Finally, some good news: Home heating costs should be lower this winter due to lower natural gas prices

There is finally some good news on the inflation front: your home heating bill should be lower this year thanks to lower natural gas prices, according to a new forecast by the U.S. Energy Information Administration (EIA).

Home heating costs in the Midwest are expected to be $150 lower than last year, saving families 20.5 percent on their annual heating expenses, which you can see in the graph below.

The decline in natural gas prices for residential home heating is significant. Last year, residential natural gas prices were 12 dollars per thousand cubic feet (Mcf) of natural gas; this year, they are projected to be below $10 Mcf.

Falling natural gas prices for families are due to lower overall natural gas prices nationally. Last year, the war in Ukraine and U.S. exports of liquified natural gas resulted in wholesale prices averaging $5.66 per Mcf. But this year, European gas inventories have been higher, and natural gas production has increased, resulting in gas prices falling by 45 percent, averaging $3.12 per Mcf.

The United States could have even lower home heating bills if we produced more natural gas. To do this, we need more natural gas pipelines. Unfortunately, federal policies enacted by the Biden administration have made it much more difficult to approve natural gas pipelines, thus limiting our ability to increase natural gas production.