Biden and Your Utility Bills: Could Prices Go Up If He Doesn’t Step In?
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Josephine Nesbit
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The Biden administration recently paused approvals for proposed liquefied natural gas shipments. Current LNG exports will continue, but a new Energy Innovation analysis shows the LNG export terminal pause could protect U.S. consumers from massive natural gas costs — up to 14% higher in extra costs per year, Forbes reported.
According to the analysis, approving pending LNG export terminals would increase expenditures on natural gas by U.S. households, businesses and industry by up to $18 billion per year. The largest burden would fall on low-income households.
Forbes noted that every new LNG export terminal built means more gas sent overseas by oil and gas companies seeking the highest bidder, regardless of what it costs U.S. consumers. Plus, when oil and gas companies increase LNG exports to foreign markets where prices are higher, they reduce the available supply in domestic markets.
This could worsen price volatility at the expense of consumers in three ways, Forbes pointed out. Not only will electricity prices increase because of natural gas-fired power plants, but 60% of Americans still use gas to heat their homes, and any price increases from exports will have a direct effect. According to Forbes, low-income households spend more than 8% of their total income on energy bills, three times higher than the rest of the U.S. population.
The third possible outcome is that manufacturing costs and economic competitiveness will be affected by increased gas prices. Manufacturing groups and consumer advocates warn that America’s relationships with global markets could make price instability more likely, the Wall Street Journal reported. Over the next decade, additional projects could increase heat and power bills, including costs to make everything from drywall to steel.
But this isn’t necessarily new. Forbes noted that in 2022, winter gas prices increased by an average of 27%. This forced a third of U.S. consumers to sacrifice essentials like food or medicine to pay their energy bills. Forbes added that the majority of voters support limiting LNG exports by a 2-to-1 margin, and 60% of likely voters support this sort of pause and re-evaluation.
At a Senate hearing, Deputy Energy Secretary David Turk said the Biden administration aims to keep the country’s gas prices low.
“That is a huge economic advantage,” he said, as reported by WSJ. “Do we want to give that up as a country? Again, we need to analyze that.”
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