Some of the toughest increases are happening in energy costs. In December, gasoline prices were up roughly 50 percent from a year ago. And the price of natural gas nearly doubled in 2021, driving up heating costs and power bills.
As bad as things are, they could be worse. Energy prices in Europe have exploded, and European households are now paying 54 percent more for their electricity than two years ago—even with aggressive government assistance to reduce costs. Essentially, the pain felt across the Atlantic might be a preview for what’s coming in the U.S., if we don’t make an energy policy course correction.
Europe’s energy crisis can largely be attributed to a bungled approach to the renewable energy transition—with “decarbonization” goals overwhelming considerations for energy security and affordability. Well-operating coal and nuclear power plants have been closed across the continent, and at the same time investment in new natural gas production hasn’t kept pace with demand. Europe’s all-in pivot to renewable power—and away from a balanced, on-demand energy mix—has left it painfully vulnerable to spiking natural gas prices and Vladimir Putin’s willingness to sell Russian gas.
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