Last week, American Experiment detailed how the Minnesota Public Utilities Commission (PUC) is mad about the fact that natural gas supply shortages in February’s polar vortex will increase home heating bills by around $350 this year. We also explained how the PUC is likely contributing to future price spikes by approving the premature retirement of Minnesota’s coal-fired power plants.
Now, new data from the U.S. Energy Information Administration show that natural gas inventories are low, potentially setting up a more dangerous and more expensive sequel.
According to EIA, high levels of natural gas exports and relatively flat production have resulted in below-average injections of natural gas into storage facilities this summer. Demand for natural gas has also increased by about 6.2 percent because of use of natural gas for electricity generation in response to hot weather. This higher consumption is leaving less natural gas available for the winter season.
So far this injection season (April 1—October 31), U.S. inventories of natural gas have grown by 960 Bcf, 14 percent less than the five-year average inventory build from April to July.
Low stocks of natural gas could present a real problem when we have another event like this February 2021 Polar Vortex, where wind production fell and natural gas generation needed to rise to pick up the slack.
Minnesota policy makers are setting families and businesses up to learn a very expensive lesson about the importance of having a diverse fuel supply for electricity generation. We need to understand that putting all of our eggs in the wind, solar, and natural gas basket will make price spikes much more common and expensive in the future.
Rather than wasting money on energy sources that don’t show up when we need them most, utility regulators would do better to utilize our existing plants until the end of their useful lifetimes, and then look for reliable, affordable, and environmentally friendly technologies to replace them.