Gas crisis talk rattles confidence in nation's economy.(natural gas prices soar)

Recent soaring natural gas prices, influenced in part by colder than expected weather and dwindling storage inventories, along with the memory of similar wholesale price spikes in the winter of 2000-2001, have sparked a flurry of talk about a "natural gas crisis."

Whether the current run-up in prices is a short-term deviation that will be followed by a future decline is the subject of debate.

"We've got rampant volatility in the market," said Tim O'Brien, general manager of supply planning for Public Service Company of New Mexico, quoted in the Albuquerque Journal.

President George W. Bush was "greatly" concerned about U.S. energy costs, the White House said on February 28. Sen. Tom Daschle (D-SD) called for an investigation into the price spikes.

While no one is currently predicting supply disruptions, economic jitters no doubt are responsible for the anxious reaction to rising prices. "The nation's economy is on the cusp once again of an energy crisis, a financial penalty that has repeatedly triggered recessions," said the Atlanta Journal-Constitution. (Some observers claim that every recession since World War II has been preceded by a run-up in energy prices.) Hedging its bets, however, the newspaper continued that "the danger could dissipate within weeks."

Uncertainty Is Problem

The uncertainty of the market is itself a major problem. High prices have so far not translated into a wave of new drilling, the Houston Chronicle reports, because oil and gas companies do not appear to be convinced that the prices will be sustained for any significant period of time.