Fracking has sent the price of natural gas plummeting, just not for the people who need it most.
The straight-out-of-the-ground price of natural gas is way down since the start of the boom in hydraulic fracturing. Back in 2008, users buying gas directly from drillers were paying an average of $7.97 per thousand cubic feet, according to the Energy Information Administration. By 2012, that cost — known as the “wellhead” price — had dropped to $2.66 in nominal dollars (not adjusted for inflation) resulting in a two-thirds discount in just five years.
However, those are the prices paid by pipeline operators, utilities, large industrial users, and other entities that can buy gas directly from the companies that drill for it.
By the time gas was piped into homes, individual consumers were still paying an average of $10.68 per thousand cubic feet. That’s down from $13.98 in 2008, but the $3.30 price drop is much smaller — both in absolute and relative terms — than the one that big buyers are getting further up the chain.
And consumers are about to give some of those gains back. The EIA projects that heating costs for residential customers using natural gas will rise by an average of 13 percent this winter, adding an additional $80 to the typical household’s energy bill over the course of the season.
The upcoming price hike is a sticking point for the natural-gas industry as it tries to use the promise of economic benefits to sell the public on fracking. And for customers, it’s a setback at a time when real wages are largely stagnant, household budgets are tight, and large-scale price cuts would mean much-needed relief.
None of this is to say the lower gas prices haven’t been helpful for consumers; the last few years of falling per-unit costs have reversed price increases that had spiked during the millennium’s first decade.
People close to some of the most vulnerable buyers of home heating see how it’s helping their constituents.
“About six years ago, when natural-gas prices were high, it was a real crisis,” said John Wells, who directs the home-heating assistance program at Action for Boston Community Development. “Low natural-gas prices have been a godsend to low-income families.”
And low natural-gas prices help households in areas other than heating. Cheap gas has cut costs for industrial users and electricity generators, who in turn pass some of those savings to consumers.
Indeed, industrial buyers are also catching a deeper discount than individual households. In 2008, industrial users were shelling out $9.65 per thousand cubic feet of natural gas. In 2012, that was down to $3.86, a price level they hadn’t enjoyed since 1999.
So what accounts for the savings gap between large users and small ones? It’s tempting to blame utility companies, which at first blush appear to be buying low and selling high.
But — so long as the nation’s regulatory system is working properly — that can’t happen, says Amy Sweeney, a natural-gas specialist at the EIA. Utility companies are subject to a public commission that has final say over the rates they can charge. And in setting those rates, the regulators and utilities are supposed to pass any fuel cost changes — up or down — to their customers.
Instead, utility rates vary based on how much a company spends on connecting customers with the gas supplies, and that’s where consumers may see new costs. As gas has gotten cheaper, more customers are looking to get it delivered to their homes and businesses, and that has driven demand for utilities to expand the pipelines and other amenities they use to deliver gas to homes.
And unlike raw-material costs, those infrastructure costs do get passed from utilities to consumers in the form of higher gas bills.
“To some extent, what a consumer pays is going to follow, at a lag, the energy markets,” Sweeney said. “But other things — a hookup charge, a delivery charge, taxes — those can be a pretty strong component of what a customer pays.”
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Before we get to the specifics of this exposé about escorts working the Iowa and New Hampshire primary crowds, let’s get three things out of the way: 1.) It’s from Cosmopolitan; 2.) most of the women quoted use fake (if colorful) names; and 3.) again, it’s from Cosmopolitan. That said, here’s what we learned:
- Business was booming: one escort who says she typically gets two inquiries a weekend got 15 requests in the pre-primary weekend.
- Their primary season clientele is a bit older than normal—”40s through mid-60s, compared with mostly twentysomething regulars” and “they’ve clearly done this before.”
- They seemed more nervous than other clients, because “the stakes are higher when you’re working for a possible future president” but “all practiced impeccable manners.”
- One escort “typically enjoy[s] the company of Democrats more, just because I feel like our views line up a lot more.”
No matter where you stand on mandating companies to include a backdoor in encryption technologies, it doesn’t make sense to allow that decision to be made on a state level. “The problem with state-level legislation of this nature is that it manages to be both wildly impractical and entirely unenforceable,” writes Brian Barrett at Wired. There is a solution to this problem. “California Congressman Ted Lieu has introduced the ‘Ensuring National Constitutional Rights for Your Private Telecommunications Act of 2016,’ which we’ll call ENCRYPT. It’s a short, straightforward bill with a simple aim: to preempt states from attempting to implement their own anti-encryption policies at a state level.”
Much has been made of David Brooks’s recent New York Times column, in which confesses to missing already the civility and humanity of Barack Obama, compared to who might take his place. In NewYorker.com, Jeffrey Frank reminds us how critical such attributes are to foreign policy. “It’s hard to imagine Kennedy so casually referring to the leader of Russia as a gangster or a thug. For that matter, it’s hard to imagine any president comparing the Russian leader to Hitler [as] Hillary Clinton did at a private fund-raiser. … Kennedy, who always worried that miscalculation could lead to war, paid close attention to the language of diplomacy.”
The New Covenant. The Third Way. The Democratic Leadership Council style. Call it what you will, but whatever centrist triangulation Bill Clinton embraced in 1992, Hillary Clinton wants no part of it in 2016. Writing for Bloomberg, Sasha Issenberg and Margaret Talev explore how Hillary’s campaign has “diverged pointedly” from what made Bill so successful: “For Hillary to survive, Clintonism had to die.” Bill’s positions in 1992—from capital punishment to free trade—“represented a carefully calibrated diversion from the liberal orthodoxy of the previous decade.” But in New Hampshire, Hillary “worked to juggle nostalgia for past Clinton primary campaigns in the state with the fact that the Bill of 1992 or the Hillary of 2008 would likely be a marginal figure within today’s Democratic politics.”
At first, “it was pleasant” to see Trevor Noah “smiling away and deeply dimpling in the Stewart seat, the seat that had lately grown gray hairs,” writes The Atlantic‘s James Parker in assessing the new host of the once-indispensable Daily Show. But where Jon Stewart was a heavyweight, Noah is “a very able lightweight, [who] needs time too. But he won’t get any. As a culture, we’re not about to nurture this talent, to give it room to grow. Our patience was exhausted long ago, by some other guy. We’re going to pass judgment and move on. There’s a reason Simon Cowell is so rich. Impress us today or get thee hence. So it comes to this: It’s now or never, Trevor.”