WASHINGTON – Natural gas producers predicted Thursday that consumers will see lower heating prices this winter because there's plenty of natural gas already in storage and more is being produced.
The Natural Gas Supply Association said in a report that there are record supplies of the fuel in storage, well above normal levels as the winter heating season approaches. It said that wholesale prices already have been declining significantly.
"There is good news for consumers going into this winter. For the first time in four years we're seeing downward pressure on prices," said Chris Conway, the association's chairman and also an executive at ConocoPhillips (COP).
The NGSA does not report gas prices, but the association produced figures from other sources that showed a dramatic drop in wholesale natural gas prices this year.
Appearing Thursday at a Hoover, Ala., pumping station that supplies fuel made of 85 percent ethanol produced from corn, President Bush said, "You know the price of gasoline has been dropping and that's good news for the American consumers. It's good news for the small business owners, good news for the farmers."
"But it's very important for us to remember that we still have an issue when it comes to dependence on foreign oil," he said. "And one way to become less dependent on foreign oil is for us to develop new ways to power our automobiles right here in America."
A year ago, as the industry faced major losses of supply because of Hurricane Katrina, wholesale prices going into the winter ranged from around $12 per thousand cubic feet. Recently, the prices dipped below $4.50 per thousand cubic feet at the wholesale level.
Conway said that overall, natural gas production this year "will be substantially higher" than in 2005, as the industry steadily recovered from the hurricane a year ago and stepped up onshore production.
Consumers have faced soaring winter heating bills for the last three winters.
While lower prices are expected this winter, Conway said the supply picture could change if there is an unusually cold winter season, and that could cause the cost to consumers to increase.
The NGSA is the trade group representing natural gas producers.