Craig Schwartz's heating bill tells the story of a natural gas industry upheaval that's rippling through North Carolina.

First, take a look at Schwartz's natural gas bill for December: $73.69. Then look at December 2010, just a year before. The Raleigh computer scientist paid nearly twice as much: $134.14.

Now spread those numbers out over several months, and quite likely years.

"That's huge," Schwartz said. "I'll take $200 to $300 bucks a year in natural gas savings, no problem."

It's a familiar scenario for the 35 percent of state households that heat and cook with natural gas. Natural gas prices have been in a freefall as electricity prices are pushing upward, prompting some residents to make retrofits so they can switch to natural gas to heat their homes this winter. The state's two biggest natural gas utilities - Piedmont Natural Gas and PSNC Energy - are both planning rate cuts next month in response to the falling global price of natural gas.

Historically low natural gas prices, resulting from a glut in global reserves, have caused home heating bills to plummet to levels not seen in a decade. Experts anticipate the prices dropping further before they self-correct, with expectations that a long-term surplus could keep prices cheap for years.

But the fallout from the nation's natural gas boom extends far beyond local pocketbooks. Natural gas is already reshaping North Carolina's energy landscape in ways that could last for decades.

The dirt-cheap fuel will likely delay planned nuclear plant construction and could put off fracking in this state as industries and utilities are queuing up to convert their plants from burning coal, oil and propane.

"Natural gas is a foundational fuel for the economy," said Thomas Skains, CEO of Charlotte-based Piedmont Natural Gas, at a recent business conference in Raleigh. "It's plentiful. It's here. And it's cheap."

This week, natural gas prices landed at just above $2 per million British thermal units, from a high of more than $14 six years ago. The most recent price decline began with the recession, which drove down all energy prices. Unlike gasoline and oil, however, natural gas just kept falling.

The chief catalyst has been the energy industry's practice of combining horizontal drilling and hydraulic fracturing (or fracking) technologies to tap into vast reserves of natural gas trapped in the nation's shale rock formations. The technologies opened up enormous formations that had been deemed uneconomical to drill.

More fracking

Fracking now accounts for nearly a third of the nation's natural gas supply and is expected to increase. Fracking is largely behind the growing surplus that is further fed by a sluggish economy, which reduces energy demand, and an unusually warm winter, which reduces demand for heating fuel. In Raleigh, for example, December was 5 degrees above normal temperatures and January so far is nearly 4 degrees above normal.

Energy companies have slowed down drilling operations until natural gas reserves drop, and it's not expected they would begin new operations in unexplored areas, such as North Carolina. This state is believed to have a 40-year-supply of natural gas in deep shale formations around Lee, Chatham and Moore counties, but state law prohibits sideways drilling and hydraulic fracturing of underground rock.

The Republican state Legislature - despite environmental concerns by some groups - has been pushing to legalize fracking here. But even if lawmakers succeed, it would likely not set off an overnight drilling bonanza, as is hoped by advocates eager to drill for domestic fossil fuels to offset dirty coal and imported oil.

"At these prices, the North Carolina (shale gas) play is almost not doable," said Steve Heron, South Region exploration manger for the Cabot Oil & Gas Corp. in Texas.

The long-term fallout likely means that natural gas will become increasingly important for households and for industry. Last year, for example, 28 large customers of Piedmont Natural Gas converted from oil or propane to natural gas, some spending millions of dollars for the upgrades, said Bill Williams, Piedmont's vice president of sales and delivery services.

Marketing conversions

Piedmont, with 700,000 retail customers in North Carolina, also delivers natural gas to large industrial users and has been aggressively marketing natural gas conversions to industrial users, Williams said.

The natural gas appetite of these hospitals, prisons, manufacturers and other heavy industries is equivalent to a 300-home subdivision, in some cases many times larger. They use natural gas to boil water, generate steam and for other industrial operations.

"It just changes the equation from an economic point of view," said Edward Finley Jr., chairman of the N.C. Utilities Commission. "If it continues, it will push the potential for nuclear (plant construction) further into the future."

The U.S. Energy Information Administration estimates that natural gas home heating costs will drop by $52 this winter in the South compared to last winter.

Kay Hill converted his woodworking shop and home in Wake Forest to natural gas from propane just this month. He did the home conversion himself with a $10 kit and paid several hundred dollars for the work in his shop.

Before the conversion, he had ordered his last tank of propane for $600 - about three times the cost of natural gas. The conversion has emboldened Hill to turn up his workshop thermostat from 60 degrees to 65.

"It'll cut my heating bill by at least a half," Hill said. "I feel it's going to make me money."

Murawski: 919-829-8932