of 2014!

In April of 2012 the SPOT price of natural gas was less than $2.00 a million BTUs. In mid-February it's reaching over $6.00 a million BTUs - a 200+ % increase in less than 2 years!

My advice here is don't let anyone panic you into buying a long term natural gas contract or a solar heating system based upon that information! Yes it is very likely that the price you actually pay for natural gas will go up a the next quarterly adjustment (Natural gas prices are adjusted by the carriers - Union Gas and Consumers Gas - every 3 months in Ontario), but it will most likely be very modest.

The price of natural gas is not regulated the way the price of electricity is. Disruptions and heavy demand can cause its price to jump quickly, and oversupply causes the price to drop. In 2005 the price of natural gas skyrocketed to over $15.00 a million BTUs because of hurricane Katrina and bounced again to over $13.00 a million BTUs in 2008 due to hurricane Ike.

The price for natural gas has since plummeted, and had been at the lowest level in 10 years until, the very cold weather this Winter caused a larger than normal demand and some extraction & shipping difficulties (plus a generous amount of speculative buying and selling I'm sure), caused the price to rise. The warmer Spring weather will see a return to "typical/normal" prices.

"Experts" expect the price of natural gas to stay flat for a significant period due to the gas supply surpluses created by fracking. Unless the environmentally damaging process of fracking for oil & gas is stopped, natural gas prices are unlikely to rise very much or very fast.

There are very good and very valid reasons to heat your pool with a solar system - cost saving, environmental benefits, lengthening the swimming season - but don't let anyone tell you that you should because we're running out of natural gas or the its price is about to go through the roof!