In general, the cost of natural gas as it comes from the well makes up about one-half or more of the consumer’s gas bill. The rest consists of costs for pipeline transmission from the gas field to the local utility and for distribution by the utility, plus expenses such as metering, inspections and customer service. In many states, purchased gas costs for gas utilities are averaged over a season, and these average costs are passed on to consumers. This tends to flatten out the price spikes caused by extremely cold weather or other factors.

The principal players in the supply chain between the natural gas wells and the final consumer are:

• Gathering lines that link producing wells to central gathering points. At these points, the natural gas is processed to remove impurities such as water and sulfur that might corrode the pipeline.

• Transmission pipelines that move natural gas over long distances. There are more than 280,000 miles of such lines in the country, varying in size from 20 inches to 42 inches in diameter. Compressors, located about every 70 miles, move the natural gas along the lines.

• Local distribution companies that bring the natural gas into homes and businesses. These utilities add sour-smelling odorant to the gas for safety reasons, help maintain the complex underground lines around the community and handle billing and services to customers.