At ACEEE, we focus a lot on electricity, electric efficiency programs and how energy efficiency is the least-cost electric resource. Well, it shouldn’t be a surprise, but there is a parallel and very similar success story for natural gas efficiency.

This is important because while most utility sector efficiency programs remain focused on electricity, natural gas programs account for about 18 percent of efficiency spending nationally, and they have recently come to account for a growing share of these investments.

At a time when resurgent domestic natural gas production and low natural gas prices are regularly in the news, it can be easy to forget that efficiency programs remain the cheapest and least risky natural gas resource. ACEEE’s recent review of the cost of electric and natural gas utility energy efficiency programs, The Best Value for America’s Energy Dollar, updated the research of a previous study.

Guess what? The findings confirm that natural gas efficiency remains the least-cost thermal resource.

The figure below compares the average cost of a therm of saved natural gas from utility programs implemented over eight recent years to the average U.S. price of a therm of natural gas supply. In every year for which we have data, efficiency programs cost less than supply.

Perhaps even more significantly, the average cost of efficiency across these years is nearly flat and is lower than the price of natural gas as far back as the U.S. Energy Information Administration has collected this data.

But beyond the low cost, there is another important dimension to these findings. Particularly in the context of currently (and likely temporarily) low natural gas prices, the relatively consistent cost of efficiency programs means that efficiency investments can act as a hedge to mitigate the price volatility that is a longstanding characteristic of the natural gas market. Natural gas efficiency can protect consumers and utilities from the major fluctuations in the cost of natural gas that often happen within the course of a single year.

Natural gas efficiency remains a great investment. After all, who doesn’t want less cost and more certainty in their lives?


Eric Mackres is manager of local policy and community strategies at the American Council for an Energy-Efficient Economy. This post was originally published at ACEEE's blog and was reprinted with permission.