Despite claims electrifying the home saves money, natural gas is cheaper, DOE data shows

The newest Energy Department figures are throwing water on the Biden-Harris administration’s campaign to electrify the American home. Despite claims that transitioning home appliances from natural gas to electric will save consumers money, agency data shows electricity costs 3.5 times more than natural gas – and that’s been the case since at least 2011. 

In 2022, the administration held an “electrification summit.” Energy Secretary Jennifer Granholm gave a speech claiming that electrification would reduce carbon emissions and lower energy costs. 

The administration’s electrification campaign is backed up by anti-fossil fuel groups, such as Rewiring America. Camila Thorndike, climate engagement director for the Kamala Harris presidential campaign, worked for Rewiring America for two years before she joined the campaign. Thorndike recently became embroiled in a controversy when she attempted to clarify Harris’ position on fracking, only to make the Democratic candidate’s position seem all the more opaque. 

Another anti-fossil fuel nonprofit, the Rocky Mountain Institute, produced a report in 2018 claiming that “electrification of space and water heating and air conditioning reduces the homeowner’s costs over the lifetime of the appliances when compared with performing the same functions with fossil fuels.”

The effort has a lot of wealthy people to push this upon consumers. The Rocky Mountain Institute brought in $164 million in 2022. Billionaire and former New York Mayor Michael Bloomberg has donated $1 billion of his own money toward an aggressive movement to block consumers from accessing coal and natural gas.

The Sierra Club, which partners with Bloomberg Philanthropies for the campaign, kept a running list from 2022 to 2023 of California communities whose governments were prohibiting natural gas in new construction, starting with Berkeley, California, in July 2019. The list hasn’t been updated since April of 2023, most likely because the U.S. Court of Appeals for the Ninth Circuit killed Berkeley’s ban, which effectively called into question any such bans. 

Heating costs

That was good news for ratepayers. According to energy watchdog Robert Bryce, under the Energy Policy and Conservation Act of 1975, the DOE is required to publish annually the average costs of five residential energy sources, which includes natural gas and electricity. Bryce has reported for years that the DOE’s data consistently show electricity is more expensive than natural gas.

According to the DOE’s latest figures, residential consumers using electricity to heat their homes this year will pay about $46 per million British thermal units (btu), a measure of the heat content of energy sources. Natural gas users will spend $14 per million btus. Other fossil fuels are also cheaper – heating oil, propane and kerosene – though each costs more than double natural gas. 

The natural gas industry was quick to advertise the findings. 

“Today’s report by DOE underscores the important role that natural gas plays in ensuring households have access to affordable energy. Low-cost natural gas means America’s families can make the choices they need to save money on their utility bills,” American Gas Association President and CEO Karen Harbert said in a statement. 

The low cost of natural gas is partly due to fracking, also known as hydraulic fracturing, which is a well completion technology that allows oil and gas producers to extract fossil fuels from previously inaccessible rock formations underground. The technology has allowed the U.S. to more than double the amount of natural gas it produces. 

The rapid buildout of wind and solar may also be contributing to the inflation of electricity prices. Though the technologies produce cheap electricity when the wind is blowing or the sun is shining, they are intermittent. Creating a reliable flow of electricity from generators that shut down, often at random, is very expensive. 

Winter outlook

The DOE’s findings, however, are nothing new, Bryce reports. In 2023, the average American household paid $46.19 per million btus for electricity, compared with $13.97 per million btus for natural gas, meaning electricity was 3.3 higher than gas. In 2011, electricity costs were $34.14 per million btus, compared with natural gas costs of $11.01 per million btus. 

Earlier this month, the Energy Information Administration released its “Winter Fuels Outlook” report, which forecasts residential energy consumption, prices and expenditures for the coming winter season for the four most common residential space heating fuels: natural gas, electricity, propane and heating oil.

How much consumers will spend to heat their homes this winter depends on how the weather shakes out, in which region they live and what energy source they use. 

If winter turns out to be 10% colder than last year, residential heating with natural gas in the northeast – the most expensive region – will cost on average $827 this year. The average U.S. household will pay $637 to heat with natural gas on the 10% colder scenario. 

For homes in the northeast heating with electricity, they will pay on average $1,456 this winter if the weather is 10% colder, or $1,344 if the weather is 10% warmer than last year. The average U.S. home will pay $1,095 more to heat their home with electricity if the winter is 10% colder, and $1,025 if the winter is 10% warmer than last year.

While anti-fossil fuel groups really want people to stop using natural gas and other fossil fuels to heat their homes, it’s going to be a tough sell at a time when polls are showing people are far more concerned with their finances, whereas climate change ranks pretty far down on the list of concerns.