National Geographic reports “Leave it to British wits to put to rest any notion that the world's winter energy woes have been eliminated by the North American natural gas boom. They let loose Thursday, soon after Great Britain's largest energy supplier, British Gas, announced a 10% price hike to go into effect on the eve of the cold season. In what will go down as one of the great corporate social media faux pas, the company invited customers to dialogue using the hashtag #askBG on Twitter.
"Is it true that the water fountains at British Gas HQ are filled by collecting the icy tears of freezing children?" tweeted freelance animator Adam Proctor (@fortsunlight). "Do the @BritishGas board prefer to bathe in £20 or £50 notes?" tweeted the creative ad agency, Don't Panic London. "British Gas: Freeze pensioners, not prices," said one of the few mock ads that did not contain profanity. Things only got worse when U.K. Energy Secretary Ed Davey chimed in that he kept his heating bills down by wearing a jumper (British slang for a pullover sweater.)
This unleashed a "#jumpergate" torrent, even though Prime Minister David Cameron's spokesman tried to disassociate himself from his cabinet member's comment. "Let them wear jumpers!" declared The Independent newspaper. "We burned our jumpers last winter," tweeted Tara Herman, an executive producer at The Guardian. "Perhaps the Tories can donate some of theirs?" The dark humor underscored a serious reality about what the International Energy Agency just two years ago suggested might be "the golden age of gas." Unlike coal and oil, natural gas is difficult and expensive to transport. So even though hydraulic fracturing, or fracking, has allowed the United States to ramp up production quickly enough to overtake Russia as the world's leading natural gas producer, it won't directly warm homes across the pond this winter. (It may do so only indirectly, by continuing to cheapen U.S. coal enough to fuel record exports, much to the detriment of European Union goals to cut carbon dioxide emissions.
In the Shadow of Plenty, even within the United States, where more than half of households rely on natural gas for heat, consumers will be hard pressed this winter to find any sign of the hydraulic fracturing gas bounty on their utility bills. Forecasters at the U.S. Energy Information Administration (EIA) see a 13% increase in heating costs this season for households that use natural gas.
Offering some consolation, EIA points out that natural gas bills still will be lower than the five-year U.S. average. And homes heated by natural gas still will be significantly better off than the 6% of U.S. households, primarily in New England and the Middle Atlantic, that still rely on heating oil. For them, despite a slight drop in price from last year, EIA's forecast is for an average winter heating bill of $2,046, roughly double the cost of keeping warm for homes that use natural gas ($1,045.) Several complex factors have contributed to higher natural gas prices in the United States, despite the ongoing fracking boom and high production. Bottlenecks slow the movement of natural gas from remote fields to customers.
Home heating customers aren't the only ones lining up for natural gas; both electricity generators and big industry customers are clamoring for the same fuel, and there's only so much pipeline to deliver it. EIA noted that chilly New England in particular saw "extreme price spikes" in both natural gas and electricity during the winter of 2012-13 due to pipeline constraints. Unfortunately for the poor, higher winter energy prices hit at the same time that U.S. budget woes have sliced total funding for low-income heating assistance from $5.1 billion in 2010 to $3.3 billion in the fiscal year just ended. The number of households served declined about 19%, to 6.6 million, and the average benefit was cut about 20%, to $401. It all comes at a time when more people are in tight financial straits due to the sluggish economy, said Mark Wolfe, executive director of the Washington, D.C.-based National Energy Assistance Directors Association, which advocates for heating assistance for low-income families. "These programs (heating assistance) were designed to deal with a much smaller population of people in need," he said. "We have a lot people who are out there living from paycheck to paycheck."