Federal and state policies designed to rapidly decarbonize the U.S. economy will cause already high energy prices to spike again this summer, current and former federal energy officials say.
Climate policies, for example, have led to a growing number of premature shutdowns of natural gas-fired power plants and dwindling investment in developing national fossil fuel infrastructure, Federal Energy Regulatory Commission (FERC) officials said at Fox News Digital. Switching too quickly from traditional fossil fuel-based electricity generation to wind and solar power also increases the possibility of an unstable grid and widespread outages.
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“Americans are already suffering at the gas pump, and I’m very concerned that the combination of extremely high prices and the possibility of breakdowns and brownouts will really make it clear that we’ve lost sight of reliability, only in our zeal to decarbonize, we’ve lost that critical focus,” former FERC chairman Neil Chatterjee told Fox News in an interview.
“When I was at FERC, I felt it was my primary obligation, our responsibility to monitor the reliability of the grid,” continued Chatterjee, who served on FERC between 2017 and 2021. “I think we have prioritized decarbonization over reliability and unfortunately it will take catastrophic events to recalibrate things and refocus our attention on reliability.”
The average wholesale electricity price is expected to increase significantly nationwide between June and August compared to the same period last year, according to the Energy Information Administration (EIA). New England consumers alone are expected to pay 200% more for electricity year-over-year this summer.
The Henry Hub Futures Index, the US benchmark for natural gas prices, showed on Wednesday that commodities were trading between $6.85 and $6.88 per million British thermal units (MMBtu) for the rest of the summer. The index, by comparison, averaged $3.26 per MMBtu between 2010 and 2021, according to Federal Reserve data.
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“The Biden administration, from the outset, has pursued policies aimed at aggressively moving away from fossil fuel production,” Chatterjee told Fox News Digital. “I’m someone who is excited about the energy transition and thinks the energy transition has great benefits for Americans, but there are some people in the administration who want to skip the transition part of the energy transition. and drastically move away from the necessary generation that we need.”
“We are now seeing the consequences of this, both in terms of incredibly high prices that will hit consumers,” he said.
Chatterjee added that the FERC’s recent pipeline policy will drive up natural gas prices and hurt the reliability of the U.S. electric grid. The commission released two policy statements requiring analysis of climate impacts and greenhouse gas emissions as part of the federal pipeline approval process.
FERC Commissioner Mark Christie, one of two Republicans on the Democratic-majority commission, said politics is “a huge impediment to developing the pipeline capacity needed to leverage our national resources.”
“The uncertainty resulting from this certificate policy remains a barrier to new investments in pipeline capacity,” Christie told Fox News Digital.
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Christie added that the policy further discourages domestic gas production, as companies face barriers to transporting supply to market. Less supply will cause prices to rise as demand increases during the peak summer months.
“Increasing gas production and supply cannot happen overnight and it requires more than drilling, it requires increasing gas transportation capacity,” he continued. “This requires sufficient pipeline capacity. Pipelines are the only realistic way to transport gas supplies in large quantities from US gas fields to consumers.”
“Nobody is going to invest in new production if they can’t get the gas to market,” Christie said.
The FERC commissioner warned that state-regulated utilities were prematurely shutting down “distributable” generation sources — which include natural gas, coal and nuclear plants — resulting in capacity shortfalls. About 15 gigawatts of power generation capacity is expected to be retired in 2022, according to the EIA.
The North American Electric Reliability Corporation (NERC), a federal grid watchdog, concluded in its annual summer reliability assessment that the majority of the country was at increased risk of outages due to reduced generating capacity.
“For a number of years we’ve been slowly changing our resource mix, removing old nuclear and coal units and bringing in only a ton of wind and solar power,” said John Moura, director of the NERC reliability assessment and performance analysis. Fox News Digital in an interview. “And that’s something really good from the point of view of our aspirations for the ability to decarbonize.”
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“But this transition really can’t happen overnight,” he continued. “And building a replacement generation and drivetrain really takes time, so we really have to work on managing the pace so that we don’t prematurely retire the generation that we really need.
Moura said it was important for the United States to maintain dispatchable resources as part of its transition to renewable energy to ensure grid stability.
“Looking ahead, we just see that we see more risk,” he added.
Democratic FERC Chairman Rich Glick referred Fox News Digital to the agency’s press office. A spokesperson for the agency declined to comment.