The Sconi

Residents of Wisconsin may face harsher conditions than just frigid northern temperatures this winter as the state is among those with the highest natural gas prices. Inflation and less reliance on fossil fuels is predicted to drive an all-time record increase in market prices.

Wisconsin is currently ranked 14th in the nation for its cost of natural gas which comes in at $16.62 per thousand cubic feet, according to Choose Energy’s Natural Gas Rates Index. According to the Natural Gas Weekly Update for Oct. 27 to Nov. 3, data from IHS Markit shows the average total U.S. natural gas demand rose by 5.7% to 5.2 BCF/d week over week for the second week of a significant increase in demand.

“Natural gas market prices are higher due to the economic recovery from strong natural gas demand from last winter, along with slower than anticipated production this year,” Richard Meyer, vice president, energy markets, analysis and standards at the American Gas Association, told MSN.

As the weather cools and Americans are turning on their heating systems, keeping warm will be  more costly this winter, according to Real Clear Politics. The prices of natural gas and propane have increased by 89% and nearly 300%, respectively.

According to the International Energy Agency, natural gas prices have reached a 13-year high. Rob Thummel, an investment manager focusing on energy at Tortoise Capital, predicts that if temperatures remain around average this winter, heating bills will increase by 50-75%, the Providence Journal reported.

"By pursuing policies that restrict supply and make it harder to produce oil and natural gas here in America, Americans will have to pay more for their energy," American Exploration and Production Council CEO Anne Bradbury said in an Oct. 15 statement criticizing the Biden administration’s energy policy.

The U.S. Energy Information Administration predicts that propane expenditures will rise by 54%, heating oil by 43%, natural gas by 30%, and electricity by 6%. Dan Eberhart, CEO of oilfield services company Canary, predicts in a commentary in Forbes that because of inflation on groceries and other commodities, consumers will have less to spend on their home heating bills. He also argues that the rising energy costs will affect the deliveries of goods and increase inflation.

In what they deem the “inflation tax” the Wall Street Journal Editorial Board points out that “workers are paying the price” for increased costs since “real hourly earnings are down 1.9% since January.”

Steven M. Teles, Samuel Hammond, and Daniel Takash authored the September 2021 paper wherein they acknowledge that while “[s]oaring costs have blown a hole in the budgets of the working and the middle classes, offsetting the full benefits of a growing economy” some of the solutions proposed by progressive politicians such as “simply socializing the costs and blowing an equally large hole in the federal debt is not a sustainable alternative.” 

Teles, Hammond, and Takash found that “the root cause of escalating costs is overwhelmingly regulatory, rather than budgetary,” and that “shifting costs onto the public would not only fail to fix the underlying problem; it could also make cost disease substantially worse” resulting in a “vicious cycle in which subsidies for supply-constrained goods or services merely push up prices, necessitating greater subsidies, which then push up prices, ad infinitum.”