Minnesota families will pay a lot more to stay warm this winter
The cost of everything is going through the roof, and the cost of staying warm this winter is no exception. The U.S. Energy Information Administration estimates that families in the Upper Midwest will be hardest hit by increasing natural gas and propane prices.
According to EIA’s Winter Fuels Outlook, natural gas prices for home heating will increase by nearly 45 percent, from about $8 per thousand cubic feet last year to nearly $12 this winter. This means huge increases in home heating costs for the 66 percent of Minnesotans who stay warm in winter thanks to their natural gas furnaces.
Rising natural gas prices will mean higher home heating bills every month. EIA data show the average household in the Midwest spent around $550 on natural gas for home heating last winter, but they will pay more than $800 this winter. Minnesotans will see even higher price increases because we use more natural gas than the warmer states in our region.
Natural gas prices are increasing due to a wide variety of factors. The government-imposed COVID-19 shutdowns cratered the demand for the oil used in airplanes and cars. This impacted the supply of natural gas because a significant portion of our natural gas is produced as “associated gas” as part of the process of drilling oil. As oil production declined in 2020, so did natural gas production.
Another reason natural gas prices are higher is that storage is lower than average. This is due to a multitude of reasons, including a cold winter that sapped supply, and an increasing reliance upon natural gas for electricity generation. Lastly, exports of natural gas have diverted supplies to Europe and Asia, which pay much more for natural gas than we do domestically.
These factors have been compounded by the Biden Administration’s bad policies that seek to restrict domestic oil and natural gas production. These punitive policies have sent a chilling effect through the industry and undermined investor confidence in American energy production.
President Obama claimed we could not drill our way to lower gas prices, but we did. America is in a much better place thanks to the Trump administration’s emphasis on energy dominance.