The U.S. Is in for a Cold and Expensive Winter Thanks to Green Energy Policies

October 7, 2021

The Natural Gas Supply Association said in a presentation yesterday that winter will be 1% colder than last year and the U.S. will end up with 1.7 trillion cubic feet of gas in underground storage by the end of March, 6.3% below the five-year average. 

The Wall Street Journal reports:

The forecast comes with U.S. benchmark natural gas already trading at $5.64 per million British thermal units, 83% above last winter’s average price. In Europe and Asia, which are vying for liquefied-natural-gas cargoes from the U.S. and elsewhere, prices are six to seven times higher.

Weather aside, there are some assumptions within the forecast that could turn out to be too sanguine. Energy Ventures Analysis, the consultancy that prepared the report for the association, projects that dry-gas production will increase by 3.7% this winter compared with the last one, driven by higher prices. Yet there haven’t been robust signs that suppliers are responding. Although natural-gas prices have almost doubled since May, the number of active U.S. dry-gas rigs has largely been stagnant over that time, according to data from Baker Hughes.

Even if producers start drilling more vigorously in the coming weeks, it would be too late to help early winter demand. It takes three to six months for new wells to start producing. Drilled but uncompleted wells can start producing more quickly, but Richard Redash, head of global gas planning at S&P Global Platts, notes that there is a limited supply that can be called on in short order.

This administration has made drilling and producing oil and natural gas near impossible. Now the U.S. is poorly positioned to face this winter’s energy demand. While these astronomical energy prices for American households are definite, now we might also be facing energy shortages.

As PTF noted earlier this week, dramatic increases in natural gas prices would normally lead energy companies switching to fuel oil, but in countries like Europe fuel switching has been banned due to their irrational and hasty ‘energy transition.’ Europe’s forced replacement of reliable, high-density energy sources like fossil fuels with low-density energy sources like wind and solar has caused their natural gas prices to more than quadruple this year and is unlikely to relent soon.

As we watch Europe face this large energy crisis due to ill-informed green energy policies, it is dumbfounding this administration continues to push similar Green New Deal policies. Already in the U.S. we are seeing an 83% increase from last winter’s average natural gas price. Yet, the Biden administration wants to go even bigger on climate, including in their budget reconciliation bill. American households shouldn’t have to bear the brunt of the liberal eco-elites’ poor energy policy decisions.