Homes heating with natural gas this winter could see their energy bills leap up 25 percent compared to last year, while those using heating oil could experience a staggering 45-percent rise in costs, the U.S. Energy Information Administration (EIA) predicted.
Electricity bills are likely to move up about 11 percent, according to the EIA, although prices in some areas are expected to soar. Massachusetts households buying electricity from National Grid should brace for a whopping 73-percent increase in their electric bills, according to an analysis by Power For Tomorrow, a consumer advocacy group.
In that case, a monthly electric bill that was $295 last year would be about $510 this winter.
Natural gas is in short supply around the world. After Russia gradually cut off its gas exports to Europe over the past year, nations on the continent began buying any available gas to liquefy and import.
U.S. producers also began selling any extra supply to Europe, where gas prices have soared while growing far less at home.
As European utilities and factories ran short of natural gas, many switched to diesel fuel—which is the same grade of oil that buildings burn for heat.
Demand has spiked for diesel but OPEC and U.S. producers have refused to boost production to meet the sudden need, as we reported in “Oil Majors Withhold Investment in New Production” (3 Aug 2021) and “Oil Majors Use Cash to Buy Back Stock, Increase Dividends” (10 May 2022).
North America’s extreme weather last winter and summer drew down gas supplies and raised prices.
China’s heat waves this year were related to blackouts, leading Beijing to cut exports of oil and related products to protect domestic supplies.
The diesel shortage also is partly a byproduct of the COVID era.
During the COVID War, demand crashed for transport fuels. As a result, some U.S. refiners shuttered older plants and have not found it economically feasible to start them up again, in part because some would require expensive equipment upgrades.
About 17 percent of homes in the U.S. Northeast heat with electricity. However, many electricity markets in the region are unregulated, meaning that electricity prices will rise on a par with those for heating oil and natural gas, although after a lag.
TREND FORECAST: Recent history shows that public interest in renewable energy grows in tandem with rising retail prices for heat and vehicle fuel.
As costs of natural gas and heating oil rise for consumers, companies working in the green power industry will capitalize on the public’s growing frustration with fossil fuels and leverage incentives in the Inflation Reduction Act to ramp up manufacturing for an increasingly eager market.
Love it or hate it, renewable energy will be the OnTrendpreneur® opportunity of the century… that is if we are all not destroyed in nuclear war which keeps ramping up.