This guide explores the various aspects of natural gas pricing across the United States, offering insights into where you can find the cheapest and most expensive rates, as well as how these rates differ between residential and industrial users.

All data is sourced from the latest (May 2024) Energy Information Administration (EIA.org) and the Bureau of Labor Statistics (BLS.gov) energy market data.

Top 10 States with the Cheapest Natural Gas Rates

Natural gas rates are typically lower in states with abundant local production, efficient distribution networks, and competitive market dynamics. States in the Gulf Coast region, such as Louisiana and Texas, benefit from proximity to major natural gas fields and infrastructure. These factors reduce transportation costs and supply chain complexities, leading to lower prices for consumers.

Additionally, states with regulatory environments that encourage competition among suppliers often see more favorable rates.

Top 10 States with the Highest Natural Gas Rates

States like Hawaii and Alaska, which are geographically isolated, incur high transportation costs to import natural gas.

Similarly, densely populated states in the Northeast, such as New York and Massachusetts, may experience higher rates due to limited pipeline infrastructure, higher demand, and regulatory measures aimed at environmental protection and safety.

Industrial vs Residential Natural Gas Rates

Natural gas rates vary significantly between industrial and residential users. Industrial users typically enjoy lower rates due to higher usage volumes and the ability to negotiate long-term contracts. These users also often have the flexibility to schedule their gas consumption during off-peak times, taking advantage of lower prices. In contrast, residential users pay higher rates per unit of gas consumed, partly because of the costs associated with maintaining and servicing the extensive network required to deliver gas to individual homes.

States with the cheapest industrial natural gas

Industrial natural gas rates are lowest in states that combine high production levels with supportive infrastructure and market conditions. These states often have policies that encourage industrial growth and offer incentives for large-scale energy use. The Gulf Coast states, with their extensive pipeline networks and storage facilities, are prime examples where industrial users can secure favorable rates.

States with the most expensive industrial natural gas

On the other hand, states with the highest industrial natural gas rates often face challenges such as limited local production, high transportation costs, and regulatory hurdles. States on the West Coast and in the Northeast, for example, may experience higher rates due to these factors. Additionally, environmental regulations and policies aimed at reducing carbon emissions can also drive up costs in these regions.

Industrial natural gas prices by state

Industrial natural gas prices can vary widely by state, influenced by factors such as local production capabilities, infrastructure, regulatory environment, and market demand. States with extensive natural gas infrastructure and production capabilities typically offer the lowest rates, while those that rely heavily on imports and have higher transportation costs tend to have higher rates.

Top Natural Gas Producing States

The leading natural gas-producing states include Texas, Pennsylvania, Oklahoma, Louisiana, and New Mexico. These states contribute significantly to the national supply, benefiting from rich natural gas reserves and extensive extraction infrastructure. High production levels in these states help stabilize prices and ensure a steady supply for both residential and industrial users.

Which states generate the largest percentage of their electricity from natural gas?

States such as Florida, Texas, California, New York, and Nevada generate a large percentage of their electricity from natural gas. These states rely on natural gas due to its efficiency, lower emissions compared to coal, and the ability to quickly adjust power output to match demand. The availability of natural gas infrastructure and the push for cleaner energy sources drive this trend.

How Natural Gas is Used in Each State

• Residential Use: Heating homes, cooking, and water heating are the primary uses of natural gas in residential settings. States with colder climates typically see higher residential usage.
• Commercial Use: In commercial settings, natural gas is used for heating buildings, powering commercial appliances, and sometimes for electricity generation.
• Industrial Use: Industrial applications of natural gas include fuel for manufacturing processes, chemical production, and electricity generation. States with large industrial sectors consume significant amounts of natural gas.
• Electricity Generation: Power plants across the country use natural gas to generate electricity, favored for its lower carbon footprint and efficiency compared to coal.

How Natural Gas Rates Work

Natural gas rates, like electricity rates, are typically based on the amount of energy consumed. However, instead of being measured in kilowatt-hours (kWh), natural gas consumption is measured in terms of therms, British thermal units (BTUs), or cubic feet. Here’s a detailed look at how natural gas rates work for both residential and industrial customers:

Measurement Units

• Therms: A therm is a unit of heat energy equivalent to 100,000 BTUs. It’s commonly used in billing for residential and commercial natural gas usage.
• British Thermal Units (BTUs): A BTU is the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit. It’s a smaller unit of measure often used in heating and cooling industries.
• Cubic Feet: Natural gas can also be measured in cubic feet (cf) or thousands of cubic feet (Mcf), indicating the volume of gas consumed.