Our Overdependence on Methane Gas is Costly: We Need Policymakers to Pass Clean Energy Legislation Now 

May 31, 2022 | 12:37 pm
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Ashtin Massie
Energy Analyst

Rising prices of methane gas used for power and heating, exacerbated by Russia’s invasion of Ukraine, are contributing to soaring electric and heating bills across the country. This is exacerbating a crisis in energy insecurity that has only worsened during the pandemic, leaving many more families struggling to pay their bills, facing disconnection, or already shut off from their utility service. 

Many of my colleagues have already described the various ways we’ve gotten into this elevated fuel price mess, why doubling down on fossil fuels at this moment is a horrible idea, and why doing so would not improve our current or future economic, geopolitical or environmental problems.  

I’m adding my voice to the chorus by focusing on an underlying issue of the affordability crisis—the utility-driven overreliance on methane gas used to produce electricity and heat—and the actions policymakers need to take to combat this practice and provide relief for US families.  

We urgently need more action and oversight from policymakers at every level, from Congress to federal and state regulators, to address the consequences of methane gas overreliance head-on. And such action cannot be influenced by fossil fuel interests and their policy proposals that we are seeing in Congress. 

Rather, strong investments in clean energy, energy-efficient homes, and programs supporting energy-insecure households—coupled with stronger utility oversight—all could start to provide rapid relief directly to families who are feeling the pinch from elevated energy and heating bills. Additionally, such investments can provide reprieve for communities that are harmed by fossil fuel pollution, address the climate crisis, and prevent such affordability crises from reoccurring in the future. 

How Did We Get Here? 

One of the problems we are feeling the consequences of right now is our nation’s escalating dependence on methane gas (also known as natural gas, or just gas). 

Over the past 30 years, the use of gas in the power sector has more than tripled, now responsible for 37 percent of the power sector’s net generation. In addition, nearly half of US homes are heated by gas, according to the US Energy Information Administration’s (EIA) 2020 Residential Energy Consumption Survey. And between 2010 and 2020 across all economic sectors, the share of US primary energy consumption from methane gas increased from 25 to 34 percent. 

Sourced from EIA April 2022 Monthly Energy Review (Table 7.2b Electricity Net Generation: Electric Power Sector) 

This current rate of consumption of methane gas for electricity and heating—along with our past and ongoing overconsumption of gas in commercial and industrial processes and growing demand for liquified natural gas (LNG) exports—is tightening gas supply and contributing to sharp spikes in electric and gas prices. And because our society has this overdependence problem with methane gas, when its price spikes, no matter how much or what reason (be it geopolitical factors or regional grid and policy barriers preventing access to clean energy alternatives) we feel it on our bills.  

According to a recent report, there were more than 3.6 million utility shutoffs in 2020 and 2021 in the 33 states (and Washington, D.C.) that collect shutoff data. The report attributed this in part to rising costs of methane gas used for electricity and home heating, costs that utilities pass through to ratepayers. The report also noted that, over the same period, these same utilities have undertaken some assortment of increasing shareholder dividends, laying off workers, and giving executives pay raises, despite collectively receiving $1.4 billion in taxpayer subsidies from COVID relief funds meant to help prevent disconnections. 

Overdependence on methane gas, corresponding overexposure to methane gas prices and their fluctuations, and insufficient utility oversight have only exacerbated energy affordability issues. And this utility-driven overdependence on fossil fuels—both gas and coal—significantly contributes to the climate crisis, and with it, toxic air and water pollution that threatens public health and disproportionately impacts low-income communities and communities of color. 

Ignore the Fossil Fuel Industry’s Messaging 

Fossil fuel interests recently have called for an “all of the above” national energy strategy that would incentivize all types of energy production to solve the energy problems we face. Don’t be fooled: What these fossil fuel proponents really want are fossil fuel incentives and eased environmental standards. 

One obvious problem with this strategy is that fossil fuel companies are already supported by billions of dollars in annual government incentives and could readily increase production if they wanted to (which they don’t want to do, and neither do we). We do not need to provide fossil fuel companies with more wealth for no gain, especially now, when millions of households have lost access to their utility services at some point over the past two years. 

Easing existing environmental standards, meanwhile, would only help fossil fuel companies and their bottom lines but will do nothing to help us nowand would only continue to threaten public health, exacerbate climate change, and create additional deadly and costly climate impacts that we feel and pay for.  

Neither of these actions will provide the relief needed for the exorbitant number of households experiencing energy insecurity today, neither will insulate consumers from fossil fuel price shocks in the future, and neither does anything to ensure that our utilities are operating in our best interests. So we don’t need more fossil fuel subsidies or environmental rollbacks – what we need is action to wean us off fossil fuels so these affordability crises don’t continue. 

Policymakers Must Invest in Affordable Clean Energy

We need stronger federal and state oversight and bold investments that protect families and communities over fossil fuel executives, reduce exposure to volatile fossil fuel prices, hold utilities accountable to their customers, and create a safe, clean and affordable energy system.  

Federal and state lawmakers have the power to reduce the harmful consequences of our current overreliance on methane gas, and here are four actions with which they should start: 

  • Pass clean energy tax credits as a way to reduce gas use in the power sector, and resist calls for hasty and reactive incentives for fossil fuel extraction and infrastructure. Clean energy tax credits can help build out a diverse portfolio of clean energy resources that can replace the need for expensive gas-fired power. Such tax credits have been shown to more than make up for their costs in net ratepayer savings and public health benefits, can be crafted to provide benefits quickly to those that need it most, and can be bolstered with legislation that promotes stateside manufacturing.  
  • Increase investments in energy efficiency and building electrification to cut gas use in homes and buildings and reduce our direct exposure to volatile, expensive methane gas prices. Upgrading from gas appliances to energy-efficient electric alternatives, including switching from gas furnaces to heat pumps, can reduce residential exposure to expensive gas prices and provide long-term consumer savings. Tax credits and incentives can help with these upgrades’ upfront cost and making incentives available at the point of purchase would reduce financing barriers while providing longer-term energy savings.  
  • Address the present-day consequences of over-relying on methane gas by thoughtfully deploying existing Low-income Home Energy Assistance Program (LIHEAP) and Weatherization Assistance Program (WAP) funding and continuing to bolster these programs as necessary. While the recently passed infrastructure bill gave WAP and LIHEAP major boosts, current events have undoubtedly put pressure on these programs, and a hot summer will only add to that strain. Monitoring these funding levels, while expanding funding and eligibility criteria to help additional low- and middle-income families get through the current energy affordability crisis, would help keep the lights on for many families who may otherwise face disconnection.  
  • Finally, both Congress and federal and state agencies should open investigations into utilities that are not looking after the best interests of their ratepayers. Keeping the power on saves lives, and it’s a shame that we live in a society where utilities can prioritize shareholders and executive compensation packages while shutting off their customers’ heat and electricity. Diligent oversight, especially now, to ensure that utilities are not running their resources uneconomically and passing excessive costs on to ratepayers, is imperative. Similarly, now is an excellent time for state regulators to consider exploring new equitable rate structures that motivate utilities to work more efficiently while ramping up renewables and driving down the use of methane gas. Congress, federal agencies, state regulators and regional grid operators have the power to act in these areas, and they should.  

We need policymakers at the state and federal level to act now to help build a diverse and resilient clean energy system, reduce our dependence on methane gas, keep utilities accountable to ratepayers, and ensure that families across the country can afford their energy bills now and in the future. We need an energy mix that isn’t so reliant on one expensive fuel that is rife with economic, environmental and geopolitical risk. Strong investments in clean energy alternatives, energy efficiency and electrification that contribute to a more affordable, healthy and independent energy system are a great place to start.