EIA Raises Natural Gas Price Forecast Following Increased Heating Demand Amid Severe Winter Weather
Natural gas prices rose sharply in January, averaging $7.72 per million British thermal units (MMBtu), as cold weather increased heating demand, reduced production, and led to record storage withdrawals during Winter Storm Fern. The drawdown for the week ending January 30 was the largest weekly net withdrawal recorded in the history of EIA’s Weekly Natural Gas Storage Report.
In the February Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) now forecasts U.S. natural gas inventories to end the withdrawal season in late March at less than 1.9 trillion cubic feet. This is 8% below previous forecasts, prompting the forecast for the Henry Hub spot price for February and March to be 40% higher than last month’s STEO.
"Winter Storm Fern caused significant short-term pressure on natural gas markets, but we expect higher prices in the near term will increase drilling, resulting in higher production later this year and helping to replenish storage," said EIA Administrator Tristan Abbey. "Ultimately, this will result in lower natural gas prices next year than we had forecast. Our updated forecast anticipates Henry Hub prices will average $4.30/MMBtu in 2026 and $4.40/MMBtu in 2027, 5% lower than our January forecast."
Other key takeaways from the February STEO are below.
Venezuela: The evolving situation in Venezuela remains a key uncertainty in our forecast for oil production and exports. In January, Venezuela’s crude oil exports began to recover following December’s oil blockade and sanctions, as trading companies received general licenses to transport Venezuela’s oil, according to industry reports. Much of this oil was moved to Caribbean storage terminals. Expanded U.S. licenses are expected to restore production to pre-blockade activity by mid-2026.
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TVA Reverses Course on Retiring Two Largest Coal Plants, Documents Show
The nation’s largest public utility says it now would prefer to keep operating two coal-fired power plants it had planned to shutter, changing course before a meeting of its board, which has a majority of members picked by the coal-friendly Trump administration.
In new filings, the Tennessee Valley Authority’s signaled that it wants to ditch closure dates for the Kingston Fossil Plant and Cumberland Fossil Plant in Tennessee, which would require further action from its board. The new plan would still include introducing natural gas-fired plants at both locations.
TVA had intended to shutter its remaining, aging coal plants by 2035 in an effort to reduce greenhouse gas emissions that spur climate change. But the utility, which partners with local power companies to serve roughly 10 million people in seven states, said it is rethinking the coal plant closures because of regulatory changes and increasing demand for electricity.
“As power demand grows, TVA is looking at every option to bolster our generating fleet to continue providing affordable, reliable electricity to our 10 million customers, create jobs and help communities thrive,” TVA spokesperson Scott Brooks said in a statement Tuesday.
But several clean energy groups said extending the coal plants would raise serious questions about TVA’s decision-making process, since the utility has said more natural gas plants were needed to retire polluting coal plants.
“Without even a public meeting, TVA is telling the people who live near these coal plants that they will breathe in toxic pollution from not one, but two major power plants for the foreseeable future,” Gabi Lichtenstein, Tennessee Program Coordinator for Appalachian Voices, said in a news release. “This decision is salt in the wound after ignoring widespread calls for cleaner, cheaper replacements for the Kingston and Cumberland coal plants.”
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Close Coal and Burn Oil, Even Jet Fuel
By Frank Clemente and Fred Palmer; Coal is the Cornerstone, LLC.
Fred Palmer
Frank Clemente
This is the reality:
“In the week ending January 25, 2026, as Winter Storm Fern affected significant portions of the country, coal-fired electricity generation increased 31% from the previous week. .. while generation from solar, wind, and hydropower declined. Grid operators can call upon the coal fleet to increase electricity generation in extreme weather events and other times when demand surges or output falls from other generation sources, a pattern also evident in severe cold snaps in February 2021 and January 2025.” USDOE, January 28, 2026.
It has become increasingly apparent that closing coal plants in the Northeast has not only led to the highest electricity prices in the nation but has also damaged reliability throughout the region. During instances of extreme weather, hot spells or cold waves, utilities struggle to meet the load, the price for electricity explodes and last resort measures need to be put in place. Nothing was more apparent than the cold event impacting the eastern United States during late January 2026. Because coal was gone, and other fuels markedly underperformed, utilities turned to burning oil and even to jet fuel. Consider NY at the peak of the recent cold wave when between NY and New England, analysts estimated they were burning at least 300,000 barrels per day.
In essence, the chickens are coming home to roost in regard to the willy-nilly closing of coal power plants in the United States over the last 15 years. Over 300 coal plants closed, many prematurely while hundreds of billions of dollars were spent on the pipe dreams of wind and solar- sources which consistently underperform in times of greatest need. Organizations responsible for reliability have issued grave warnings but utilities and state regulators have consistently bowed to pressure from anti-coal groups like the Sierra Club, whose primary funder, Michael Bloomberg, has donated $500 “to “close every coal plant in the United States”
As coal plants have closed electric power prices have increased while reliability has been reduced and the United States will likely not be able to meet load demand from an increasingly electrifying modern society. The US is developing a monolithic dependence on natural gas for electricity. Coal generation has been greatly reduced, nuclear at scale is well more than a decade away, wind and solar are intermittent and inherently non-dispatchable, hydro has reached its ceiling and electricity from battery storage is fleeting and too expensive.
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New Report: 2025 Coal Use Saved Americans $30-$40 Billion
A new report by Energy Ventures Analysis (EVA) finds that, in 2025, coal generation served as an important buffer against energy inflation due to rising natural gas prices, electricity demand growth and infrastructure-related costs, delivering $30 to $40 billion in total savings, lowering Americans' power bills an average of $100 to $150 per household.
"Coal generation literally kept the lights on when other fuel sources couldn't deliver during Winter Storm Fern and the bitter cold that has followed. This data now shows, in 2025, coal also put money back in American's pockets," said Rich Nolan, NMA president and CEO. "Fuel diversity is the only readily available lever available to pull to manage consumer energy costs. The cost of our AI-powered future is showing up on Americans' electricity bills; states with greater access to coal generation are in a much better position to manage that price volatility."
Phillip Graeter of Energy Ventures Analysis, the author of the report, said, "This study highlights the practical benefits of fuel diversity in the power sector. In a year marked by higher natural gas prices and stronger electricity demand, access to coal-fired power generation helped limit system costs and protect customers from sharper increases in their electric and natural gas bills. Maintaining optionality in the generation fleet improves reliability, affordability, and resilience in volatile energy markets."
The study, which modeled two different scenarios of the cost impacts for 2025 had there been lower coal usage, specifically found:
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Reinforcing Winter Grid Reliability
The weather predicting skills of a certain groundhog remain up for debate, but Punxsutawney Phil saw his shadow this week and, sure enough, the brutal cold is sticking around.
Eastern states are likely to face frigid temperatures for much of February as the polar vortex pushes arctic air south. The forecasters at AccuWeather say to expect more snow and ice across a large stretch of the country. That’s not welcome news for grid operators who have already seen record power demand across several grids and navigated multiple close calls. On Monday, utilities from the Carolinas down through Florida were forced to ask customers to dial back power usage when demand threatened to overwhelm available supply.
While the nation has so far dodged a grid catastrophe this winter, there’s been far too much white knuckling for anyone to feel good about the state of our power supply. Just this past weekend, the Energy Department issued seven emergency orders, and extended another five, to mitigate the risk of blackouts. This is hardly business as usual. And as the North American Electric Reliability Corp.’s (NERC) new long-term reliability assessment made very clear, the winter grid reliability challenge is only going to get far greater.
NERC found that the nation’s peak winter demand is going to jump by 245 gigawatts (GW) in just the next decade. That’s an enormous number. And as NERC pointed out, most of the resources projected to enter service in the next decade aren’t a good match to meet it. Solar panels and batteries with just a few hours of storage are of little assistance during peak winter demand on a dark, brutally cold January morning.
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