Natural gas prices are volatile. Their price pattern can generate large fortunes. The volatile pattern can also generate painful bankruptcies for those on the wrong side of the bet.
People who bet on those prices need to recognize the risk. Most people assume that power generators who are planning to meet demand in the next few years with natural gas burning power plants are betting that they understand the potential risks.
What most people do not understand is that there are power generators who are isolated from the risk of rising natural gas prices by the fact that they operate in markets where all of their competitors have the same issue, or by the fact that they operate in states where there is an almost automatic electricity price protection mechanism that adjusts for variations in fuel price. In those states, the consumers who do not have a big say in the choice of power generation facilities are the ones who are taking the fuel price risk.
Consumer groups should be supporting new nuclear power plant projects that provide reliable power without a fuel price risk to hedge against the very real risk that natural gas prices are going to skyrocket within the next 2-4 years. Unless our economy goes into a full blown depression, I am almost sure that gas that is sold to power generators will exceed $10 per million BTU for at least one month sometime between now and the end of 2015. I am also fairly certain that the price increase will not be a temporary blip.