American Oil and Gas Reporter - November 2022 - 83

EIA: Expect Higher Winter Gas Bills
WASHINGTON-In its Winter Fuels
Outlook, the U.S. Energy Information
Administration forecasts that U.S. households
that primarily use natural gas for
space heating will spend an average of
$931 on heating this winter (October-
March), which is 28% (or $206) more
than last year.
EIA notes that natural gas is the
primary heating fuel for 47% of U.S.
homes, according to the U.S. Census Bureau's
2021 American Community Survey.
The retail price of natural gas and the
amount of natural gas consumed determine
how much households spend on winter
natural gas bills.
This winter, EIA says, higher retail
natural gas prices are the main driver for
the expected increase in natural gas bills.
On average, EIA predicts retail natural
gas prices will rise 22%, from $13.02 an
FIGURE 1
Average Winter Retail Price of U.S. Natural Gas For Residential Customers by Region
Dollars per thousand cubic feet
$18
$16
$14
$12
$10
$8
$6
$4
$2
$0
2012-13
2014-15
2016-17
2018-19
Data Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), Winter Fuels Outlook
Victoria Express Linking To
Upper Gulf Coast System
HOUSTON-Adams Resources & Energy
Inc. subsidiary Victoria Express Pipeline
L.L.C. says it will construct a new pipeline
connection to Max Midstream Texas LLC's
Upper Gulf Coast Pipeline System.
According to Adams, the VEX pipeline
system connects the central Eagle Ford
Shale near Cuero, Tx., to the GulfMark
Terminals LLC Cuero terminal facility
and to the GMT POV terminal facility at
the Port of Victoria, Tx. Max Midstream's
Upper Gulf Coast pipeline system spans
points both up- and downstream of the
VEX Pipeline System, providing incremental
crude oil supply potential, as well
as new market delivery points to VEX
customers to the dock at Point Comfort
via the Max Midstream system. Potential
future connection points via the Max
Midstream system include the Kinder
Morgan Crude & Condensate pipeline,
P66 Gray Oak Pipeline and the Taft Hub
near the Port of Corpus Christi.
" The connection to the Max Midstream
system will allow VEX to provide shippers
with more diversity of supply, and through
the Max Midstream system, access to
important additional crude oil markets,
which will complement the existing Port
of Victoria market, which the VEX
Pipeline serves today, " Comments GulfMark
Energy Inc. President Greg Mills.
" I am pleased to see the GulfMark
team continue to execute on the strategic
plans surrounding the VEX Pipeline System, "
says Adams Chief Executive Officer
Kevin Roycraft. " This connection with
Max Midstream is the next step toward
maximizing this asset's potential. " ❒
NOVEMBER 2022 83
2020-21
STEO forecast
West
Northeast
South
U.S.
average
Midwest
Mcf last winter to $15.95/Mcf this winter.
EIA says it expects retail natural gas
prices in the Midwest will increase the
most nationally, by 27% compared with
last winter, to $13.80/Mcf (Figure 1).
The increase in retail prices reflects
rising natural gas spot prices over the
past year, EIA observes, adding that it
forecasts the Henry Hub natural gas spot
price will increase 54% from last winter
to average $7.26 an MMBtu. It notes that
changes in natural gas spot prices typically
are reflected in the retail price over a
period of months because of the way
these costs are handled in regulated rates.
EIA goes on to say that spot price
spikes from previous years can affect current
retail prices. For example, it illustrates,
regional natural gas spot prices approached
record highs following Winter Storm Uri
in February 2021, especially in the Midwest.
Following that price spike, spot
prices quickly returned to pre-storm levels.
Many utility companies in states affected
by the storm filed motions with their
states' public utility commissions detailing
plans to recover the extremely high natural
gas costs they had incurred following the
winter storm, EIA observes. For example,
it illustrates, in Colorado, these plans add
a line item charge to utility bills for the
next several years to spread the cost out
over an extended time.
This winter, EIA predicts colder temperatures
and slightly more household
consumption to contribute to higher natural
gas bills compared with last winter.
For households that use natural gas as
their primary space heating fuel, EIA
says it expects average consumption this
winter to increase 5%, or 58.4 Mcf, from
last winter.
❒
2022-23

American Oil and Gas Reporter - November 2022

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