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Consumers may be forced to collectively shell out over $14 billion more on 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 its fastest pace in four decades.
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The rise in heating costs this winter will only exacerbate the pressure on households, according to the CEA. To bolster its point, the advocacy group cited recent data from the Energy Information Administration (EIA) estimating how energy prices will increase across the board.
The rise in heating costs this winter will only exacerbate the economic pressure on households, according to the Consumer Energy Alliance. ( Yui Mok/PA Images via Getty Images / Getty Images)
"Forecasting months-long weather and energy trends is not an exact science, but it’s highly likely that global dynamics affecting energy commodities will lead to higher U.S. prices for heat this winter," EIA Administrator Joe DeCarolis said in a recent statement.
Households that rely on natural gas as their primary heating source are estimated to spend about $930 this winter, due to higher expected prices and consumption, which is a 28% increase over last year, according to the EIA.
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Meanwhile, consumers are estimated to spend $2,354 on heating oil, up 27% from 2021, according to the EIA. Additionally, electricity is estimated to rise 10% this winter, costing consumers roughly $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 provides energy for roughly 10 million people who live in New York City and Westchester County, have already started "urging customers to take actions now that can help them manage costs this winter as market prices for electricity and natural gas are expected to be substantially higher."
Households that rely on natural gas as their primary heating source are estimated to spend about $930 this winter, due to higher expected prices and consumption, which is a 28% increase over last year, according to the Energy Information Administrati (Gado/Getty Images / Getty Images)
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 enacting a moratorium on oil and gas development on federal lands, cancelling future federal lease sales, blocking pipelines and restricting 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 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 only some blame due to "its anti-supply policies such as canceling lease sales and [the] Keystone XL Pipeline and imposing new regulations that curtail investment."
He noted that if the administration didn't cancel the permit for the northern half of the Keystone XL pipeline, it could have been in operation and "made up about half of OPEC+’s recently announced production cuts."
Still, Loris said that it is "disingenuous" to solely put the blame on the Biden administration because "it paints an incomplete picture."
Energy companies have already started “urging customers to take actions now that can help them manage costs this winter as market prices for electricity and natural gas are expected to be substantially higher.” (istock / iStock)
"The reality is there are many reasons why prices are where they are," he said, adding that the industry is "suffering from some of the same problems other industries are suffering from: supply chain problems and worker 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 "created significant market uncertainty as much of Europe has reduced energy imports from Russia."
Additionally, 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 also have an impact.
OPEC+’s announced production cuts also increased "the potential for global oil production to be lower than our forecast, which could drive up prices for crude oil and other energy commodities," the EIA added.
Aside from this, the agency said that global natural gas and coal supplies "remain relatively low, which contributes to higher-than-average prices for those commodities and for electricity."
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