Higher Energy Prices and You
As reported by the New York Times’ Clifford Krauss, “Natural gas prices spiked by nearly 10 percent on Friday to levels not seen since 2010 as another wave of freezing weather brought surges of heating and electricity demand.” Natural gas now tops $5, the highest it has been in three and a half years, which CNBC reports “… has led to concerns about whether there will be ample U.S. supplies to last through this winter.” On January 23, the natural gas spot price – which depends on demand, the impact of extreme weather, and the availability of other sources of energy – for parts of the Mid-Atlantic was $91 per thousand cubic feet (Mcf), and it was $85/Mcf further north.
The Associated Press reports that “… it's so cold that drillers are struggling to produce enough to keep up with the high demand. So much natural gas is coming out of storage that the Energy Department says supplies have fallen 20 percent below a year ago — and that was before this latest cold spell.” Forbes contributor James Conca noted that the cold “affected electricity generation systems, particularly natural gas, in the Mid-Atlantic and the Northeast such that supply weakened and prices skyrocketed,” and said that the regional grid administrator had previously told governors in this region that its increased reliance on natural gas “has made the energy market in New England fragile.”
When I and others from rural areas talk about the devastating impact of the Administration’s energy policies on communities like those in the Ninth District, Congressman Henry Waxman (D-CA), the principal author of cap and trade, and others in Washington push back and argue that there is no war on coal. Instead, they argue, market forces are to blame for coal’s decline. Congressman Waxman’s written opening statement for an October 2013 hearing says, “The primary threat to coal plants is not EPA’s mythical war on coal; it is cheap natural gas that’s being used as a subsidy. It’s more affordable, as is renewable energy, and it has reduced coal’s market share for electricity generation. This isn’t something the government did. This is something that the market dictated.”
However, when natural gas reaches $4, coal and natural gas are roughly equivalent in cost for energy generated. If it is truly “something that the market dictated,” as Congressman Waxman insists, higher natural gas prices ought to be leading to an increased demand for affordable coal. But those I have spoken to in the coal industry do not expect such a boom.
If this Administration and its allies in Congress insist on shifting from coal to natural gas for a large portion of our electric production, it is going to be expensive. As Mr. Conca noted in Forbes, “…if the United States is to become a Natural Gas Nation, we will require a lot more infrastructure and pipelines than anyone has been talking about, especially if we are to prevent the price spikes and supply shortages we’ve been seeing lately.”
While those in the Northeast and New England may not like coal, the infrastructure necessary for coal-generated power is more than 100 years old. With railcars, coal stockpiles, and coal yards, you can have reliable, affordable, efficient heat and electricity instead of a fragile system with prices that spike to nearly $100/Mcf.
With the recent cold fronts, the consequences of not fully using our energy potential are being deeply felt by people in the Ninth District and across the country. And as household energy costs increase, high prices also are burdening American businesses and their ability to create jobs.
We simply must work together to get Washington out of the way, make use of plentiful energy resources like natural gas and coal, secure our energy future, and unleash our energy potential.
A Small Victory for Religious Freedom
On Friday, January 24, the Supreme Court temporarily exempted a group of Catholic nuns from the health care law’s contraception mandate that requires most employers to offer free coverage of contraceptives as part of their health insurance plans. These nuns, who object to the contraception mandate on religious grounds, are now able to sidestep it as this matter works its way through the courts.
Temporarily exempting the nuns from the employer mandate is not necessarily a ruling on the merits of the cases pending before the courts, but I am glad that the nuns are being given this reprieve as we wait for a ruling. Stay tuned.
As always, if you have concerns or comments or wish to inquire about legislative issues, feel free to contact my offices. You can call my Abingdon office at 276-525-1405 or my Christiansburg office at 540-381-5671. To reach my office via email, please visit my website at www.morgangriffith.house.gov.
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