Many manufacturers not only use natural gas in their processes but also use electrical power generated by natural gas, so the current upswing in the price of natural gas is putting the squeeze on U.S. manufacturers. The National Association of Manufacturers predicts by this fall the wholesale price of natural gas prices could be about $7 per 1 million Btu, compared with the current price of about of $5.50, and compared with a price in the range of $2 to $3 throughout the 1990s.
Federal Reserve Chairman Alan Greenspan, testifying in June at a House committee hearing on natural gas, said that current high gas prices (74% above last year's level) could rise further through the summer and into next winter. He said that natural gas prices are likely to remain high in the immediate future because last winter depleted gas stocks to near historic lows and the U.S. has been unable to import significant amounts of liquefied natural gas (LNG) to boost supplies. According to the Energy Information Administration, at the end of May, there was a natural-gas inventory of 1.2 trillion cubic feet, 38% below the inventory for the same time in 2002, and 28% below the average for the previous five years.