Why are natural gas costs going up?

As with other markets, the cost of natural gas is affected by the laws of supply and demand. Natural gas demand increased this summer due to a stronger economy and warmer than normal weather, which resulted in increased use of natural gas-fired generation to meet peak demand for cooling. These events caused the price of natural gas to increase throughout the summer and affected the amount of natural gas available to distribution companies, like Kansas Gas Service, for injection into storage.

Hurricanes Katrina and Rita have also had an affect. Production facilities in the Gulf Coast were damaged by the hurricanes, which forced natural gas and other petroleum product prices even higher. Although Kansas Gas Service does not acquire any of its gas supply from the Gulf Coast region, storms did affect natural gas prices nation wide.