This is a response to The Daily Gazette’s May 22nd editorial calling for investigations of utility companies.
I was as shocked as many others were upon opening the recent monthly utility bills. I thought that National Grid made a mistake and called the company for some explanation. The very polite lady that talked with me explained that the companies that supply the utility with electricity and natural gas experienced unexpectedly higher costs. The costs were simply transferred to the utility, and the utility transferred the costs to us, its retail customers.
The question of “why” the higher utility costs could not be simply answered. But we have been down this road before.
Sen. Charles Schumer always calls for an investigation following an abrupt rise in energy prices. The senator has nothing to lose with such press releases. However, we never have a follow-up from such investigations.
Previous government investigations always have determined that the many energy companies do not conspire to raise prices. But that fact is never published. It has been over a year since I wrote to Sen. Schumer concerning the last energy price rise. I have had no response to date. It is unfortunate that Sen. Kirsten Gillibrand is following that same unproductive political path.
I do not consider myself an expert on the energy market. However, my interest in energy dates back more than 50 years when I was employed as a petroleum engineer by a medium-sized energy company. I have seen the nation’s energy supply move from an exporting mode in the 1950s to energy import beginning in the 1970s.
Energy is an international commodity. It is traded on the “spot market” daily. That means that the price changes daily and is dependent on many factors — primarily political and weather conditions. Does anyone remember the oil embargo of the 1970s when there were long gas lines? That is when the northeastern political class began charging the energy companies with a “conspiracy” to raise prices.
Little has changed over the years.
Market forces drive the price of energy and no company, or nation, can control it. Oil, natural gas and coal supply the world’s economies and will continue to dominate our economy for many years in the future. The popular wind and solar industries will probably triple in size, with substantial taxpayer support, in the next 20 years. But they still will supply only 10 percent to 12 percent of national needs.
However, our political class can help reduce the cost of energy, if there is a will to do so.
The Obama Administration continues to delay approval of the international crossing of the Keystone Pipeline. The pipeline is being constructed in the midsection of the country where federal approval is not required. The failure to approve the international boundary crossing is political, as the environmental concerns have been addressed.
That connection would assure a steady flow of energy from Canada, which would reduce the impact from the next energy shock. The consequence of that lack of action is seen in Albany with the greatly increased use of rail transport to the Port of Albany. Sens. Schumer and Gillibrand could help by urging the administration to approve the pipeline crossing.
The Obama Administration hates the coal industry and has adopted regulations that will slowly put the nation’s coal industry out of business. Currently, coal energy supplies almost 40 percent of the nation’s electrical energy. The current governmental policies not only terminate countless jobs, but force utilities to obtain energy from other sources — at higher costs. This is another component affecting National Grid’s customer cost last winter.
The cost of natural gas is still another component. Natural gas development has been a boon to much of the nation — except in New York. After years of study and development of comprehensive controls for natural gas by the state Department of Environmental Conservation, Gov. Andrew Cuomo has not approved this energy development component. This lack of decision is not technical, but political.
One final point. Had the proposed pipeline from the Southern Tier to Albany been in place, would National Grid have been forced to buy expensive gas reserves last winter that was reflected in the customers’ bills?
That question cannot be accurately answered, but one can assume with the availability of increased supply, consumer costs would have been reduced.
Unwise federal and state policies have only begun to impact the price of all consumer goods, including food. The call for investigations of National Grid will not address the energy issues. We should remember these facts when we go to the polls and vote for those to represent our interests.
Russ Wege is a retired engineer who lives in Glenville. The Gazette encourages readers to submit material for local issues for the Sunday Opinion section.