Key Takeaways
President Biden has invoked the Defense Production Act to justify subsidizing the manufacture of electric heat pumps, despite electric heating technologies costing more to install and run than natural gas heat.
The Energy Information Administration projects this winter’s heating bills to average $601 for natural gas users, but $1,063 for those using electricity.
The Biden Administration is making natural gas harder to produce, transport and consume, while subsidizing heat pump manufacturing even though China is the dominant producer of heat pumps.
Biden is pushing electrification across the economy (electrifying heat, cooking, transport, etc.), despite natural gas being cheaper than electricity.
Continuing with his climate agenda and push to electrify everything, President Biden is using war powers to manufacture more electric heat pumps so that he can stop the least expensive fuel for home heating from being used in new buildings: natural gas. According to the Energy Information Administration in its November 7 winter fuels outlook report, U.S. households using electricity to heat homes are projected to pay $1,063 on average between November and March, while households using natural gas are only expected to pay $601. That’s a difference of $462 on average. The difference is even bigger in the Midwest ($632), Northeast ($704) and South ($507). Further, since President Biden became President, residential electricity prices have increased 21 percent. And, the initial cost of a heat pump is higher than the cost of a gas furnace. Biden’s green energy agenda is crippling Americans.
Biden’s Misuse of War Powers
The Biden administration is using wartime authority to increase the manufacture of electric heating and cooling technology. That is, Biden is utilizing the Defense Production Act to mobilize the production of electric heat pumps. The Defense Production Act gives the president the authority to mobilize a certain industry to advance national security, which the administration believes should apply to manufacturing more “climate-friendly” energy. Of course, the Biden administration is discounting that fossil fuels still produce about 60 percent of the nation’s electricity since it wants to replace that electricity with wind and solar power that are both weather-driven and intermittent, requiring expensive back-up power. Much of the world market for wind and solar is dominated by China, as are the batteries made necessary by their intermittent performance.
To support the heat pump manufacturing industry, Biden’s Energy Department’s Office of Manufacturing and Energy Supply Chains (MESC), is providing $169 million to allow companies to construct factories to build heat pumps. The funds come from the Inflation Reduction Act — the Democrats’ climate, tax and health care law. The Defense Production Act allows the administration “to quickly deploy funding to be able to add or convert manufacturing capacity.” Currently, China produces 40 percent of the world’s heat pumps, making it the largest producer and exporter of heat pumps in the world, according to the International Energy Agency.
The Energy Department also plans to use the Defense Production Act to ramp up production of electric grid components, solar energy, insulation and hydrogen energy components, regardless of their cost and commercial viability.
Home Heating Costs This Winter
Heating homes this winter using natural gas is estimated to cut down energy costs by 43 percent compared to electricity. Natural gas is the main space heating fuel in 46 percent of U.S. homes, making it the most widely used residential heating fuel in the country. However, the share of U.S. homes that use electricity as a primary space heating fuel has grown to 42 percent from 38 percent 10 years ago as the Obama and Biden administrations and a number of states have made it difficult to transport natural gas to demand centers, forcing home owners into other fuels, including electricity.
In 2022, natural gas was 3.1 times cheaper than electricity for residential customers. The cost of residential electricity was $15.14 per million British thermal units (Btu), while residential natural gas costs were $4.86 per million Btu in 1982-1884 real dollars. That basic relationship in residential natural gas to residential electricity prices is expected to continue through 2050, according to EIA’s Annual Energy Outlook.
Biden Pushes an Electrification Agenda
The administration is already imposing several restrictions on the use of gas-powered appliances. Biden’s Energy Department announced new efficiency standards for residential gas furnaces, pool pumps, battery chargers, dehumidifiers, ceiling fans, incandescent light bulbs, and gas stoves that would severely curtail their use. To make the change more palatable, the Biden administration is offering rebates on the use of electric appliances in homes. The 2022 Inflation Reduction Act set aside $8.8 billion in rebates for home energy efficiency and electrification projects. As a result, everyday appliances that people need that will be available in the future will be more expensive but not better, making people’s lives worse and unnecessarily burdening American consumers. Many existing lines will be discontinued due to Biden’s proposed standards, despite consumers’ satisfaction with those products.
The American Gas Association estimates that households using natural gas for heating, drying clothes, and cooking save about $1,068 per annum on average compared to homes that use electricity for the same appliances. Because of steady improvements in building and appliance energy efficiency, and the positive impacts of gas utility energy efficiency program, the typical residential property cut consumption by half since 1970 even although homes have become bigger.
President Joe Biden has implemented policies to limit natural gas production ever since he assumed office back in 2021, including a moratorium on oil and natural gas leasing activities in the Arctic National Wildlife Refuge, imposing new taxes on gas extraction through the Inflation Reduction Act, and proposing revisions to the National Environmental Policy Act guidance which would make it harder to permit natural gas projects. In September, a bipartisan coalition of 25 governors committed to decarbonizing buildings across the United States, which they find imperative to reduce emissions and achieve U.S. climate targets. The U.S. Climate Alliance is calling for heat pump installations to quadruple by 2030, completely ignoring the critical shortage of HVAC technicians. Experts say as many as 110,000 technician jobs are unfilled, which will only exacerbate that shortage.
Conclusion
Biden is using war powers again to boost his climate agenda, this time in encouraging the manufacture of electric heat pumps. Despite natural gas furnaces being cheaper to heat homes this winter than electricity, the Biden administration wants new homes to be all electric, costing Americans more as electricity prices have increased 21 percent since Biden has become President. Currently, China is the world’s largest producer and exporter of heat pumps, which is not surprising as China dominates most technologies and minerals needed for Biden’s energy transition.
By pushing electric technologies, Biden is deciding what is best for American consumers, eliminating choice. Past history has shown that the government does not do well in picking technologies that consumers want. Nonetheless, Biden pushes on spending taxpayer dollars on his pet projects.
