Natural gas is one of the most affordable heating fuels available in the United States, costing roughly $8.24 per million BTUs at typical efficiency levels. That’s about four times cheaper than electric resistance heating and modestly cheaper than propane. But “affordable” depends heavily on where you live, what you’re comparing it to, and how much of your bill is actually paying for gas versus delivery infrastructure.
How Natural Gas Compares to Other Fuels
The clearest way to compare energy costs is to look at what it takes to produce the same amount of heat. At current national average prices ($0.70 per therm for gas, $0.11 per kilowatt-hour for electricity), natural gas in an 85%-efficient furnace costs about $8.24 per million BTUs. Electric baseboard or space heating, which converts electricity to heat at 100% efficiency, costs $32.24 for that same amount of warmth. That’s nearly four times more expensive.
The picture gets more interesting with heat pumps. Because heat pumps move heat rather than generate it, they effectively operate at around 300% efficiency. That drops electricity’s cost to roughly $10.75 per million BTUs, which is much closer to natural gas, though gas still holds a slight edge at average national prices.
For a 2,000-square-foot home in a moderate climate, a high-efficiency gas furnace (96% AFUE rating) runs roughly $1,000 to $1,400 per year in heating costs. A top-tier inverter heat pump runs $700 to $1,100. So while natural gas is far cheaper than most electric heating, the newest heat pump technology can actually beat it on annual operating costs, especially in mild to moderate climates where heat pumps perform best.
Your Location Changes the Math Dramatically
National averages mask enormous regional differences. According to EIA data from mid-2025, residential natural gas prices per thousand cubic feet ranged from $11.89 in Utah to $57.34 in Hawaii. The national average sat at $25.41, but many states fell well above or below that number.
The least expensive states for residential gas tend to be in the Mountain West and upper Midwest: Utah ($11.89), Idaho ($13.11), Montana ($13.41), New Mexico ($15.82), and Michigan ($16.28). These states benefit from proximity to production regions and established pipeline infrastructure. On the expensive end, Hawaii ($57.34), Maine ($45.34), and Ohio ($44.41) top the list. Hawaii’s cost reflects the obvious challenge of shipping fuel to an island chain, while New England states like Maine often lack the pipeline capacity to keep prices low during high-demand months.
If you live in Utah, natural gas heating is a bargain by almost any standard. If you live in Hawaii, it’s not even a realistic option for most homes. The same fuel can be affordable or expensive depending entirely on geography.
What You’re Actually Paying For
A detail most people miss: the gas itself is often a small fraction of your bill. A sample residential bill from a New York utility shows total gas charges of $93.55, broken down into $76.31 for delivery and just $14.69 for the actual gas supply. That means roughly 84% of the bill covers the cost of maintaining pipelines, operating the distribution network, and providing customer services. Only about 16% pays for the commodity you’re burning.
This matters because even when wholesale gas prices drop significantly, your bill may not shrink by much. The delivery infrastructure costs are relatively fixed. It also means that if you use very little gas (say, only for cooking or a gas dryer), you’re paying a high effective rate per unit of gas consumed because those delivery fees are spread across fewer therms.
Why Prices Fluctuate
Natural gas prices are more volatile than most people expect. Three supply-side factors drive most of the movement: how much gas is being produced domestically, how much is sitting in underground storage, and how much is being exported. The growth of liquefied natural gas (LNG) exports has become a significant factor in recent years, pulling more domestic supply toward international markets and putting upward pressure on prices.
Winter is the most vulnerable season. When a cold snap hits, demand spikes across residential, commercial, and power generation sectors simultaneously. Because infrastructure has physical limits on how much gas it can move, and because most homes can’t quickly switch to a different fuel, short-term shortages can cause sharp price spikes. Storage levels heading into winter are one of the best predictors of how volatile prices will be during heating season.
Looking ahead, the EIA’s Short-Term Energy Outlook projects the Henry Hub spot price (the benchmark for U.S. natural gas) at $3.76 per million BTUs in 2026 and $3.85 in 2027. For context, the 2024 average was $2.19, and 2025 is projected at $3.53. Prices are rising from historically low levels but remain moderate by historical standards. Earlier forecasts had projected prices above $4.30 for 2026, so current projections actually represent a downward revision of about 13%.
The Cost of Getting Connected
If your home doesn’t already have gas service, the upfront cost of connecting adds a significant layer to the affordability question. Installing a single gas line run costs roughly $860 to $1,060 as of early 2026. Most homes converting from all-electric need multiple runs (furnace, water heater, stove, dryer), plus the cost of new gas appliances themselves and potentially a utility connection fee. A full conversion can easily run several thousand dollars.
For homeowners already connected to gas, the economics clearly favor continuing to use it for heating, water heating, and cooking. For those weighing a new connection, the payback period depends on local gas and electricity rates. In a state like Utah or Montana, the savings over electric resistance heating can recoup installation costs within a few years. In a state where gas is expensive and electricity is cheap, it may never pay off, especially if a heat pump is an option.
The Bottom Line on Affordability
For most Americans with existing gas infrastructure, natural gas remains one of the cheapest ways to heat a home, heat water, and cook. It costs a fraction of what electric resistance heating costs and is competitive with or slightly cheaper than modern heat pumps in most regions. Where it gets complicated is in states with high delivery costs, homes without existing gas lines, and situations where high-efficiency heat pumps are a viable alternative. The wholesale price of gas is projected to stay moderate through at least 2027, but your actual bill is shaped far more by local utility rates, delivery fees, and how much gas you use than by commodity markets alone.