Fossil Foolishness

The new federal administration promised to “cut energy prices in half within 12 months.” How’s that going?

The U.S. Energy Information Administration forecasts that average residential electricity prices will hit a 10-year high in 2026, and consumers are worried.

A new report from the Center for American Progress describes how this might be just the beginning.

Executive actions (that may or may not be lawful) freezing clean energy funding, pausing offshore wind power approvals, halting approved projects, weakening efficiency standards, and excluding wind and solar projects from “permitting reform” measures will raise electricity prices and slow the clean energy transition.

But the biggest spikes in energy prices will come, not surprisingly, from actions around natural gas.

The Biden Department of Energy warned in December 2024 that unrestricted exports of liquid natural gas would increase domestic natural gas prices by 31% by 2050. As then-Secretary Jennifer Granholm observed, LNG exports have tripled over the past five years, will double again by 2028, and could double yet again under existing authorizations. The quantities already approved for export, she noted, equate to about half of total current U.S. natural gas production. 

A new study prepared by the non-partisan Center for Energy & Environmental Analysis says that the U.S. has entered “a new energy paradigm” of “rising domestic energy prices alongside rising energy production.” It reports that this year, for the first time, the total volume of U.S. natural gas exports will exceed the total amount of natural gas consumed by the entire U.S. industrial sector.

Pushing most domestically produced gas into volatile international markets inevitably raises domestic prices and harms consumers in three ways: higher home heating bills, higher electricity bills, and higher cost of goods from U.S. manufacturers, whose global competitiveness also suffers.

Prices rise further due to ill-advised moves by states and grid managers to promote new gas generation and distort markets. Besides baking in ever-higher fuel costs, they also ignore the fact that costs to build new gas plants have tripled, and could increase even further due to new tariffs.

To make matters worse, the new administration has taken on the fool’s errand of trying to bring back uncompetitive and unreliable coal-fired generation, which has dropped to an all-time low of 15% of U.S. electricity production.

Authorizing the Department of Energy to use its emergency authority to prevent uneconomical coal plants from closing—and maybe even requiring closed coal plants to reopen— will further inflate electricity prices.

Throwing a life preserver to more than a third of remaining U.S. coal-fired capacity by exempting them from complying with more stringent regulations on the emission of mercury and other toxic pollution will only succeed in making neurotoxin pollution great again.

Wind and solar energy are both clearly cheaper than coal-fired generation. According to an analysis by the non-partisan think tank Energy Innovation Policy & Technology, all but one of remaining U.S. coal plants are more expensive to operate than either new wind or new solar power. Replacing them with solar or wind would lower energy costs (and emissions), drive more battery storage buildout to enhance grid reliability, and help diversify local economies.

In the fact-based, market-driven world, solar power is the least cost option for new electricity generation in a significant majority of countries worldwide—see, for example, China—and it continues to be the fastest-growing source of U.S. generation. Last year, wind and solar together generated more electricity than coal for the first time ever. Grid-scale battery storage capacity increased 66%, and will eventually mitigate renewables’ intermittency challenges. Clean energy—mostly solar and storage—accounts for 96% of all proposed new U.S. generation. 

Consumers pay for fossil foolishness, and markets respond to it. In the last three months, nearly $8 billion in domestic clean energy projects—and thousands of U.S. jobs—were canceled, closed, or downsized.

John Quigley

Senior Fellow, Kleinman Center

John Quigley is a senior fellow at the Kleinman Center and previously served on the Center’s Advisory Board. He served as Secretary of the PA Department of Environmental Protection and of the PA Department of Conservation and Natural Resources.