Consumers could be forced to shell out over $14 billion more in electricity and heating costs this winter compared to a year ago, according to a new report from the Consumer Energy Alliance (CEA).
It comes at a trying time for the country as consumers grapple with painfully high inflation, which just accelerated in September, jumping 8.2% from a year ago. That marked the fastest pace in four decades.
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The increase in heating costs this winter will only increase the pressure on households, according to CEA. To bolster its point, the advocacy group cited recent data from the Energy Information Administration (EIA) projecting how energy prices will rise across the board.
“Forecasting months-long weather and energy trends is not an exact science, but it is highly likely that global dynamics affecting energy commodities will lead to higher U.S. heating prices this winter,” EIA Administrator Joe DeCarolis said in a recent statement.
Households that rely on natural gas as their primary heating source are projected to spend about $930 this winter, due to higher expected prices and consumption, which is a 28% increase from last year, according to the EIA.
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Meanwhile, consumers are projected to spend $2,354 on heating oil, up 27% from 2021, according to the EIA. Additionally, electricity is projected to increase by 10% this winter, costing consumers approximately $1,359. The EIA also estimated that consumers will spend $1,668 on propane, a 5% increase from last year.
Companies such as Consolidated Edison Inc., which supplies energy to roughly 10 million people living in New York City and Westchester County, have already begun “encouraging customers to take action now that can help them manage costs this winter as market rates of electricity and natural gas are expected to be significantly higher.”
The CEA said “bad policy decisions” by the administration were driving the price increases, although other experts, including the EIA, argued that there are a number of global factors affecting energy commodity prices.
“By imposing a moratorium on oil and gas development on federal lands, canceling future federal lease sales, blocking pipelines and limiting energy infrastructure development, the strategic advantage the United States enjoyed after becoming the world’s largest oil and natural gas producer two years ago has 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 only deserves some blame because of “their anti-supply policies like canceling lease sales and [the] Keystone XL Pipeline and imposes new regulations that limit investment.”
He noted that if the administration had not canceled the permit for the northern half of the Keystone XL pipeline, it could have been operating and “accounted for about half of OPEC+’s recently announced production cuts.”
Still, Loris said it’s “disingenuous” to place the blame solely on the Biden administration 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 from: supply chain issues and labor shortages.”
“You also can’t ignore Putin’s war in Ukraine,” Loris said.
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Indeed, the EIA told FOX Business that Russia’s actions “created significant market uncertainty as much of Europe has reduced energy imports from Russia.”
In addition, the EIA also noted that the EU’s upcoming ban on imports of crude oil from Russia in December and petroleum products in February is also having an impact.
OPEC+’s announced production cuts also raised “the potential for global oil production to be lower than our forecast, which could drive up the prices of crude oil and other energy commodities,” the EIA added.
Apart from this, the agency said global natural gas and coal supplies “remain relatively low, contributing to higher-than-average prices for these commodities and for electricity.”