Home energy costs have been skyrocketing across Texas over the past few months, a trend that is expected to continue.
The cost of natural gas in the United States increased by over 50% since Russia declared war on Ukraine. Before the invasion, Russia was one of the world’s top gas-producing countries. Since then, the EU, the U.S., Canada, and the UK have agreed to, for the most part, cease purchasing gas and oil from Russia.
In 2015, the United States Congress passed a bill that ended longtime restrictions against selling oil and natural gas overseas. Since then, Texas has become the country’s top exporter of oil.
Unfortunately, the increased demand in Europe for non-Russian oil and natural gas has left a diminished amount for Texans. According to Garrett Golding, an energy economist with the Federal Reserve Bank of Dallas, the gas and oil industry is facing supply chain issues caused by the COVID-19 pandemic and labor shortages, leading to a rising demand that is not being met with rising supply.
In addition to those problems are increased costs at the state’s primary power grid provider, the Electric Reliability Council of Texas (ERCOT). After the 2021 power failure caused by the winter storm, ERCOT changed its operating procedures.
Before 2021, the organization’s primary focus was providing energy to customers at the lowest possible cost. After hundreds died due to the outages last year, ERCOT decided to focus more on reliability.
Ensuring the backup generators are always on in case of emergency is a very costly change, albeit a necessary one, resulting in energy bill surcharges for Texans that is expected to be in place for an extended period of time.
Breitbart reported that the price of natural gas in Europe has increased as much as 980% since the day Russia first “massed troops on the border with Ukraine.” German companies have expressed fear of a recession and energy rationing.
According to Kevin Book, managing director at ClearView Energy Partners, natural gas is starting to play the essential role in modern economies that oil once did.