EIA expects U.S. households to spend more on energy this winter

The U.S. Energy Information Administration (EIA) today forecasted U.S. households will spend more money on energy this winter than last year, especially those that heat with propane or heating oil.

EIA explains:

Forecast expenditures are based on our expectations of high retail energy prices—many are already at multiyear highs—and of slightly more energy consumption per household than in the previous winter. Notably, many energy prices reached multiyear lows last year as a result of the COVID-19 pandemic.

Retail energy prices for several fuels are already at their highest point in several years. Although price increases over the past year can be attributed to several factors, the main reason wholesale prices of natural gas, crude oil, and petroleum products have risen is that fuel demand has increased from recent lows faster than supply, in part, because of economic recovery after the first year of the COVID-19 pandemic. To varying degrees, these increases in wholesale prices are being passed through to consumers.

With energy prices on the rise, it is critical that policymakers keep this in mind and promote commonsense, pro-consumer policy and regulation when it comes to American energy. That starts with advocating for policies that welcome development of North American natural resources as well as investment in energy infrastructure.

Unfortunately, many are working against American energy security + affordability. For example, Michigan Gov. Gretchen Whitmer has put politics and ideology before her constituents’ energy needs – calling for the shutdown of Line 5 – which supplies 65% of propane demand in the Upper Peninsula, and 55% of Michigan’s statewide propane needs – with no feasible replacement.

As the economy continues to recover from the COVID-19 pandemic, now is not the time to create new policies and hurdles that lead to increased energy costs for American families.

OPEC Opts Against Big Output Boost, Pushing Oil Prices to Seven-Year High

This week, the Wall Street Journal featured a piece by Benoit Falcon and Summer Said outlining OPEC’s decision to not increase production at the levels world leaders like President Biden have been begging for. This strategic move by foreign competitors coupled with the Biden administration’s anti-American energy policies have pushed U.S. crude prices to their highest levels since 2014. 

Our domestic oil drilling levels and output have not yet returned to pre-pandemic levels as we hoped they would. With the Organization of the Petroleum Exporting Countries and Russia only agreeing to lift their collective output by 400,000 barrels a day (less than what DAPL transports in a day), the United States has been backed into the uncomfortable corner of energy dependence. 

As written in the WSJ article, “The last time that domestic crude prices were so high, there were roughly 1,100 more rigs drilling for oil than the mere 428 at work last week, according to oil-field-services firm Baker Hughes Inc.” This year, average daily crude production has been 6.7% lower than the previous year, as well as having decreased commercial stockpiles of crude to back us. 

The control of pricing is very much in the hands of OPEC. On a tangible level that hurts the pocketbook of everyday Americans, the U.S. is starting to feel the repercussions of our lost energy independence. To ever get our feet back under us, domestic energy infrastructure like pipelines must be supported, the White House must side with American energy producers over foreign ones, and the most reliable, affordable sources of energy (petroleum and natural gas) can’t be discriminated against by harmful policies.

Despite Promise of Carbon Capture Projects, Activists Oppose Critical Investment

Last week, Politico featured a piece discussing the backlash Democratic leadership is facing regarding the massive buildout of carbon capture, utilization and sequestration infrastructure wrapped in the proposed infrastructure bill. 

$2 billion in the bipartisan infrastructure bill has been earmarked to develop new infrastructure to capture and carry carbon dioxide from industrial emitters to underground storage sites – removing emissions before they reach the atmosphere and contribute to climate change.

But the reason far left environmentalists are against this climate solution? Because the term “pipeline” is involved. One carbon-capturing powerhouse pipeline is planned to stretch nearly 710 miles across Iowa, capturing carbon dioxide from ethanol, fertilizer, and other critical industrial and agricultural plants.

The project is meant to help Iowa farmers, who sell half of the state’s corn crop each year to ethanol producers. A new Des Moines Register/Mediacom Iowa Poll, conducted Sept. 12-15, found that 85% of Iowans view ethanol as important to the state’s economy. It would be the world’s largest carbon sequestration pipeline, the company says, with the capacity to capture up to 12 million metric tons of carbon annually. That equals taking up to 2.6 million vehicles off the road each year.

What anti-pipeliners are refusing to recognize is that this project would help ethanol and other energy-intensive ag industries remain viable and support the economy as our nation seeks to cut greenhouse emissions in half by 2030 and reach our long-term environmental goals.

Per usual, these loud environmentalists in the minority are causing a ruckus without rhyme or reason, solely based on their misconstrued, partial version of the truth. Proposed carbon capture pipelines will not only work against the rising carbon emission rates in America, but will build out the necessary infrastructure for future, climate-friendly use.

Biden’s Energy Policies Hurt My Family 

Today, RealClear Energy featured a piece by pipeliner Suzanne Walker of Reagan, Tennessee. Ms. Walker tells her story of her career in pipeline welding and its unfortunate demise under the Biden administration. 

Walker started working on pipelines in 2008 after realizing that her strengths played well into the industry. For the past 13 years, she has worked on projects all across the nation from Pennsylvania to Louisiana and Michigan to Texas. But within his first month in office, President Biden decided to favor foreign pipelines over critical infrastructure projects like the Keystone XL pipeline here at home. Walker was instantly out of a job, with seemingly no hope as Biden continued to discriminate against American energy. 

The timing of Biden’s poor energy policies were less than ideal for Walker, being that she was pregnant with her first child when she was laid off. Trying to provide, Suzanne was left high and dry by Biden’s short-sighted decision to work against American jobs and reliable, affordable homegrown energy. Walker writes, “This past year and a half was supposed to be the most joyful year of my life— not the most stressful. However, President Biden seemed to have other plans for pipeliners like myself.”

Suzanne writes this key passage: 

“During his campaign, Joe Biden promised to be an advocate for middle class families. However, he has instead killed thousands of family-sustaining pipeline jobs. I will most likely have to settle for an entry-level job with entry-level pay here in Tennessee now that there seems to be no realistic options. John Kerry’s empty promise of employing us in solar panel jobs has so far not come to fruition. The Biden administration is putting people like myself out of jobs that are needed now more than ever as we try to recover post-pandemic.” 

PennEast Pipeline Becomes Latest Victim of Never-Ending Regulatory Hurdles

Developers of the proposed PennEast pipeline this week announced they were pulling the plug on the $1.2 billion project, which would’ve carried natural gas from Pennsylvania to New Jersey, after years of legal and regulatory challenges.

According to Reuters, the company said PennEast was canceled because it had not yet received all of its required permits, including a water quality certification in New Jersey. It was one of the last major pipeline projects in the works set to pull gas from the Marcellus/Utica formation, the biggest U.S. gas shale basin.

This week’s unfortunate announcement comes despite the project’s Supreme Court win earlier this year, in which it was determined that the company could seize state-owned or controlled land in New Jersey for the project.

While environmental activists and even some elected officials, including Acting New Jersey Attorney General Andrew Bruck, celebrated the project’s demise, its cancellation will leave less gas available for consumers in need and could lead to higher energy costs.

“The legal and regulatory roadblocks that led to the cancellation of the PennEast Pipeline – which would have been built with union labor – are putting energy affordability and reliability at risk in America,” the Interstate Natural Gas Association of America said in a statement.

Modern energy infrastructure like PennEast are the safest, most efficient, and most environmentally-conscious methods of transporting the natural gas and petroleum products that fuel the U.S. economy. As such, policymakers must create a regulatory environment that is conducive to critical infrastructure investment and energy development.

Former US EIA Administrator: Municipal Natural Gas Bans Will Hurt Consumers, Lead to Higher Energy Costs

Bloomberg Law recently featured a piece by Guy Caruso, former Administrator of the U.S. Energy Information Administration, discussing the negative impacts of municipal natural gas bans, noting that it could cost up to $96 billion to convert natural gas homes to electricity.

Environmentalists are revving up the pressure on President Biden to induce zero-net emissions and 100% renewable energy sources in light of the U.N.’s Intergovernmental Panel on Climate Change report that was released recently. Yet, as Caruso points out, their reckless race towards renewables comes with an incredibly high price tag that simultaneously ignores the realities of current energy demands.

Natural gas consumption is predicted to rise in 2021 due to the millions of Americans that rely on it for cooking, laundry, and heating their homes. Not only is natural gas reliable, it is also affordable in a time when Americans are trying to recover from one of the toughest economic years in American history. In short, households that use natural gas for cooking and heating save an average of $847 annually in comparison with households that use electricity. Moreover, businesses everywhere depend on the benefits that natural gas provides; Caruso writes over 5.4 million commercial customers rely on the gas switch to keep their companies running.

However, because of the glossy appearance of renewables, vocal environmentalists want to take our country in a direction that is simply not feasible nor affordable at this time. Caruso writes, “Unable to stop every pipeline project, they have targeted natural gas in a creative way—pushing for cities and states to prohibit natural gas hookups in new construction homes and buildings.”

State measures that ban or discourage the use of natural gas are becoming all too common. However, what these shortsighted local legislators aren’t looking at is the numbers:

“On average, the upgrades would cost around $2,000 per home, although the cost could go as high as $5,000 in some cases. When considering all 48 million homes that currently rely on natural gas in some capacity, the price tag for conversion would total $96 billion.”

Unbeknownst to most, natural gas actually has a critical role in helping achieve net-zero emissions by 2050, lowering carbon emissions as the U.S. power sector transitions from coal to natural gas-fired generation.

Caruso points to a recent Princeton University report that revealed that in order to achieve net-zero emissions, “the U.S. would need to set a lightning pace, investing a minimum of $2.5 trillion into clean energy over the next decade, putting 50 million electric cars on the highways and growing wind and solar generating capacity fourfold, among other initiatives. That’s a tall order for a nation trying to recover economically from the Covid-19 pandemic.”

The fact of the matter is that clean energy doesn’t have the capacity nor cost-benefit to keep up with natural gas resources at the moment. Our country is in need of heightened energy development and infrastructure investment to support the our nation’s growing energy needs.

Biden Handcuffs America’s Energy Potential

This week, The Washington Times featured a piece by GAIN strategic advisor Col. Tom Magness discussing the repercussions and future detriments of Biden’s failing energy policies and actions.

As outlined in a previous GAIN blog and op-ed by Craig Stevens in The Oilman Magazine, President Biden recently asked the Organization of the Petroleum Exporting Countries (OPEC) to boost crude oil output. This was only the beginning, as this presidential request capped off eight months of policy decisions geared towards steering the nation away from fossil fuels and towards 100% renewable energy with the goal of a net-zero emissions economy by no later than 2050.

As Magness asserts in his op-ed, “renewables should undoubtedly play a role in our energy future, albeit as part of an all-of-the-above approach such as the one then-Vice President Biden once supported, it is incredibly shortsighted to enact policies that reduce the nation’s oil and natural gas supply.” He continues, “At the same time, global demand for those products continues to increase. The economy is picking back up again, and increased economic activity always translates into increased energy demand. The Energy Information Administration (EIA) estimated that global consumption of petroleum and liquid fuels will increase by 5.3 million barrels a day this year and forecasted an increase of 3.6 million barrels a day in 2022.”

Thankfully, new technology has given America the capacity to meet both global and domestic demand by using environmentally conscious methods of transporting reliable, affordable energy resources. For example, the Dakota Access Pipeline transports effective energy at a rate that is 4.5 times safer than trains or trucks could perform. We have the right infrastructure to make our energy dreams become reality, we just have to invest in them— not stifle them.

Magness concludes with this key passage:

“The Biden administration can continue to take us on a path that handcuffs our energy potential and includes going hat-in-hand to foreign nations every so often, undermining our energy security along the way. Or they can unleash that potential by investing in our pipeline infrastructure and encouraging exploration and safe extraction of oil and natural gas, firmly establishing our energy independence and ensuring that the future economic success of our nation does not depend on the decisions of foreign entities like OPEC.”

Review sees risk of halt to new gas hookups in New York City, Long Island

This week, Politico featured a piece by Marie J. French covering the obstacles to building new gas infrastructure and what they mean for regions like New York City and Long Island.

New York state’s utility regulator directed an independent review of National Grid’s plan to close the predicted gap between gas supply and demand after National Grid halted hookups when the state blocked a pipeline to supply the region. French conveyed the reports findings: “The report found Grid’s forecast for gas demand reasonable and highlighted major risks for the company’s plans to meet it. There are major trade-offs around how much risk of emergency curtailments or moratoriums on new hookups regulators and the public are willing to tolerate versus the cost of proposed investments.”

So what does this mean? As long as the demand for natural gas remains steadily increasing as it is now, there will be a crucial need for reliable, affordable resources. While decarbonization is a priority of New York, this is not feasible in the short-term with the infrastructure and demand in play. National Grid’s spokesperson, Karen Young, said in a statement:

“An extreme event that results in turning off gas supply has the potential to create a serious public safety situation in instances of severe cold,” the report states. “Given that gas is predominantly used for heating and cooking, the ramifications of a prolonged outage on human health and safety can be substantially more dangerous than an equivalent electric outage.”

A strong energy infrastructure network is key to a resilient grid and low costs for consumers. The U.S. and individual states should foster a policy and regulatory environment that welcomes investment in infrastructure.  

Energy Prices in Europe Hit Records After Wind Stops Blowing

This week, The Wall Street Journal reported on the surge in Europe’s natural gas and electricity markets after the wind in the stormy North Sea stopped blowing.

In recent weeks, there has been a sudden decrease in wind-driven electricity production off of the U.K.’s shores due to less than ideal weather circumstances. In the wake of this downturn, gas and coal-fired electricity plants were called in to close the gap that wind’s shortfall created. Coupled with this demand, the recovering pandemic boost, and lack of stored fuel, natural gas prices hit all-time highs.

This detrimental event of energy scarcity hit hardest in the U.K. because of how heavily the nation depends on wind energy. The need for infrastructure to provide reliable, affordable energy is on full display. Infrastructure feats like underground, natural gas pipelines could have deterred this crisis from ever coming up. However, a good part of Europe, especially the U.K., now finds itself in a vulnerable, desperate position. This shortcomings of renewable energy show that our current technologies and systems do not have the capacity to abandon traditional fuels. Very soon, the United States could be in the same position as the U.K. if officials stray from commonsense policies and regulations. The abundance of natural gas and crude in North America, paired with investment in new energy infrastructure, can help fuel the economy and support American energy security and national security interests.

Dakota Access Pipeline Brings Power To The People

This week, Inside Sources featured a piece by Ben Lieberman of the Competitive Enterprise Institute, drawing attention to the true impact of largescale energy infrastructure projects the Dakota Access Pipeline. Lieberman highlights the widespread community support when a new pipeline creates much-needed job opportunities, tax revenues, and affordable energy for its residents and local economy.

Lieberman writes: “It is worth noting that the local support for energy in such places is often non-partisan, as Democrats in states like West Virginia, Louisiana, and Alaska frequently join Republicans in support of the job-creating projects that extract energy and put it into the stream of commerce.”

To provide evidence of democratic support for energy projects, Lieberman describes the most targeted of all: the Keystone XL. Remaining unknown to most, the majority of elected officials– the ones that the people in the path of the pipeline actually choose to represent them– are Keystone XL supporters.

In the same way, this communal support stands true for DAPL. Since 2017, DAPL has safely carried North Dakota oil through South Dakota, Iowa, and into the existing pipeline network and refineries in Illinois. Found in a recent nationwide poll sponsored by the GAIN Coalition, nearly 80% of Americans believe that the U.S. should not shut down existing pipelines that have been in safe operation. Moreover, 73% of Native Americans in North Dakota believe that DAPL should not be shut down. Pretty contradictory to what the activists are alleging, isn’t it?  

Becoming a stronghold of these states’ energy supply, DAPL provides an immense amount of jobs and heaping tax revenues to these states and local communities. A recent analysis in Bloomberg Law estimated that up to 7,400 jobs and $900 million dollars would vanish if DAPL did.

Strong energy infrastructure feats like DAPL reduce the need to transport oil on our rails and roads, which are less safe, less efficient, and pose a greater risk to the environment. The locals high-energy producing states and its communities are well-aware of this fact and know that modern pipelines like DAPL are the greatest method to win both environmentally and economically.