Polar Vortex Sends Gas Prices Soaring, Underscores Need to Build Architecture of Abundance
The so-called Polar Vortex froze most of the country last week, sending temperatures in some areas to dangerous lows. The East Coast was hit particularly hard by the arctic blast, with the temperature dropping to a record four degrees in New York City. The frigid weather also sent natural gas prices soaring across the Northeast as families and businesses were forced to crank up the heat to stay warm. According to the Energy Information Administration, natural gas prices in New England more than doubled during the freeze and more than tripled in New York. A major reason for this price spike is America’s lacking pipeline infrastructure.
The country’s recent boom in natural gas production has led many electric utilities to switch to natural gas for power generation, but we do not yet have the infrastructure in place to support this conversion. Our pipeline capacity has simply failed to keep pace with our increase in production and the resulting demand to meet both power needs and home heating needs. Reuters reports, “The volatility shows that nearly a decade into a drilling boom that has flooded much of the country with gas, a lack of pipelines has left some areas vulnerable to shortages this year and potentially for years to come. It is a weak spot in what has been a huge resurgence in U.S. natural gas production over the past 10 years, and exposes how in some areas pipelines have failed to keep up with the new supplies that have come out of the ground.”
An important way to stabilize prices is to build more pipelines, but bureaucratic red tape is standing in the way of much-needed construction and investment. To solve this problem, the House recently passed H.R. 1900, the Natural Gas Pipeline Permitting Reform Act, which seeks to modernize the process for natural gas pipeline permit applications so we can get more pipelines in the ground quicker. The commonsense legislation, authored by Rep. Mike Pompeo (R-KS), is a critical component of the committee's efforts to build the architecture of abundance and will help allow Americans to fully enjoy the benefits of the U.S. shale gas boom. Ensuring pipelines are approved and constructed in a timely manner will help bring relief to customers across the country, particularly in the Northeast.
To learn more about the Natural Gas Pipeline Permitting Reform Act, click HERE.