This opinion column was submitted by Terry Jarrett, an attorney and energy consultant who has served on both the board of the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission.
Americans know that inflation has hit hard. Food prices alone have risen by 10% this year. And energy costs are now a key issue – thanks to OPEC and Russia manipulating oil prices even as natural gas prices rise.
To put it bluntly, the news is not good. Americans will face very expensive heating and electricity bills this winter. And New England can even experience blackouts.
Let’s start with energy prices. US government data shows the cost of electricity has climbed 15.5% since last year. It’s the biggest leap in 41 years. And at the same time, the price of natural gas soared 33.1%.
Why are natural gas prices rising so much? High demand, plus a lack of alternatives. Europe is trying to wean itself off Russian natural gas – and is gobbling up US liquefied natural gas exports. Unfortunately, this conflicts with America’s own energy needs, since natural gas is used to produce the largest share – 38% – of electricity generation in the United States.
It helps that US natural gas production has reached record highs. But US natural gas exports are also increasing. And at the same time, on-demand energy sources such as coal and nuclear are disappearing. On the contrary, the United States needs more energy, but the country’s coal fleet is being shelved faster than reliable alternatives can take its place. This is troubling, as coal-fired power plants once provided a balance against spikes in electricity prices. But this balance is being eroded.
This is particularly problematic for New England since the region is too dependent on natural gas for electricity generation and home heating. Unfortunately, New England is very averse to adding new gas pipelines — and has consistently taken down its coal fleet years ahead of potential renewable energy additions. This has left New Englanders dependent on the same American liquefied natural gas that is also shipped across the Atlantic to Europe.
As a result, the Federal Energy Regulatory Commission predicts real trouble. The commission says the United States’ growing reliance on thousands of miles of sprawling gas pipelines could pose serious “strains” on New England and California this winter.
FERC also warns that the pace of coal-fired plant shutdowns in the United States is alarmingly out of step with the speed of potential replacements. FERC explains that coal-fired plants “have higher accreditation values.” Translation: coal-fired power plants are more reliable than wind turbines and solar panels that depend on weather conditions.
As a result, Americans face a double whammy. Energy prices are soaring as foreign demand squeezes the US natural gas market. But at the same time, the US electric grid is increasingly coupled to both natural gas and intermittent wind and solar power.
Something has to give, including potential blackouts this winter – or power shortages next summer when demand outstrips available supply.
America’s energy transition is in jeopardy because alternative energy is simply not coming online at the speed and scale needed to keep electricity affordable and reliable.
American policymakers must pivot. Rather than rush to dismantle more coal-fired plants, the United States must recognize the essential utility of its remaining coal fleet as a reliability and affordability backstop. This can be a contentious issue for some. But Washington should take stock now – and ensure a strong US power grid while there is still time.
Terry Jarrett is an attorney and energy consultant who has served on the board of the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission.
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