Why natural gas is expensive

Kentuckians who heat their homes and businesses with natural gas already are aware that it is costing more to stay warm this winter.

Now many are asking why and how natural gas became so expensive, and what role the Kentucky Public Service Commission (PSC) plays in regulating gas costs.
While the effects of hurricanes Katrina and Rita on the oil and gas facilities along the Gulf Coast have dominated discussions of energy prices in recent months, the PSC has been concerned about rising natural gas costs for more than two years. The PSC began warning consumers in June 2003 about the rising cost of natural gas.

Natural gas prices are higher for essentially one reason: Supply has not kept up with demand. The wholesale price of natural gas is entirely unregulated. It rises and falls with market conditions.

Louisville Courier-Journal