new York – Prepare for a nasty surprise on your winter heating bills.

After years of exceptionally low levels, the price of natural gas in the United States has more than doubled since the same period last year. Wholesale prices in Europe and Asia are more than five times what they were a year ago.

Soaring costs have coincided with a robust recovery from the pandemic recession, with more homes and businesses burning all forms of fuel. This intensified demand is poised to contribute to higher heating costs in many parts of the world.

After enjoying an extended period of low prices, natural gas consumers face the burden of much more expensive fuel – and the prospect of much higher heating bills this winter.

“Consumers got used to very low prices last year because with the pandemic everything was shut down,” said Mark Wolfe, executive director of the National Energy Assistance Directors Association. “Now everything is coming back online, the industry is coming back and natural gas is being reused in huge quantities. And that is pushing the price up.”

In Europe and Asia, some companies that rely on natural gas have been forced to close their doors due to rising prices. Four small UK energy companies have gone bankrupt in recent weeks. Fertilizer producers, who use natural gas as a raw material, are in difficulty. The same is true of heavy industries that require significant heat, such as aluminum or cement producers.

Power companies in Europe and Asia are engaged in bidding wars for shipments of liquid natural gas, driving up costs. Prices are also rising in the United States, which converts some of its natural gas into liquid and ships it to Europe and Asia. These higher costs show up in the gas bills of consumers around the world. Analysts expect these prices to rise further during the winter, when customers rely most on fuel.

The main reason natural gas prices have jumped is that demand for fuel has accelerated as economies recover from the damage caused by the pandemic. But there is also another key factor: there is simply less gasoline on the market.

The factors that have reduced supply are varied. When the pandemic raged, oil prices plummeted and producers ran out of money to drill. Once they cut back on oil drilling, they also got less gas back, as most wells pump both oil and gas out of the ground.

In addition, Europe burned a significant amount of natural gas last winter to heat homes in freezing weather, leaving storage tanks with little fuel. Then the summer was less windy than usual, so the wind turbines did not generate as much energy as expected. This, in turn, led countries to burn more natural gas, further depleting reserves.

At the same time, Russia has reduced its supply of natural gas to Europe, noted Carlos Torres Diaz, analyst at Rystad Energy. All of these factors combined to push natural gas prices in Europe to around $ 26 per million BTUs, down from just $ 4 at the same time last year.

A similar trend occurred in China and Japan: Power plants burned more natural gas than usual to cool homes on a series of unusually hot days. Prices have jumped to $ 29 per million BTUs in Asia, Rystad Energy calculated, from $ 5 a year ago.

Ira Joseph, analyst at S&P Global Platts, noted that demand for liquid natural gas has been robust, even at much higher prices. In Japan, Pakistan, Bangladesh, Taiwan and Indonesia, prices are so high that power companies are likely to burn oil instead, according to Rystad. For the terrestrial environment, this could become an alarming trend. Burning oil generates more climate-damaging emissions than burning natural gas.

The wholesale price of natural gas in the United States has exceeded $ 5 from $ 2 to $ 3 in most of the past two years. It’s the highest price since 2014, though it’s well below levels reached in the 2000s, when prices exceeded $ 10 per million BTUs.

And drought-stricken places like Brazil have found themselves with less hydropower and burning more natural gas instead, increasing global demand and leaving even less gas in the market.

For customers in the United States, Europe and Asia, winter heating bills could be significantly higher. In the United States, according to the National Energy Assistance Directors Association, natural gas bills could be up to 30% higher for consumers this winter, with the average cost to heat a home reaching $ 750, up from $ 572 in the past. same months last winter.

Oil prices have also risen – to nearly $ 80 a barrel in Europe and $ 75 in the United States. As with natural gas, one of the main reasons is that producers have sharply cut back on drilling during the pandemic. Another reason is that some electricity providers switch to burning oil for power generation if the price of natural gas gets too high, thereby increasing the demand for oil and pushing the prices even higher. The cost of heating homes with oil or propane could increase by 40%, according to the NAEDA.

All of this could cause difficulties for customers who were already in difficulty. The energy aid association helped a record 1.2 million households pay their air conditioning bills over the summer – a level of aid up 46% from the previous year. last year and the highest in the program’s 40-year history. The increase was due in part to the higher temperatures that many experts have attributed to climate change.

The need for assistance during the winter is likely to increase for low-income families, as federal unemployment assistance has recently run out.

“Ending unemployment for these families puts them at greater risk for all expenses, not just energy bills,” Wolfe said.

Natural gas producers in the United States could benefit from higher prices for gas sold in the United States or abroad. However, there is a limit to what they can export to Europe and Asia. Facilities along the US Gulf Coast that export liquid natural gas, or LNG, are all shipped at full capacity.

Some companies wanted to expand these export facilities or build new ones. But because gas prices were so low in recent years, these companies couldn’t find enough buyers who wanted to sign long-term contracts. That could change, however, as buyers scramble for fuel.

“A lot of them might rethink their strategy and say, ‘OK, maybe it’s worth signing long-term contracts for a more certain price, rather than being a risk and trying to get gas or LNG in this volatile market, “” Diaz mentioned.

Once these export facilities have entered into longer-term contracts, they could secure the additional investments they need to complete the projects.