The impact of dynamic climate normals to the natural gas industry

A comparison of normal temperatures between the past 10 and 30 years for climate stations across the most heavily populated areas of the central and eastern U.S. clearly provides significant differences. Reliable natural gas industry data to correlate temperatures with natural gas demand for heating and cooling needs only goes back 10 years; thus correlations with temperatures rely on the most recent status of the climate. Several examples will be provided of how different climate normals can impact modeling or projections of natural gas demand and price movement. Hence, dynamic climate normals providing multiple perspectives of the current state of climate are needed versus static climate normals to better quantify ranges of natural gas usage.