U.S. braces for winter energy price hikes

City skyline and river in winter

Forecast shows why Line 5 is vital

Oct. 20, 2021

It’s that time of year.

Pumpkins dot front yards, leaves are turning, and soon temperatures will fall, driving people to turn up their thermostats as they get ready for Michigan’s brisk fall and winter weather.

This year, the simple action of raising the thermostat is going to hit wallets—and hard, according to the U.S. Energy Information Administration (EIA) Winter Fuels Outlook released Oct. 13.

According to the EIA report, prices for U.S. consumers in general were 5.4% higher this September than last September. It is a strong reminder that inflation is affecting the global economy at a pace not seen in 13 years.

Bottlenecked supply chains are hampering the post-pandemic economy, pushing up prices for groceries, clothing, cleaning products, paper goods, and energy.

Propane, oil, natural gas and electricity are not immune to the uptick.

Worldwide, the price for heating with oil, natural gas, propane, and other fuels is surging as energy demand outstrips supply. As such, the EIA expects households will see heating bills increase by 54 percent over last year.

The approximately 50% of homes in the U.S. that rely on natural gas for heat could pay an average $746 this winter, an increase of 30% over last winter. The EIA estimates those across the Midwest and low-income households will shoulder the brunt of the increases, as will households that rely on propane for home heat.

Close to home, 55% of Michigan and 65% of the Upper Peninsula rely on Enbridge’s Line 5 in the Straits of Mackinac to meet their propane demands. As such, they unlikely are to experience the sharp price spikes and supply challenges most of the U.S. will face.

“As evidenced during the Arctic blast in February, Enbridge’s Line 5 has proven to be a reliable source for providing essential light crude oil and propane to the region,” said Bob Lehto, Enbridge’s operations manager for the northern Michigan area. “The continued safe operation of Line 5 will help Michigan blunt the spikes in energy prices that come from supply constraints.”

While most will experience the rise in energy costs, low-income families may likely shoulder the bulk of it, according to the EIA. Namely, the EIA report cites pay raises failing to keep pace with inflation putting people in a position to choose between staying warm or having food on the table.

“The U.S. is the largest producer of oil and natural gas,” continued Lehto. “People should not have to choose between eating and staying warm, because we have ample energy supplies. This underscores the importance of Enbridge constructing the Great Lakes Tunnel to house a replacement section of Line 5 in the Straits. The region has benefitted from Line 5 for 68 years, and construction of the Tunnel will enhance the continued safe operation of Line 5, protect our waterways and continue to provide the region with affordable supplies of propane and other fuels. The Tunnel makes a lot of sense.”