WASHINGTON, July 21 — In the corridors of global energy markets, a quiet but consequential shift has been underway: the price of natural gas in the United States, long tethered to crude oil, has broken free. Against this backdrop, the fundamental forces of supply and demand now hold sway. For decades, the two hydrocarbons moved in tandem; oil dictated the rhythm and gas followed.
But recent years have seen a decoupling, with US natural gas prices now trending instead with coal. What is at stake?
The electricity bills of millions of American homes and businesses.
The Numbers That Define the Market
As of 20 January 2022, the benchmark Henry Hub price stood at US$3.87 per million British thermal units (MMBtu) — equivalent to $13.2 per megawatt-hour (MWh). That figure, drawn from a moment before the current date, offers a reference point in a market prone to volatility. The highest weekly peak ever recorded remains the January 2005 spike of US$14.49 per MMBtu ($49.4 per MWh), a reminder of how quickly prices can surge.
Natural gas pricing is expressed in currency per volume — per thousand cubic feet or per thousand cubic metres — or per energy content. For rough comparisons, one million Btu is roughly equal to 1,000 cubic feet of pipeline-quality gas.
That pipeline-quality gas carries an energy value slightly higher than pure methane, which stands at 1,012 British thermal units per cubic foot. The wider picture: these are not arcane technical details. They matter because natural-gas-fired power plants often set the marginal price of electricity across many US markets.
The Fracking Revolution and Its Ripple Effects
The surge in hydraulic fracturing for oil and gas that began in 2012 drove US gas prices lower — a development that did not go unnoticed in Asia. Discussions emerged in Asian markets about importing gas indexed to the Henry Hub, a departure from the oil-linked contracts that had long dominated international liquefied natural gas trade.
Yet the decoupling from oil means that US electricity costs
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