Americans brace for utility bill sticker shock

Americans are bracing for gas and utility bills that will likely be sharply higher as a perfect storm hits the United States. 

Severe weather from Hurricane Ida and Tropical storm Nicholas are complicating an already watered-down U.S. energy policy that will leave consumers footing a bigger bill to drive and stay warm or cool. 

Those billions will be made on the backs of hardworking Americans who will see more of their money evaporate in the gas tank and with their winter heating bills. Gasoline prices are at $3.18 a gallon, about $1 a gallon higher since President Joe Biden took office. 

CONSUMER PRICES RISE 5.3% IN AUGUST

DEMOCRATS PLAN COULD PUSH TAX RATES TO 60% FOR SOME

Henry Hub Natural Gas spot prices have surged over 128% annually as tracked by Macrotrends. 

Electricity and utility gas prices were up 5.2% and 21.1%, respectively, over the last 12 months in August, as reported by the Wall Street Journal. Goldman Sachs is urging users of natural gas to protect themselves from what could be a massive price spike. Higher energy costs are bleeding into inflation and some analysts predict that gas prices could double this winter if U.S. production doesn’t increase and global demand continues to remain high, in my view. 

While Biden is out on a tour trying to promote green energy investment and discouraging investment in U.S. fossil fuels, the International Energy Agency (IEA) is warning that "weak investment" in oil projects is "already impacting global supply" and a devasting hurricane season has depleted supplies and knocked production offline. 

That is adding to inflation and putting a drag on the poor and middle class in the U.S., not to mention the impact on small businesses. Biden's energy policy is proving to be one of the greatest transfers of wealth from the poor and middle class and into the hands of "Big Green" that the country has ever seen. The very same companies will make billions while attempting to remake the U.S. energy industry.

Our European neighbors are already getting pinched. The wholesale price of European natural gas is reportedly equivalent to $150 a barrel of crude oil, which is higher than the all-time high price for crude oil. 

This week alone electricity prices in the U.K. spiked to an all-time high of $490 per megawatt-hour, which, according to Bloomberg data, is a 700% increase from the 2010 to 2020 average. Germany’s electricity benchmark also doubled this year. According to Bloomberg, that 12.3% increase was the largest since 1974 and contributed to the highest inflation reading since 1993. 

The shortsighted rush to get off of fossil fuels has already created a crisis in Europe. The Wall Street Journal points out that Europe’s anti-carbon policies have created this fossil-fuel shortage. These governments have heavily subsidized renewables like wind and solar and shut down coal plants to meet their commitments under the Paris climate accord. But wind power this summer has flagged, so countries are scrambling to import more fossil fuels to power their grids. Because of that, Europe has a shortage of natural gas and prices are going through the roof. There are real concerns that they will have enough gas to keep Europeans warm this winter. 

In the meantime, China is benefiting from taking advantage of the global carbon push, seeing it as an opportunity to make sure that while the world goes greener they secure more of the global supply. They are not only dealing heavily in black market Iranian crude, they are now investing heavily in Venezuela to rebuild their oil and gas reserves, which are the biggest in the world. Russia is also refusing to accept requests for deeper carbon emissions cuts asked for by the Biden administration as they try to secure reliable supplies of oil and natural gas.

The U.S. and Europe may continue to try to go green, but China will never take on its fair share of the green energy agenda burden. They will exploit the U.S. and Europe's energy plans and become stronger economically while the U.S. and Europe become weaker.

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Phil Flynn is senior energy analyst at The PRICE Futures Group and a FOX Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com.