<PAGE>   1
                                                                      Exhibit 12


                     COLUMBIA ENERGY GROUP AND SUBSIDIARIES
Statements of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
                                 ($ in millions)


<TABLE>
<CAPTION>
                                                                                 Twelve Months
                                                                               Ended December 31,
                                                             ---------------------------------------------------
                                                              1997       1996        1995       1994       1993
                                                             ------     ------     -------     ------     ------
<S>                                                          <C>        <C>        <C>         <C>        <C>
Consolidated Income (Loss) from Continuing Operations
 before Income Taxes, Extraordinary Item and Cumulative
 Effect of Accounting Change                                  392.2      337.5      (643.0)     392.2      288.1

Adjustments:
  Interest during construction                                 (3.0)      (1.1)      (20.2)      --         --
  Distributed (Undistributed) equity income                     3.6        1.5        (7.9)      (0.9)      (0.1)
  Fixed charges *                                             182.0      184.6     1,061.3       33.7      120.0
                                                             ------     ------     -------     ------     ------
    Earnings Available                                        574.8      522.5       390.2      425.0      408.0
                                                             ------     ------     -------     ------     ------

Fixed Charges:
  Interest on long-term and short-term debt                   145.6      150.8       987.2        0.7        3.1
  Other interest                                               15.4       13.5        53.6       14.1       98.4
  Portion of rentals representing interest                     21.0       20.3        20.5       18.9       18.5
                                                             ------     ------     -------     ------     ------
Total Fixed Charges **, ***                                   182.0      184.6     1,061.3       33.7      120.0
                                                             ------     ------     -------     ------     ------

Ratio of Earnings Before Taxes to Fixed Charges                3.16       2.83         N/A(a)   12.61       3.40
                                                             ======     ======     =======     ======     ======
</TABLE>

(a) To achieve a one-to-one coverage, the Corporation would need an additional
    $671.1 million of earnings in 1995.

*   Amounts for the twelve months ended December 31, 1993 through December 31,
    1996 have been restated to conform to 1997 presentation.

**  This amount excludes approximately $230 million and $210 million of interest
    expense not recorded for the twelve months ended December 31, 1994 and 1993,
    respectively. This amount includes interest expense of $982.9 million 
    including the write-off of unamortized discounts on debentures recorded in 
    1995. Reference is made to the Statements of Consolidated Income for the 
    twelve months ended December 31, 1995, as reported on Form 10-K and Note 2 
    of Notes to Consolidated Financial Statements of the Corporation's Annual 
    Report on Form 10-K for the year ended December 31, 1995.

*** This amount excludes $8.6 million of interest expense not recorded with
    respect to the registrant's guarantee of LESOP Trust's debentures for the 
    twelve months ended December 31, 1994 and 1993.