I mentioned in a prior blog, the lower natural gas prices this year. However, I didn't realize that natural gas prices are 60% lower than they were last winter. I read this in an Associated Press article in the Money section of the Evansville Courier & Press. The article cautioned that natural gas prices are volatile and can shift at any time. Yet, based on current prices heating bills this winter should be about 20-30% lower than last winter. The actual natural gas cost is between 30 and 50% of what's on the consumer's bill; the rest of the bill pertains to the cost of processing the gas, transporting it via pipeline, local distribution and customer service.

It always sounds great to save money, but how is this huge of a reduction in cost going to promote conservation? Are the supplies just so abundant that our utilities can justify slashing prices this much? I am definitely not in favor of utilities jacking up prices and using the extra cash simply for bonuses for the top executives, but at the same time, I think cutting prices this much sends the wrong message to consumers. I don't proclaim to understand how the natural gas market operates or fluctuates. However, if the prices stay low, aren't we encouraging an exhaustion of existing supplies and overburdening our natural gas infrastructure? Why not keep the prices higher and use the difference for alternative energy research and development? In other words, can't the federal government mandate that utilities supplying natural gas turn over at least some of the extra revenue as a form of a tax, to help fund alternative energy projects? If more laws are passed, such as the Lehe bill proposed in Indiana, to require utilities to obtain a certain percentage of their energy from renewable sources, utilities may seek a way to keep prices of fossil fuels a little higher and use the extra revenue to pay for alternative energy sources. I'm not sure how exactly this would work, but I am really troubled by dropping prices on fossil fuels such that people will continue to use as much as possible. When these supplies are threatened or diminish significantly, consumers may be paying a fortune just to heat their homes with whatever energy source is available. If we instead push utilities to use extra funds to expand their energy portfolio to include more alternative energy sources, we may have a more secure and less volatile energy market in the future.