Gas customers, and specifically those who get their gas from Montana-Dakota Utilities which serves about 115,000 homes and businesses in North Dakota, may be paying about $170 more, on average, for gas this year.
This isn't profiteering. Utilities such as MDU don't mark up the price of gas. It's a pass-through price for them, as you can see on your utility bills.
Energy markets are complex, the product of variables too numerous to mention here, but in this instance, the reason for the spike in the price of natural gas is easy to understand.
We've made ourselves far more dependent on power sources like wind and solar which, because they cannot be relied on to provide consistent baseload power, must be buttressed by natural gas plants. This has driven up the demand for natural gas, both in the United States and globally, at a time when the oil and gas industry is pitted against the headwinds of myopic environmental activism.
It's not just the American energy markets that are in trouble. "If you live in continental Europe or the UK the natural gas that heats your home this October is costing at least five times more than it did a year ago," the Financial Times reports.
A big part of Europe's problem is the wind didn't blow as much as expected. Maybe trying to supply inelastic demand for power with something as variable as the wind is just a bad idea?
The politically driven push to wind and solar has spiked demand for natural gas. On the supply side, the same political initiatives have also produced a class of activist investors who work to deny capital to the oil and gas industry.
The resulting spike in natural gas prices, which will show up in our gas bills and, less directly, elsewhere in the economy, is economics 101.
Demand is higher; supply is stagnant. That means we pay more.
"[Public Service ] Commissioner Randy Christmann said a rise in gas-fired power plants is competing with home heating needs," the Bismarck Tribune reports. "More gas-fired power is accompanying the shift toward wind and solar, as it can act as a backup to renewable sources when they are not producing electricity, he said."
For years, the proponents of wind and solar power have poo-pooed the predictions of higher prices and reliability problems. These were figments of the imagination of those beholden to the fossil fuel industry, they claimed.
Except, here we are, with the predictions coming true, and no abatement in sight for the short-sighted political push to wind and solar. Here in the U.S., our federal government continues to deliver a massive production subsidy for wind power, one that keeps getting renewed every year even as the wind industry claims (disingenuously, this observer believes) they no longer need it. This finger-on-the-scale in the energy market is driving the closure of baseload energy like coal and nuclear plants.
Think about that. Our power grids are less reliable, our energy prices are spiraling, and we're continuing to subsidize the factor at the root of it all. Though, it should be noted that the looming energy crisis has also spiked demand for coal power, a rare bit of logic in energy markets compromised by political ideology.
Had the energy markets been left to their own devices, and not manipulated by activists and politicians pandering to activists, we could have avoided this mess.
Now, we're stuck with it.
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Rob Port, founder of SayAnythingBlog.com, is a Forum Communications commentator. Reach him on Twitter at @robport or via email at firstname.lastname@example.org.