Your Gas Bill is Rising, Even With Low Prices: Why America’s Pipelines Are a Problem
Michelle Lordi of Wyncote, Pennsylvania, isn’t imagining things. Across the U.S., homeowners are seeing gas bills climb, even as the wholesale price of natural gas remains relatively low. The culprit? A massive, and increasingly scrutinized, wave of infrastructure upgrades – and a business model that incentivizes utilities to keep building, even as the future of gas itself is in question.
The $49.1 Billion Pipeline Puzzle
PECO, the utility serving Lordi’s community, is investing $1.8 billion over five years to replace aging gas pipelines. This isn’t an isolated case. Nationally, gas utilities spent a staggering $49.1 billion on construction in 2023, a 50% jump from the previous year, according to the American Gas Association (AGA). But this spending isn’t simply about safety; it’s about profit. Gas companies typically don’t profit from the gas itself, but from building and replacing infrastructure, passing the costs – and a profit margin – directly to consumers.
From Safety Concerns to Ratepayer Burden
The push for pipeline upgrades originated after a tragic 2010 explosion in San Bruno, California, which killed eight people and highlighted the dangers of aging gas infrastructure. While improving safety is paramount, the focus has overwhelmingly shifted towards replacing pipelines – the most expensive option – rather than repairing or rehabilitating them. This approach, coupled with the utility profit model, has led to a dramatic shift in how we pay for gas. In 1984, roughly two-thirds of a gas bill covered the cost of the gas itself; today, that figure has flipped, with infrastructure, taxes, and utility costs accounting for approximately two-thirds of the total.
The Climate Conundrum: Investing in a Dying Fuel?
The timing of this massive infrastructure investment is particularly troubling. Scientists overwhelmingly agree that the world must transition away from fossil fuels, including natural gas, to avoid the worst impacts of climate change. This raises a critical question: why are utilities investing billions in infrastructure that may become obsolete within decades? Climate activists are increasingly challenging these investments, arguing they lock in fossil fuel dependence and divert resources from cleaner alternatives.
A Shift in Regulatory Thinking
Some state regulators are beginning to question the status quo. They are exploring cheaper, more sustainable solutions, including prioritizing repairs over replacements and even considering decommissioning sections of gas networks altogether. Massachusetts, for example, recently overhauled its pipeline replacement program, potentially saving customers up to 17% on related surcharges by prioritizing repairs and exploring alternatives like electric heat pumps. This represents a significant departure from the traditional approach and signals a growing awareness of the need to balance safety with long-term climate goals.
The Hydrogen and Renewable Natural Gas Gambit
The gas industry is attempting to address climate concerns through initiatives like renewable natural gas (RNG), derived from sources like landfills and manure, and blending hydrogen into existing pipelines. However, these solutions face significant hurdles. RNG supply is limited, and hydrogen blending requires substantial infrastructure modifications and faces technical challenges. These efforts, while potentially helpful, are unlikely to fully offset the climate impact of natural gas.
Export Ambitions and Domestic Costs
Adding to the complexity, the push to increase U.S. gas exports could tighten domestic supplies and drive up prices for consumers. While the AGA argues that increased production will meet demand, critics warn that prioritizing exports over domestic needs could exacerbate affordability issues. This tension highlights the conflicting priorities within the energy sector and the potential for consumers to bear the brunt of these decisions.
Electrification: The Inevitable Future?
A growing body of research suggests that electrifying buildings and powering them with renewable energy is the most effective path to decarbonization. Studies by Princeton University, Lawrence Berkeley National Laboratory, and the National Academy of Sciences all point to electrification as a key component of a net-zero future. This doesn’t mean gas will disappear overnight, but it does suggest a fundamental shift in how we heat and power our homes and businesses is inevitable.
The future of gas isn’t about bigger pipelines; it’s about smarter, more sustainable energy solutions. As regulators and consumers alike begin to question the long-term viability of gas infrastructure, a transition towards electrification and renewable energy sources appears increasingly likely. What role will you play in shaping that future? Share your thoughts in the comments below!
