The colder weather is coming, and that means natural gas prices are on the rise. In some parts of the country, prices have quadrupled in recent weeks as demand for natural gas spikes.
Per the Winter Fuels Outlook by the U.S. Energy Information Administration, the cost to heat a home will increase 30% compared to last year. The number of heating degree days is expected to increase 2.6 percent this winter, compared with last year’s winter.
The Industry’s Story
The oil and gas industry is quick to blame the government for these price increases. They say that increased regulations and taxes are making it more expensive to produce natural gas.
Environmental advocates, on the other hand, say that the industry is simply trying to pass along its high costs of doing business to consumers.
What’s the truth?
The Government’s Story
While it’s true that natural gas production has hit record levels, there are several factors involved in its cost. Here are just a few examples of what oil and gas companies are facing these days.
Increased demand for fracking is overloading pipelines, which means producers have to charge more for natural gas.
The industry is also facing a lot of litigation over water contamination and other environmental problems.
In addition, the industry is dealing with new regulations from the Environmental Protection Agency (EPA) that are increasing costs.
For example, the EPA has just finalized a rule that would limit methane emissions from oil and gas operations. Methane is a potent greenhouse gas, and the new rule will help to reduce its emissions by up to 45%.
Unsurprisingly, the oil and gas industry is not pleased with this regulation. It’s suing to block it, in fact. The EPA, however, says the methane rule is “a key part” of former President Obama’s Climate Action Plan.
While this new methane regulation imposes costs on the oil and gas industry, there are also opportunities for companies that support natural gas development.
In short, while the oil and gas industry does have a lot of moving parts, government regulations are only one piece of the story.
While it’s true that many different factors impact natural gas prices, including increased demand for fracking and court cases over environmental damage, there is another big factor in play here: the cost of doing business.
While industry advocates blame government regulations, the fact is that production costs are going up across the board. This includes everything from labor costs to the cost of materials.
It’s also worth noting that natural gas prices are still relatively low compared to other forms of energy. In most parts of the United States, electricity prices still cost about twice as much, on average. Oil is also more expensive than natural gas.
So, while the coldest days of winter may be yet to come, the political fight over natural gas prices has been going on for some time.
The current oil market is experiencing a major shift brought on by advances in technology that have opened up previously untapped opportunities.
One of the main changes is the U.S.’s ability to extract oil from shale, which has led to an unprecedented boom within the last decade. Shale oil extraction has caused U.S. production levels to grow exponentially since 2006 and it is now the world’s largest producer of oil.
Why, then, are oil prices so high when the U.S. is producing so much?
There are a few reasons for this:
1) The global demand for oil continues to grow, especially in developing countries, as they strive to increase their standard of living.
As a result, the global demand for oil has risen almost consistently over the last decade. New technologies have made alternative forms of energy appear more competitive in the market, but they still have not been able to fully supplant oil.
2) The U.S. is not the only country with shale oil reserves and other countries are beginning to extract their own shale oil, which has led to a decrease in U.S. market share.
Other countries, particularly China, are becoming larger oil producers. These countries have not yet reached their peaks in shale oil extraction, so production levels are expected to continue to grow in the future.
3) The break-even price for shale oil production is much higher than traditional production, so companies are forced to sell at a price where they are still making a profit.
When you say break-even price you are referring to the point at which expenses are equal to revenue. For shale oil, this is right around $50/barrel. This means that companies need to sell their oil at a price above this in order to make a profit.
4) OPEC, an organization of oil-producing countries, has maintained consistent production levels in order to keep the price of oil high in hopes that alternative energy will not be able to compete with oil’s market share.
In a recent report, OPEC released its projections for the future of oil and they do not believe that oil will be unseated by alternative energy in the near future, so they are trying to maintain a high price point.
These four major factors have caused the oil market to be in a state of flux for the last few years, and it is unclear how things will play out in the long term.
What is clear, however, is that the U.S. shale boom has transformed the global oil market and will continue to have a major impact for years to come.
Joe Biden is drawing criticism for proposing to shut down a major oil pipeline in Michigan one day after his climate change plan was released.
The president said he would consider shutting down the Line 5 pipeline in the Great Lakes to protect the environment. The move comes after an advisory panel sent Biden a report suggesting he shut it down, which was later signed off on by his campaign. Critics of the plan say closing the pipeline could lead to energy shortages during the winter months.
The 645-mile pipeline is situated in the Great Lakes, transporting up to 540,000 barrels of fuel per day. The line was completed in 1953 and has had over 1,500 leaks since it began operation.
Line 5 is part of a pipeline network that transports about 540,000 barrels of oil each day from Western Canada to refineries in the United States. Petroleum is extracted from the line in Escanaba, Michigan.
The line is also notable for passing under the ecologically sensitive Straits of Mackinac, which connects Lake Michigan to Lake Huron.
Biden’s plan for energy includes moving to 100 percent carbon-free electricity by 2050; doubling clean energy research funding; building the Green New Deal across the European Union and building a clean economy that creates high-quality union jobs.
Climate change activists welcomed his plan, but they also pushed him to support Senator Bernie Sanders’ Green New Deal proposal.
Former Michigan Gov. Jennifer Granholm, Biden’s energy secretary, says, “This is completely predictable,” saying that heating costs would rise regardless of the Biden administration’s decision on the pipeline. “Yes, it will happen. This year will be more expensive than last year,” Granholm added in an interview with CNN.
Biden’s campaign manager Greg Schultz said this week that the candidate “supports” the Green New Deal but is still reviewing it.
The campaign has not commented on the possibility of closing down Line 5.
A recent paper by The International Renewable Energy Agency attempts to quantify what a decarbonized economy might look like. The report compares energy use and CO2 emissions to show what 12 major economies might look like in 2050 if they cut their carbon dioxide emissions by 80 percent.
The findings show the challenges ahead to make deep cuts in emissions, and highlights that many countries are already reducing emissions.
They conclude that such a target is technically and economically feasible, but it would mean significant changes in how we live and do business.
Carbon Dioxide Emissions
The report examined the effect of steep reductions in CO2 emissions on energy use and the economy.
Global greenhouse gas emissions will increase from 46 billion tons to 65 billion tons on a business-as-usual trajectory by 2050.
A substantial reduction in emissions that hold warming below 2°C, would reduce global greenhouse gas emissions to 21 billion tons by 2050 [81% less than business-as-usual trajectory].
Energy Use and GDP
Cutting emissions by 80 percent would reduce global energy use by roughly 37 percent. This is because a lack of carbon-based fuels would require more efficient energy use and a switch to renewables.
In all 12 countries studied, GDP growth was larger than energy use growth. This means that countries could reduce emissions while at the same time growing their economies.
However, if economic growth outpaces emission reductions due to more efficient energy use, CO2 emissions would flatline or even rise slightly between 2020-2050 in many countries.
Even with rapid decarbonization, electricity generation accounts for only 20-40% of total primary energy demand by 2050 in all 12 countries studied. This is because widespread electrification of end uses, like heating and transport, offsets the gains made through switching to low carbon energy sources like renewables or nuclear power.
For example: In the USA, 80 percent of heat demand would be met by a combination of heat pumps and biomass fuels [70%] or natural gas [10%] in 2050.
In some countries, oil use continues to grow but at a much slower rate than current trends – due to greater fuel efficiency from electric drivetrains.
A Reversible Trend?
The report suggests that getting emissions down to 80 percent below 1990 levels is definitely possible but we still can’t tell if decarbonization is sustainable and at what cost.
It could be reversible, just like we’ve seen in historical examples of technological change [for example, coal]. Technology development drove down emissions by increasing energy efficiency and reducing costs for renewables, which allowed emissions to grow again without much government intervention or legislation.
The study discusses various sources of emissions to examine how economic growth, energy use and the energy mix changes with rapid reductions in emissions. However, it does not discuss land use [deforestation] or agriculture, which are important sources of greenhouse gas emissions. And it also omits black carbon [soot], another major threat to global climate stability with local impacts.
The report also does not quantify the social or environmental impacts of decarbonization – for example, how changes to energy use might affect employment levels in various sectors. Nor does it discuss the possibility of negative emission technologies [carbon capture & storage].
Rapid reductions in carbon emissions are technically feasible, but they will require an overhaul of our energy systems and lifestyles. This would be an incredible challenge, but we knew that already. This is why we need ambitious climate policy and technology pushing us forward towards a clean energy future, rather than just sticking with business as usual or becoming pessimistic about the challenge. The good news is that such rapid emission cuts mean that economic growth can continue uninterrupted.
Offshore wind is one of the fastest-growing renewable energy industries in the world. Despite the incredible growth, there are still significant challenges to overcome to make offshore wind a major source of power for regions of the United States, Europe, and Asia.
The U.S. harnesses far less of its available offshore wind power than many of our European counterparts. According to the National Renewable Energy Laboratory, Europe has over 5,000 offshore wind turbines with a total capacity of 9,400 megawatts (MW).
The United States has only one operating offshore wind farm that has been in operation since 2010. That project, which is located off the coast of Rhode Island, has five turbines with a capacity of 30 MW.
Offshore wind energy is clean and renewable, but some groups still face opposition due to the cost and loss of view. The U.S. Department of Energy’s (DOE) fact sheet on offshore wind describes two primary concerns: “visual impact and bird/wildlife interaction.” However, these concerns are outweighed by the many benefits of harnessing more energy from offshore wind.
The following facts highlight some of the major issues related to offshore wind and its future in America:
- The Offshore Wind Industry is Growing Fast
In 2008, the U.S. had no offshore wind energy capacity, but now the country has several major projects in development. The DOE expects that by 2018 there will be enough offshore wind turbines to power 1.2 million homes.
More than 4,000 MW of new offshore wind capacity was added between 2011 and 2013 across Europe, representing nearly $25 billion in investment. The cost of generating power from offshore wind has fallen by as much as 50 percent since 2010 and continues to decrease.
- Offshore Wind Energy is Clean and Renewable
Offshore wind turbines do not use fossil fuels like coal or natural gas; they rely entirely on the wind and sun for energy, making them renewable resources.
One of the biggest benefits of offshore wind is that it does not contribute to climate change. When the wind blows, turbines generate power, but they do not emit carbon dioxide (CO 2)—a major contributor to climate change. Nor will they overheat our oceans like nuclear or fossil-fueled power plants.
- Offshore Wind Energy Creates Jobs and Saves Taxpayers Money
According to the DOE, each 1,000 MW of offshore wind capacity can create between 5,000 and 6,000 jobs. The Atlantic Wind Connection alone is expected to produce up to 20,000 new jobs in seven states when it’s built.
Offshore wind farms also keep our natural resources free from waste by recycling the steel used in the turbines and repurposing components of retired wind farms.
- Offshore Wind Energy Supports Economic Growth
Offshore wind has the potential to provide power for households throughout the country, but it is especially important for states that are not self-sufficient in energy production. Wind turbines located far from land can harness the consistent wind that blows parallel to the coast, making it easier for states like New Jersey, Massachusetts, and Maryland to rely on offshore wind for their energy needs.
Currently, only about 2 percent of our country’s electricity is generated by offshore wind. But as more turbines are installed along the coasts, this number will continue to increase.
- The United States is Home to Offshore Wind’s Best Resources
The Atlantic Ocean offers up to 4,000 GW in technically recoverable offshore wind resources along both coasts. Researchers estimate these resources could produce enough power for our country’s entire grid.
The United States has more offshore wind potential than any other country in the world, but we are just beginning to tap into these resources.
One of the costs that any business owner needs to take into account is its monthly energy consumption. Knowing that a type of business consumes perhaps more than its fair share of energy is the first step in determining how to reduce energy costs, and when to advise clients on how to become more energy efficient. Below, we’ll detail the types of businesses that consume the most energy.
Food-related brick and mortar businesses
Restaurants, convenience stores, and grocery stores are among the businesses that consume the most energy in order to comply with stringent storage requirements. From refrigeration, to having to consistently heat food and keep other appliances going, these businesses are heavy energy consumers. One way to help reduce energy consumption is more energy-efficient appliances and storage units.
Car dealerships are among the highest use businesses when it comes to energy consumption. The lights that they use to highlight their products – namely, vehicles – are often high energy users. Additionally, the computer systems and the security systems many car dealerships rely on are also high energy users, given how often they are put to the test in bringing out models and working to help customers. Another energy drain is any body shop or repair shop that is attached to the car dealership, especially if they conduct any sort of scheduled maintenance on the vehicles they sell and/or lease.
Businesses that manufacture anything are often high users of energy, given the amount of electricity needed to run the machines that make the product, in addition to normal energy use of a large manufacturing and storage facility. For some manufacturers, investing in more efficient machines or hiring more personnel to do some tasks by hand could help reduce energy consumption.
Hotels, residential buildings, or office buildings
One of the largest users of energy when it comes to businesses are hotels, residential buildings, or office buildings. With frequent use of lights, heating and cooling systems, and power to run computer systems, televisions, or other facilities, these buildings are often hugely dependent on the energy grid. Some of these facilities can use less power through timers, temperature regulators, or other systems that reduce regular power consumption.
No matter the type of business that consumes a large amount of energy, there are ways to be mindful of that consumption and work to reduce it.
For so many people, part of the pain of owning or renting a home, condo, or apartment is the energy bill that comes monthly. In previous years, some devices were energy wasters no matter which brand was purchased by the consumer and led to higher energy bills. In recent years, smart home devices have not only become more ubiquitous, but more affordable as well. Now within the reach of most Americans, the question on the minds of consumers is often: how do smart home devices affect energy consumption? Below, we’ll detail how to talk to clients about how smart home devices affect energy consumption, depending on the device.
One of the most obvious energy users in your home is smart lighting. During stormy summers and dreary winters, lighting provides the brightness that powers your life, productivity, and time with family. Before, one used to have to turn lights on or off only, and even then it was dependent on a person remembering. How many times have people rushed out the door to an important meeting or appointment to remember they left the hall light on, or left their outdoor lights on from the night before? Smart lighting can help you by being set on a schedule or motion detection that that turns off when you’re not there, saving you time, hassle, and money. Additionally, they can also help overall energy usage even when the lights are on, given that smart lighting is often more energy efficient overall and you get the same amount of lighting for less energy usage. This smart home device will affect your energy consumption in a noticeable way.
Previously, thermostats were generally all the same and did not offer much flexibility in the way of changing temperatures unless at will. Over time, digital thermostats provided some more precision for homeowners or renters, but were largely the same. Luckily, smart thermostats can help you reduce costs in a natural way where the thermostat learns your rhythms, and heats and cools at appropriate times. Additionally, some systems could be programmed to cool less at night or heat less during the day, when temperatures are less extreme, as another way to generate cost and energy savings. This smart home device will positively affect your energy consumption by reducing a large user of energy in your home.
Smart home devices are here to stay, and they positively affect energy consumption in clients’ homes both in the short and long term. Using the information above, you’ll be able to ensure your customers have the information they need on another way to reduce their overall energy consumption and save money.
Being productive at work is tough. Between the constant demands from clients, colleagues, and potential leads, setting aside time to actually get work done – be it short term projects or longer term initiatives – seems to be more difficult by the day. Tools that used to be helpful to work and streamline processes like the phone, email, Zoom or Slack have become just another thing weighing you down. Your ability to make a living depends on your ability to be productive. Below are a few tips on how to increase productivity as an energy broker.
Block out your calendar
It may seem counter-intuitive to schedule time away from your clients and colleagues, but one way to accomplish work is to be “busy.” Creating time for yourself on your calendar will allow you to plow through pending items, from planning and goal setting to those nagging tasks that you’ve been putting off. This is one of the best ways to increase productivity as an energy broker.
Snooze your emails and incoming calls if you can
Another way to increase productivity as an energy broker is to snooze email and call alerts. This also applies to text messages. The quickest way to break your concentration is inbounds from anyone who can contact you, and while you can and should respond to them within a reasonable time – usually 24 business hours – few people are expecting an immediate response to their query. If you have an important negotiation or client case, clearly make time for that, but otherwise snoozing new notifications can have a positive impact on your productivity.
Take time away from the office
As odd as it may sound, one of the best ways to increase productivity as an energy broker is to take time off. There are numerous studies and anecdotal evidence that totally disconnecting from work at the right times is crucial to ensuring workers are energized, creative and ready to tackle the challenges that await them. No one works well when tired, and that includes brokers in the fast-paced energy industry.
These are just some of the ways that energy brokers can increase their productivity. Others choose to take up a hobby or exercise to replace their energy levels, and some may even consider getting help from a coach to optimize their time. No matter what way you choose to be productive as an energy broker, it can only benefit you, your business, and your clients!
Like many movements that center on choice, energy choice has myths and misconceptions surrounding it from those that don’t understand it.
Below, we’ll debunk 3 common myths about energy choice.
Myth #1: You’re compelled to buy energy from the energy company directly only
This myth is one of the most pervasive around energy choice. Energy companies want you to believe that they hold a monopoly on providing energy. In some states they do, but they don’t hold that monopoly across the country. Make sure you’re informed so you can help your clients choose the right way for you to get energy. If your clients’ state doesn’t yet have energy choice, tell them to call the members of their state legislature so they can get energy choice legislation created and filed by the people who represent them in the state capital.
Myth #2: The energy company is the most reliable source for energy and gets you up and running the quickest when there’s an outage
Energy companies sometimes rely on old infrastructure, outdated service models, and inflated staff levels to look like they are the best in the business but, given how they operate, they are sometimes the least likely to get you up and running quickly. Just because they are large does not mean they’re effective. Energy choice allows you to choose your provider in a way that makes sense for you. This provider can be more nimble during an outage and, knowing they will be in constant competition for your business, will try to get you back up and running as quickly as possible.
Myth #3: The only reliable energy source comes from the energy company itself and not other suppliers
For so many, the energy company has tried to propagate the myth that they are the only reliable source of energy and box out other suppliers who may be just as, if not more, reliable. Energy choice is about the ability to choose reliable energy providers who feel right for your clients and will provide you energy at a cost that works for your clients and their family.
Don’t fall for the energy companies’ 3 myths that we’ve debunked. Make sure to get informed to be able to combat their myths and misinformation.
As our nation has seen increased gas prices and shortages, so many have realized that our energy supply is vulnerable to attacks. One of the concerns for energy supply disruption has long been traditional attacks like a bombing of a pipeline or the disruption of a traditional energy supply route via land or sea. Confidence in backup systems also ran high, and the belief that reserves or that the government would release some of the strategic supply also tempered fears that any disruption would be disastrous. However, the recent cyberattack on the Colonial Pipeline demonstrates that a cyberattack can be just as disruptive and hurtful to the economy as a traditional attack.
What is the Colonial Pipeline?
The Colonial Pipeline is a 5,500 mile gas pipeline from New Jersey to the Gulf Coast in the United States. It transports nearly half the gasoline used by the East Coast and is the largest pipeline for gas in the country. The pipeline transports over 100 million gallons of gas each day and it reaches 50 million Americans. This means that Americans in North Carolina, Georgia, Virginia, and other states were impacted by shortages that hampered their ability to get to the grocery store, necessary medical appointments, and get to work for those who are commuting again.
What were the impacts of the cyberattack?
Besides the obvious shortage at the gas pump and cash crunch that came from higher prices, a few other impacts were felt. Airlines had to tap emergency reserves and some even had to alter flight routes to add refueling stops to keep their planes going. The federal government was forced to declare an emergency in 17 states and the District of Columbia in order to make the transportation of fuel easier to ease the shortage.
What was the purpose of the cyberattack and how did it happen?
The cyberattacks were carried out by extortionists who were looking for a quick payoff after breaking through the security systems. Colonial paid millions of dollars to the ransomware extortionists who compromised their security systems. As a precaution, Colonial then shut down the pipeline.
What does this mean going forward?
While gas prices have stabilized, and supply appears to be normalizing, the impact of the Colonial Pipeline shutdown is more far-reaching than the immediate availability crisis. Companies like Colonial will have to install better countermeasures against cybercriminals while ensuring that a backup supply is available should tragedy befall them yet again.