The Federal Energy Regulatory Commission (FERC) will announce new rules on Thursday that could force the wholesale price of natural gas to jump by as much as 50 cents per million BTUs.
The price increase will affect some of the biggest gas producers in the country.
Natural gas producers are already paying an average of $3.68 per million btu, while the average wholesale price is $3,873 per million.
The rules will force gas producers to raise prices for the first time since 2006.
Gas prices are currently hovering around $3 a million btU, but a new rule is expected to boost prices to as much $3 per million, which would mean prices would rise by 50 cents for every million BTU of natural product.
Gas producers say they will have to hike prices because the increase in gas prices will hurt their business, which is already struggling to keep up with demand.
The cost of natural resources, which are a huge part of a nation’s economy, have been rising at a rapid rate for the past few years, according to a new report from the National Association of Manufacturers.
“The average cost of energy in 2017 was $1,800 per year, which equates to an annual inflation rate of approximately 6.7 percent,” said Michael Romm, the president and CEO of the National Manufacturers Council.
“In other words, the cost of production is going up at a faster rate than the cost to the consumer.”
Natural gas prices have been increasing at an annual rate of roughly 7 percent over the past several years, but the increase has been more dramatic than in other energy sectors.
In 2016, the average price of gas was $2.96 per million and the average cost to produce it was $3 billion.
That is a decrease of nearly $2,000 per million of natural resource consumption.
Natural resource consumption was up by an average 24 percent from 2016 to 2017, but that rate has continued to drop, and it is expected that the number of natural producers will continue to decrease.
The average price for natural gas has also been increasing in the past five years, and according to an industry report from 2017, natural gas is expected cost the average consumer $6,000 more in 2019.
The natural gas industry is expected lose $3 trillion by 2030, and the impact of this increase will hit every family, said Robert Litan, an analyst with Bloomberg New Energy Finance.
“When you are a gas company and you are the biggest producer in the world, and you have to deal with this type of price increase, you are losing a lot of money,” Litan said.
“And this will be a big factor for the future.”
Some companies are already warning that they may go bankrupt, but others say they are prepared to survive the price hike.
“We can’t do this without your support, we need your help,” said Bill Clark, CEO of American Natural Gas.
“Our goal is to get to zero natural gas production by 2020, and we have been working on that to achieve that.”
But some gas producers aren’t prepared to see prices increase, and they are pushing for the federal government to step in.
“As long as we don’t have a new FERC rule, we’re going to have to continue to increase the prices of gas, because that will put us in a position of having to go out of business,” said Kevin McBride, president of the North Dakota Independent Gas Association.
“That’s not a good situation for the American people, it’s not going to be a good environment for North Dakota.”
Litan says that if the price increase goes through, there is no way to stop it.
“If we can’t raise gas prices, the only thing we can do is we have to go bankrupt,” Liton said.
The gas price hike is expected in the coming weeks.