Nation faces costly energy crunch this winter

Americans know that inflation has hit hard. Food prices alone are up 10% this year. And energy costs are now a key problem — thanks to OPEC and Russia manipulating oil prices even as natural gas prices surge.

To put it bluntly, the news isn’t good. Americans are going to face some very costly heating and electricity bills this winter. And New England may even experience blackouts.

Let’s start with energy prices. U.S. government data shows that the cost of electricity has climbed 15.5% since last year. That’s the largest jump in 41 years. And at the same time, the price of natural gas has climbed an astonishing 33.1%.

Why are natural gas prices rising so much? Heavy demand, plus a lack of alternatives. Europe is trying to wean itself from Russian natural gas — and gobbling up exports of America’s liquefied natural gas. Unfortunately, this conflicts with America’s own power needs, since natural gas is used to produce the largest share — 38% — of U.S. electricity generation.

It’s helpful that U.S. natural gas production has hit record levels. But America’s natural gas exports are also increasing. And at the same time, on-demand sources of power such as coal and nuclear are disappearing. If anything, the U.S. needs more energy, but the nation’s coal fleet is being pushed aside faster than reliable alternatives can take its place. That’s troubling because coal plants once provided balance against electricity price spikes. But that balance is now eroding.

This is particularly problematic for New England, since the region is overly dependent on natural gas for both electricity production and home heating. Unfortunately, New England is highly averse to adding new gas pipelines — and has systematically disassembled its coal fleet years ahead of potential renewable energy additions. That has left New Englanders reliant on the same U.S. liquefied natural gas that’s also being shipped across the Atlantic to Europe.

As a result, the Federal Energy Regulatory Commission (FERC) foresees real trouble. The commission explains that America’s increasing reliance on thousands of miles of sprawling gas pipelines could pose serious “constraints” for both New England and California this winter.

FERC is also warning that the pace of U.S. coal plant closures is alarmingly mismatched with the speed of potential replacements. FERC explains that coal plants “possess higher accreditation values.” Translation: Coal plants are more reliable than weather-dependent wind turbines and solar panels.

As a result, Americans face a double-whammy. Energy prices are soaring, since overseas demand is squeezing the U.S. natural gas market. But at the same time, America’s power grid is increasingly being hitched to both natural gas and intermittent wind and solar.

Something has to give, including potential power outages this winter — or power shortfalls next summer, when demand surges past available supply.

America’s energy transition is in jeopardy, since replacement power simply isn’t coming online at the speed and scale needed to maintain affordable, reliable electricity.

America’s policymakers need to pivot. Rather than race to dismantle more coal plants, the U.S. must recognize the essential utility of its remaining coal fleet as a reliability and affordability backstop. This may be a contentious issue for some. But Washington should take stock now — and ensure a solid U.S. power grid while there’s still time.