Tag Archives: Natural gas prices

“Not The Weather”: What’s Behind California’s Skyrocketing Natural Gas Bills, by Jill McLaughlin

Here’s a hint: it has something to do with green energy. From Jill McLaughlin at The Epoch Times via zerohedge.com:

Californians are expecting skyrocketing natural gas bills this month, but this can’t all be blamed on the weather, according to industry insiders.

Natural gas is transferred into the SoCalGas system after being collected and purified at a Calgren collection facility in Pixley, Calif., on Oct. 2, 2019. (Mike Blake/Reuters)

Southern California Gas Company (SoCalGas), which serves about 5.9 million households and businesses, warned customers to expect “shockingly high” January bills that could be 128 percent higher compared to December.

Those who typically paid around $65 a month last winter are likely to pay about $160 this year, SoCalGas said in a statement Dec. 29. Those with bills around $130 a month could see charges jump to $315.

Last December, wholesale natural gas prices already cost five times more than that of 2021. The utility also paid unprecedented prices for the supply in January, the company reported.

Natural gas prices rose in 2022 for five reasons, according to a biennial report (pdf) published by California Gas and Electric Utilities, a group of utility providers including SoCalGas, San Diego Gas & Electric, and SoCal Edison.

First, North American inventories fell below the five-year average last year. Second, the national supply was also strained by Europe’s steady demand for American natural gas during the Ukraine conflict.

Third, the Biden administration restricted licensing and drilling in the country for fossil fuels, and investment for such production has lagged behind the rapidly growing demand for natural gas over the past year, according to the report.

Lastly, the growing electric power sectors nationwide also consume natural gas, the company reported.

“From an economic standpoint [reducing reliance on fossil fuels] may be costly and is certainly not expected to be rapid or easy,” the utility reported. “Nonetheless, the push to find ways forward and to provide energy solutions to customers in a clean and affordable way is an imperative.”

Climate Goals Restrict Production, Grow Demand

Besides the recent storms that have crimped national supplies, California’s poor storage planning and aggressive climate action goals played a part in driving the prices skyward, Mike Umbro—an oil and gas developer in Kern County, about 150 miles north of Los Angeles—told The Epoch Times.

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Britons Face “Steep Drop In Quality Of Life” As UK Gov’t Scrambles To Avert Energy Crisis With Subsidy Plan, by Tyler Durden

One thing you can count on with government. If it creates a problem, it’s solution to the problem it created will make the problem even worse. From Tyler Durden at zerohedge.com:

Finally, observers of British politics have something else to talk about besides ‘Partygate’.

In an effort to stave off an epidemic of what one CNBC host called “energy poverty”, Her Majesty’s Government has subsidize the energy costs borne by millions of British households as decades of energy policies that overemphasized reliance on imported natural gas – prices of which have soared over the last year – in favor of dirtier, but abundant, sources like coal have brought the British economy to the brink of an energy crisis.

Energy bills are expected to drastically spike in the coming months after Ofgem, Britain’s energy sector regulator, announced on Thursday that it would be raising its price cap on household energy bills by 54% starting April 1, a record-breaking increase instituted to stop power utilities from sinking into bankruptcy in the face of surging LNG prices. That’s on top of a 12% hike approved back in October.

The average household’s annual energy bill is currently between £1,277 ($1,730) and £1,370 in the UK, and the increase could saddle millions of families with enormously increased costs for heating and electricity.

As a result, HMG has decided to issue direct subsidies to the British people to prevent millions from being squeezed as a result of what have now been exposed as unwise energy policy decades in the making that has shifted Britain’s reliance on abundant coal that’s widely available within the UK to imports of the “cleaner” LNG.

Speaking before the House of Commons on Thursday, Chancellor Rishi Sunak proclaimed that “just as the government stood behind the British people through the pandemic…so we will help people deal with one of the biggest costs they now face – energy.”

To accomplish this, the government will step in to subsidize the energy bills to the tune of about £350 for nearly 30MM British households, at a cost quoted by Sunak of roughly £9 billion. That will – according to Sunak – cover roughly half of the expected ~£700 annual increase in heating and energy costs expected to be borne by the average household. More than half of British households are on adjustable-rate energy plans, which make them especially vulnerable to price hikes.

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