Plummeting natural gas prices helping consumers and companies

Natural gas prices are hovering near their lowest levels in a decade, as mild winter temperatures have eroded demand for the hydrocarbon throughout the U.S.

The U.S. has rapidly become the world's largest producer of natural gas, a feat once deemed impossible by some lawmakers. The expanded use of hydraulic fracturing – more commonly known as fracking – has helped private firms tap into previously unreachable natural gas reserves, ushering in a new era in the nation's energy production and security.

The rise in fracking wells across the U.S., coupled with temperate winter weather conditions, has fueled an uptick in natural gas supplies. Experts contend that the confluence of such fundamental supply and demand variables has effectively reduced heating costs for companies and homeowners in the U.S., allowing businesses to institute cost reduction campaigns aimed at further bolstering energy savings.

The Associated Press reports that natural gas prices have continued to fall since the beginning of this year, dropping to $2.30 per 1,000 cubic feet – a decline of 69 cents – since January 1. The strategic sourcing of natural gas has, as a result, become much less convoluted for companies that rely on the hydrocarbon as a heating source. Commodities trader Stephen Schork told the news provider that if demand continues to decline, the price of natural gas could potentially fall below $2 per 1,000 cubic feet.

"There's just too much out there," he said. "And there won't be enough demand to solve the supply issue this summer."

Approximately 50 percent of all Americans use natural gas to heat their homes, and they have welcomed the decline in energy prices. According to data from the Energy Information Administration, the average natural gas heating bill has fallen 13 percent thus far this winter, underscoring how the nation's booming fracking industry and the ongoing temperate weather conditions are benefiting consumers.

Homeowners are not the only group benefiting, according to the AP, as chemical companies have increasingly used natural gas as a raw material. Replacing other, more expensive substances with natural gas has enabled chemical firms to implement business cost reduction initiatives, bolstering profits. Moreover, they have further cut costs because natural gas sourcing is relatively simple, given the nation's substantial stockpiles of the fossil fuel.

With crude oil prices continuing to rise, a growing number of lawmakers are pushing for the expanded use of natural gas in the U.S. Still, experts said that although prices are currently low, that does not necessarily mean they will stay at such levels over the next few years.