A few cold days do not make a winter. Nevertheless, the blast of Arctic air descending on the U.S. drove natural gas prices over $15/MMBtu Thursday. It also drove Energy Secretary Sam Bodman to blame Katrina and Rita and beg for more conservation. The NYMEX gas contract for January delivery closed at $14.994, up $1.29 – a 9 percent rise that continued to climb in overnight trading. As I write this, Bloomberg reports the NYMEX price at $15.46. The weather really is cold, especially in the upper Midwest. Temperatures hit the zero mark in Chicago where the average temperature on Wednesday was only 8 degrees above. Denver had a record low for the date of minus 13. The coldest weather usually occurs in late January, but heating loads this week rival those for any week in the last two years. A lot of gas is being taken out of storage to meet this demand and to fuel the market bulls who are betting on tight supplies this winter. According to my model, gas storage levels will drop 6 percent this week, compared to 2 percent last week. Secretary Bodman blames the hurricanes. However, as readers of this column know, the storms had little impact on storage levels since gas demand dropped as well as supply. Minerals Management Service reports that gas production from the Gulf remains 2.4 billion cubic feet per day lower than normal. Meanwhile, demand is picking back up as refineries come back online. But even if none of this shut-in gas returns, the loss of supply this winter would be less than 1.5 percent of annual consumption. If the Energy Secretary really wanted to frighten the market, he could have pointed out that U.S. gas production outside the Gulf of Mexico has fallen this year, while imports from Canada have remained flat. Liquefied natural gas imports are also lower this year. (Data are for 12 months ending September 30.) This has happened despite the fact that prices paid to producers increased another 17 percent over last year’s high prices. Katrina and Rita didn’t help matters, of course, but the government should fess up to the real problem – the inability of gas supplies to increase despite record high prices. Current high prices are but a symptom of the underlying problem, which isn?t hurricane damage. The U.S. is in the midst of a natural gas crisis. Neither the U.S. nor the California government wants to admit it. They still maintain that “market forces” will solve the problem. When the media reports on the poor folks freezing to death in Chicago due to “market forces,” I predict that Katrina and Rita will get all the blame, rather than the bureaucrats like Bodman who deserve it.