Consumers could be forced to collectively pay more than $14 billion more in electricity and heating costs this winter than they did a year ago, according to a new report from the Consumer Energy Alliance (CEA).
It comes at a difficult time for the country as consumers grapple with painfully high inflation, which just accelerated in September, jumping 8.2% from a year ago. This marked its fastest pace in four decades.
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Rising heating costs this winter will only exacerbate the pressure on households, according to the CEA. To back up its point, the advocacy group cited recent data from the Energy Information Administration (EIA) estimating how energy prices will rise across the board.
“Predicting weather and energy trends over several months is not an exact science, but it is highly likely that global dynamics affecting energy commodities will drive US heating prices higher this winter,” the administrator said. EIA, Joe DeCarolis, in a recent statement.
Households that rely on natural gas as their primary heating source are expected to spend about $930 this winter, due to expected price and consumption increases, a 28% increase from last year, according to the EIA.
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Meanwhile, consumers are estimated to spend $2,354 on fuel oil, up 27% from 2021, according to the EIA. In addition, it is estimated that electricity will increase by 10% this winter, which will cost consumers approximately $1,359. The EIA also estimated that consumers will spend $1,668 on propane, a 5% increase over last year.
Companies such as Consolidated Edison Inc., which provides power to about 10 million people living in New York and Westchester County, have already begun “urging customers to take action now that can help them manage costs this winter, as market prices for electricity and natural gas are expected to be significantly higher.”
The CEA said the administration’s “poor policy decisions” were behind the price increases, although other experts, including the EIA, have argued there are a number of global factors. affecting the prices of energy raw materials.
“By placing a moratorium on oil and gas development on federal lands, canceling future sales of federal leases, blocking pipelines and restricting energy infrastructure development, the strategic advantage the United States enjoyed after Becoming the world’s largest producer of oil and natural gas two years ago has all but faded,” the CEA said.
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Nick Loris, vice president of public policy for C3 Solutions, told FOX Business that the Biden administration deserves nothing but blame for “its anti-procurement policies such as canceling lease sales and [the] Keystone XL Pipeline and imposing new regulations that restrict investment.”
He noted that if the administration had not revoked the license for the northern half of the Keystone XL pipeline, it could have been in service and “made up about half of the production cuts recently announced by OPEC+.”
Still, Loris said it’s “dishonest” to blame the Biden administration alone because “it paints an incomplete picture.”
“The reality is that there are many reasons why prices are where they are,” he said, adding that the industry “suffers from some of the same problems that other industries suffer: problems supply chain and labor shortages”.
“You can’t ignore Putin’s war in Ukraine either,” Loris said.
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In fact, the EIA told FOX Business that Russia’s actions “have created significant market uncertainty as much of Europe has reduced energy imports from Russia.”
In addition, the EIA also noted that the European Union’s upcoming bans on imports of crude oil from Russia in December and petroleum products in February are also having an impact.
The production cuts announced by OPEC+ also increased “the potential for global oil production to be lower than our forecast, which could push up prices for crude oil and other energy commodities,” added the report. EIA.
Apart from that, the agency said global supplies of natural gas and coal “remain relatively low, contributing to above-average prices for these commodities and for electricity.”