Energy Costs Surge Across the United States
Electricity prices are on the rise, with this winter's energy expenditures in the United States projected to be a full 10% higher than this time last year. While initial projections had expected residential energy spending to fall this year, a combination of frigid weather and rising prices is hurting many Americans at the meter. U.S. energy prices are rising so rapidly that they are outpacing inflation, and have reached a 5% annual increase.
Each year, the United States Energy Information Administration publishes a Winter Fuels Outlook that outlines forecasts for energy consumption, prices, and expenditures for American households. This year's initial report projected that homes mainly heating with natural gas would spend between 2% less or 7% more this winter than last. They've since had to update this report after frigid temperatures drove up energy demand and natural gas and propane prices have trended upward.
'January's cold weather increased natural gas consumption and resulted in near-record withdrawals of natural gas from storage,' the EIA reports. 'Similarly, U.S. propane inventories—which had been relatively full at the beginning of winter—were drawn down as consumption increased and are now near their previous five-year average. U.S. propane exports are also at record highs, which can also elevate domestic propane prices.'
Last year, a CNET survey found 78 percent of Americans are concerned about rising energy bills, and that anxiety is not likely to be alleviated any time soon.
While domestic energy prices are high across the board, the amount that you're paying at the meter also varies enormously by what region you live in. The price of a kilowatt-hour of electricity varies dramatically across the United States, from about ten cents in Washington state (thanks to cheap and abundant hydropower) to over 40 cents in import-dependent Hawaii. Some states also have deregulated grids, which were supposed to create a more competitive energy market and therefore drive down prices, but in reality this has not materialized.
"It's unclear on a systematic level whether deregulation has actually led to decreases in electricity rates, and that's because there's so many factors, including things like what's going on in Ukraine and the rate-making process," Joshua Basseches, an assistant professor of public policy and environmental studies at Tulane University, recently told CNET. "Whether it's had the effect that was promised on prices of electricity is very much up for debate."
Some experts contend that it's not really up for debate, and that it's clear that deregulation has failed in terms of lowering prices. The New York Times reports that consumers on deregulated grids have paid higher prices since 1998. 'On average, residents living in a deregulated market pay $40 more per month for electricity than those in the states that let individual utilities control most or all parts of the grid,' the Times reported back in 2023.
But rising electricity prices are not unique to deregulated grids, or even to the United States. Across the Atlantic, an ongoing energy crisis has pushed millions of European households into energy poverty. Part of this is fallout from Russia's 2022 invasion of Ukraine, but new reporting indicates that it's also at least partially due to predatory pricing, with utilities taking advantage of market volatility at the expense of consumers.
A report from British charity organization Citizens Advice found that UK utilities 'have pocketed a windfall of nearly £4bn from household bills during the energy and cost crisis' according to The Guardian. 'We now know that while households have struggled with sky-high energy bills, network companies have been making astronomical profits,' says Citizen Advice CEO Dame Clare Moriarty.
While electricity pricing in the United States is more complex thanks to multiple and overlapping grids with different regulatory mechanisms, there is also some concern that utilities are allowed to set prices in ways that over-emphasize profit and harm the consumer. They're also allowed to set prices higher according to expected expenditures which they don't always deliver on.
'It's like the utilities have a rewards credit card,' Joel Rosenberg of Rewiring America, a nonprofit focused on electrification, told Vox last year. 'And they get to keep the rewards for how much they spend, and the [customers] have to pay off the bill, even if that bill takes 80 years to pay off.'
There are many complex factors at play to determine what number shows up on your utility bill each month, the vast majority of which are outside of consumer control. However, not all hope is lost. There are key strategies that you can follow to lower your energy use and increase efficiency around your home to try to ease the sting of monthly bills in these frigid winter months.
By Haley Zaremba for Oilprice.com
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Los Angeles Times
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Time Magazine
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Trump May be Repeating Reagan's Deep Sea Mining Mistake
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The Nixon, Ford, and Carter Administrations pushed back against the attempt by developing countries to impose onerous regulatory and redistributive provisions on deep sea mining. Even so, the U.S. expressed a commitment to multilateralism and to the development of a comprehensive ocean governance agreement. In 1974, when a mining CEO wrote to Secretary of State Henry Kissinger asking for U.S. recognition of his company's claim to a stretch of seabed in the middle of the Pacific, the State Department refused. The U.S., the Department explained, supported the creation of an international legal regime and would not issue any unilateral recognition of mineral rights in international waters. But by the late 1970s, as negotiations over a treaty dragged on, Congress grew receptive to industry lobbyists seeking legislation that would protect their investments in mining sites beyond U.S. maritime jurisdiction. In 1980, lawmakers passed the Deep Seabed Hard Mineral Resources Act (DSHMRA). This obscure law vested NOAA with the authority to issue permits for mining beyond American jurisdiction until an international regime was put in place. Its drafters intended the law to be an interim measure, one that would soon be superseded by an international treaty. But in 1981, the Reagan Administration upended what were known as the law of the sea negotiations and withdrew U.S. support for the draft treaty over disputes about the deep sea mining provisions. The conservative administration saw the centralized management of seabed mining and associated redistributive principles as problematically socialist and anti-industry. This objection didn't prevent negotiators from completing the U.N. Convention on the Law of the Sea (UNCLOS) the following year. However, the U.S. became one of only four nations to vote against the adoption of the treaty. President Bill Clinton eventually signed the UNCLOS implementing agreement in 1994, when the treaty entered into force. But Congress never ratified it, despite the U.N. General Assembly approving changes that directly addressed the U.S.' deep sea mining concerns. In the three decades since, leaders across the aisle have argued that not signing onto the treaty was a mistake. The U.S. views most treaty provisions as customary international law, and thus effectively legally binding. But as a non-party, it has been sidelined when it comes to multilateral negotiations over U.S. claims to the extended continental shelf in the oil-rich Arctic. Additionally, the U.S. has had no direct voice in negotiations over the international seabed mining regime. Even so, until the 2010s, the fact that the Deep Sea Hard Mineral Resources Act remained on the books mattered little in practice. While it authorized the U.S. to unilaterally issue licenses to mine the international seabed area, no major confrontations occurred because nobody really wanted to mine the seabed anymore. Commodity prices had fallen and companies discovered that many initial estimates regarding deep sea mining costs and profitability had been overly optimistic. By the mid 1980s, the companies that had pushed for the DSHMRA no longer saw deep sea mining as particularly commercially attractive. Then came the so-called "clean energy transition." By the mid-2010s, it was clear that the trend toward electric vehicles and other renewables would drive enduring demand for batteries. This spurred renewed interest in deep sea nodules, which contain the nickel, copper, and cobalt required for lithium-ion battery production. Interest in—and opposition to—deep sea mining surged in the early 2020s after the government of Nauru triggered a legal provision demanding that the ISA finalize a regulatory regime and allow commercial-scale mining to move forward after decades of limited 'exploratory' ventures. Scientists, conservation organizations, and a growing cohort of national governments responded by calling for a moratorium on deep sea mining, in light of significant risks posed to marine ecosystems and insufficient knowledge of how mining might impact deep sea environments. This controversy has delayed the finalization of regulations that would permit commercial mining to move forward. These delays at the ISA, in turn, have frustrated corporate actors, like The Metals Company (TMC), which are keen to commence commercial-scale operations in international waters. Enter Trump. American efforts to unilaterally assert regulatory authority over areas of seabed claimed by the international community are not new. But Trump's executive order is particularly inflammatory as he doubles down on a U.S. position that many across the political spectrum view as outdated, despite growing international alarm over the potential adverse impacts of mining. Unlike in 1980, when the DSHMRA was first promulgated, there is now a treaty regime in force with respect to the international seabed that enjoys nearly universal acceptance. The ISA is working to finalize a regulatory regime that will govern if and how such mining should go forward. The most charitable interpretation of Trump's order would be to view it as a helpful prod to ISA negotiators to come quickly to an agreement and to get an international regulatory regime off the ground. But the move can also be seen as yet another tack away from internationalism, and an indication of ultimately self-defeating contempt for international norms and institutions. By showing disregard for the international regime governing the seabed, the U.S. provides moral cover for other countries—including adversaries—to do the same. Moreover, the 'untapped wealth' of the seabed has always been a somewhat chimerical notion, with states tending to overestimate the value of these resources while underestimating costs associated with their extraction. At best, the benefits of deep sea mining are speculative. Trump runs the risk of duplicating the mistakes of the Reagan Administration, which jeopardized the negotiation of a wide-ranging international treaty vital to U.S. national interests, like freedom of navigation, in an effort to cater to private industry actors who quickly abandoned deep seabed mining projects as economic conditions shifted. History suggests that prioritizing a speculative new extractive frontier over international ocean governance institutions could end up doing far more harm to American interests than good. Sonya Schoenberger is a PhD Candidate in History at Stanford University, where she researches decolonization and marine resource governance in Oceania.
