At the national level, natural gas reserves, in other words, the gas still underground, are more than adequate for the foreseeable future. The reason that the available natural gas supply is low is that for the last several years the mild winters led to energy surpluses, which resulted in low prices. The price of natural gas became low enough that the companies that explore for and produce natural gas had little incentive to drill wells. This reduced the overall supply of natural gas in storage. In addition, last summer gas producers diverted the natural gas supply that was in storage on the national level for use this winter to the Southwest to produce electricity for air conditioning because of the extremely hot weather in that part of the country.
Available supply is also low because the demand for natural gas has significantly increased .
The biggest impact on increased demand for natural gas this winter is the colder than normal weather in nearly every state. This means that consumers are using more natural gas to heat their homes, driving up demand and reducing short-term supply. In addition, we have a very strong national economy that is consuming all forms of energy at higher than anticipated levels. The high use of electricity is severely impacting the demand for natural gas because natural gas has become the preferred fuel for producing electricity nationwide. Natural gas also is the preferred fuel for heating homes throughout the country.