October 25, 2021

EEIA: Restrictive U.S. Energy Policies Driving Inflation

The Metals Service Center Institute is a proud member of the Energy Equipment and Infrastructure Alliance (EEIA), a coalition of companies and trade organizations that build, supply, maintain, operate, and benefit from U.S. energy infrastructure. EEIA works diligently to remind policymakers to consider the real-world impacts of their energy policies on the people they serve.

In a recent blog post, EEIA discussed why natural gas, oil, and coal are necessary components of our energy mix and will remain so for the foreseeable future. EEIA points out the rush to remove fossil fuels from the United States’ energy mix has created “a cost and reliability nightmare here in America, while yielding little offsetting benefits to earth’s climate.” In fact, the effort is having the opposite effect. Led by China, because of high prices and shortages of natural gas, power producers worldwide are scrambling to restart coal plants and shift flexible fuel units from gas back to coal and fuel oil. The Energy Information Administration recently projected that U.S. coal-fired electricity generation will rise by 22 percent in 2021 over 2020.

Meanwhile, as Connecting the Dots has reported, natural gas pipeline operators have cancelled major projects, put others on indefinite hold, and have not proposed new greenfield projects. Inflation also is a concern.

As EEIA explained, “Constrained fossil fuel production and transport capacity is feeding an already adverse inflation trend and adding to growing supply chain bottlenecks that are making some consumer and industrial products unavailable at any price.”

Fortunately, rising prices might be causing federal policymakers to rethink their opposition to natural gas and other important energy sources. With EEIA, MSCI is hopeful that this is the case, and will continue to advocate for an all-of-the-above energy policy that keeps prices in check for businesses and the families they serve.