The average price for natural gas fluctuates quite a bit from state to state, with the states on the East Coast normally paying quite a bit more than most others. In general, states that either produce large quantities of natural gas or are served by major gas pipelines, such as Utah, Alaska, Colorado, Wyoming and most of the northern Midwest states, have the cheapest natural gas prices.
The state that typically has the highest natural gas prices is Hawaii, due to the increased costs associated with shipping it across the Pacific Ocean.
While the proximity to a major supply of natural gas is one of the biggest factors in its price, it is not the only factor involved. Supply and demand also plays a major role in determining the price, as does the local regulatory environment. Another factor that affects the price that a consumer pays for natural gas is the specific cost of the natural gas flowing into the local distribution system, which is determined by how costly it is to extract the gas from the ground and to process it.
There are generally two different ways to look at the price of natural gas. The first is the wellhead price, which is what a company pays for the gas coming directly from the well. This price is typically quite low, as the gas has not been transported or processed. The second price is the residential price, which is what regular consumers pay.