Energy Costs Skyrocket
Most Americans have seen energy costs skyrocket this fall/winter. Homeowners in the United States might be in for a costly winter. Oil and natural gas prices continue to climb higher as supply struggles to keep up with demand. Prices continued to increase as the temperatures dropped across the country.
The price of natural gas used to heat homes across the country and produce electricity grew by about 180% over the past year. The oil price has also significantly risen, with the cost of crude more than doubling since this time last year. It is nearly $100 per barrel, a milestone only seen once or twice before (immediately before market crashes). As noted in our posts on inflation and inflation impacts, this price surge will keep inflation climbing. January inflation will likely again come in higher than government “expectations.”
The Bureau of Labor Statistics reports that Energy Costs rose 20% from a year ago. In addition, the trend continues to worsen. For the last six months, the increase in energy costs exceeded 35% on an annualized basis. Can you afford energy bills up 30% this winter. (If you have electric heat, you won’t see this increase).
Nearly half of all American households face financial hardship, with seven in ten low-income households reporting that they are struggling to get by. To top it all off, weather experts predict that this winter will be one of the coldest on record. Any those playing politics such as Robert Reich don’t give a *&%! about you or the costs you incur.
Green New Deal
Many advocate a green new deal – moving to 100% no-fossil fuels over the next 20-30 years. Almost all studies to date show this to be impossible to achieve without substantial nuclear investment. And with the shutdown of nuclear plants (California and elsewhere) one of the sources of significantly clean energy has diminished, going the opposite way of the green new deal advocates.
Joe Biden embraced the “Green New Deal” as a central component of his policy platform. He deems it an essential part of his plan to “save” the world from climate change. He said he would be willing to “sacrifice” hundreds of thousands of blue-collar jobs to carry out the “clean energy revolution” this required. A few example include the Keystone XL pipeline effectively killed regardless of international treaties and the Dakota pipeline also killed.
Germany moved to mothball nuclear power plants and has seen electricity prices nearly triple. No amount of solar and wind can make up the difference in loss of electricity output. England is facing a mass shortage of energy for the winter. Both these countries look to bring back coal. In fact, coal demand has soared while advocates of the green new deal pitch low energy producing alternatives or alternatives which require strip mining mass areas for rare earth minerals. China and India have built coal plants in massive numbers to supply cheap energy. This will offset any global advances. In fact, studies reinforce the fact that if the US went to zero emissions tomorrow, the effect on world greenhouse gasses would be negligible.
Whether one is committed 100% to “renewable” energy or is skeptical of the push in that direction, one can count on massive increases in cost to consumers. Experts predict at least a 100% increase in prices for electricity with other projections running much higher.
Sample Price Increases
Heat your home with natural gas? It’s up more than 169% since the beginning of the year. Heat your home with electricity? Prices are up 10% year to date on the west coast so far. In Texas, costs look to increase 20-40% this winter. The balance of the country has yet to see major increases. However, inputs to power producers may change that. Coal still fires many power generators and it’s up 300% this year so far. How about power producers using oil or homeowners using heating oil? Heating oil’s has only risen 43% so far this year. Crude oil has doubled and gasoline has posted an 84% rise.
Ignoring Science
One problem stems from the lack of any true discussion of science. That goes for climate change as well as other areas. Various sides only listen to themselves in an echo chamber. The science is absolute that the sun and clouds play the largest role in temperature variation. There can be no dispute about that. Modeling those effects has confounded science to date. No accurate back-testing and reproduction of actual measurements has yet been accomplished. However, mathematical models have become gospel. And all those models are funded by governmental agencies which rely on a specific outcome for more appropriations and hence more models. Follow the money.
Programmers can and do write the logic, algorithms, modeling assumptions, inputs and variables to spit out date following previously set goals and results. Mainly, the money cascades to those who have most outrageous results or conform to the party line. Produce more support for those funding studies and more studies supporting the funders naturally follows. A circular loop to reinforce a previously determined goal and collect grants, publicity, and notoriety.
Trade-offs
Science shows that carbon neutrality requires massive trade-offs. What trade-offs?
- No planes, trains or automobiles.
- Quit heating and cooling your house.
- Those solar panels, energy storage and electronics take a lot of energy and strip mining to make.
- Same for wind turbines.
- Quit trading up to a new phone.
- Cut down on streaming services-servers for google and others use up the electricity equivalent to some countries.
- Quit buying stuff in general. All that stuff gets produced in high carbon, high emission countries.
- While expensive to set up, geothermal may provide the best self sustaining point source for small installations such as homes, outperforming wind and solar completely.
No easy answer exists. However, we have seen energy costs skyrocket short term. Count on at least a 100% increase in energy costs in certain areas of the country this winter. It will likely subside to some extent in the short term thereafter. but current government policy aims for a long term increase beyond 100%. The current administration policy requires energy prices to double or triple over the next 5-10 years. So, energy costs skyrocket long term also unless a change in policy materializes.
Put that in your housing budget. Buy a copy and read Winning Mortgage, Winning Home to better cost proof you home purchase and financing for the long term.