National

Heating costs are going to rise over the next few months, potentially posing an additional burden this winter for low-income families.

Why it matters: Heating bills for Americans will likely pile up during the cold months amid soaring inflation and rising consumer prices. Low-income families may struggle to pay these higher costs and face hard choices as temperatures drop.

Locations like New England that rely heavily on heating oil to keep homes warm will especially see the burden of a higher bill.

By the numbers: The Department of Energy's Energy Information Administration forecasted that heating costs will spike this year.

Heating bills for those with natural gas will jump 28% ($931), according to the EIA.

Heating oil costs will rise by about 27% ($2,354).

Electricity costs will rise about 10% compared to last year ($1,359).

Any homes using propane will see a 5% increase ($1,668).

The Energy Department did not immediately respond to Axios' request for comment.

The big picture: Energy costs will likely be their highest in 15 years this winter, the National Energy Assistance Directors Association told Axios.

Costs are rising due to higher fuel prices and increased demand due to forecasts of a colder winter, the EIA said.

The war in Ukraine's impact on natural gas prices will be showing up in household heating bills this winter, too, Axios' Matt Phillips writes.

Heating costs impact for low-income families

It's "going to be a tough year" for low-income families, Mark Wolfe, executive director of NEADA, told Axios.

Low-income households will feel a heavy burden as they will fall behind on paying energy bills and have to make choices about rent, heat and food, Wolfe said.

"In reality — this is one large income transfer from the bottom of the income population to the top," he told Axios. "Low-income families are becoming impoverished."

Go deeper: The war in Ukraine is showing up in your heating bill

Winter's burden: The new heating prices for 2023

Costs are rising due to higher fuel prices and increased demand due to forecasts of a colder winter.

Illustration of a stack of frozen dollar bills with snowcaps.

Energy

Oil companies

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

Tel Aviv

Axios from Tel Aviv

Saudi Arabia privately pressed several Arab countries to issue statements supporting the recent OPEC+ decision to cut oil production, according to a former U.S. official and an Arab official.

Why it matters: The goal of the Saudi push was likely to avoid being isolated by the U.S. and show that the decision, which angered the Biden administration, was a collective decision by all Arab nations in OPEC+. 

The big picture: The Biden administration blames Saudi Arabia for the move, which the U.S. claims will strengthen Russia.

Saudi officials claim the U.S. anger has nothing to do with Russia but is due to domestic political concerns about rising gas prices ahead of the midterm elections.

Catch up quick: Two weeks ago, OPEC+ announced production cuts of 2 million barrels per day starting in November.

The U.S. lobbied OPEC+ members, mainly Saudi Arabia, to wait another month to evaluate the situation of the oil market before deciding on any cuts in production.

Saudi Arabia, which leads the OPEC+ group, disregarded U.S. requests and went ahead with the production cut.

The move created a crisis between the U.S. and Saudi Arabia, with the Biden administration announcing it was reviewing its relationship with Saudi Arabia and President Biden vowing to take action against the Saudis.

Background: OPEC, led by the cartel's dominant producer Saudi Arabia, began working with Russia and some allied producers on market management in the mid-2010s in response to the rise of U.S. shale production.

The group adjusts output targets based on macro conditions as it looks to protect revenues and market share and prop up prices. But like any multilateral group, its decisions can be political too. 

Saudi officials insist the most recent production cut is a response to market forces, citing forces weighing on global demand growth including tightening monetary policies and China's COVID lockdowns. 

But U.S. officials argue there was no firm market rationale and that the move provides aid to Russia. White House National Security Council spokesperson John Kirby said last week that the move would "increase Russian revenues and blunt the effectiveness of sanctions."

Behind the scenes: In an attempt to push back on U.S. accusations, Saudi officials in recent days approached Arab countries that are OPEC+ members and several Arab countries that are not, and asked for public statements of support.

An official from one of the Arab countries said the Saudi pressure was on a very high level and the Saudis pressed very hard.

A former U.S. official briefed on the issue said Saudi officials pressed Arab countries to echo their message that the OPEC+ decision was purely an economic one and based on market conditions and not political.

State of play: Iraq, Kuwait, Bahrain, the United Arab Emirates, Algeria, Oman, Sudan, Morocco and Egypt all issued statements stressing the decision was made in consensus and was technical, not political.

Jordan also issued a statement of support for Saudi Arabia but called for a direct dialogue between the U.S. and Saudi Arabia to solve the crisis.

What they're saying: A spokesperson for the Saudi Embassy in Washington declined to comment.

But the Saudi Embassy tweeted a statement on Monday stressing it views the relationship with the U.S. as strategic and that the OPEC+ decision was based on economics, not politics.

Axios' Ben Geman provided additional reporting to this story. 

Scoop: Saudis pressed Arab nations to publicly support OPEC+ cut

The Biden administration blames Saudi Arabia for the move, which the U.S. claims will strengthen Russia.

Secretary-General of OPEC Haitham al-Ghais (R) and Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman Al-Saud (2nd L) hold a press conference

Saudi Energy Minister Prince Abdulaziz bin Salmand (2nd from left), Secretary-General of OPEC Haitham al-Ghais (right) and other officials hold a press conference on Oct. 5. Photo: Askin Kiyagan/Anadolu Agency via Getty Images

OPEC

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

World

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Generate

Axios Generate

Qatar's energy minister sees his country supplying liquefied natural gas to Europe for decades, despite the EU's plans to pivot quickly to renewables in the wake of the Ukraine-related energy crisis.

Why it matters: This view confirms the anxiety among climate activists and some world leaders about locking in too much gas infrastructure.

Driving the news: European countries dependent on Russian gas to heat homes and power factories have been scrambling for alternative supplies and the infrastructure to receive them, and many are turning to tiny Qatar, a global gas powerhouse.

In a wide-ranging interview with Axios, Qatari Energy Minister Saad bin Sherida Al-Kaabi said Europe made a mistake in pushing to switch to renewable energy too quickly while remaining dependent on Russian gas supplies for baseload power.

Qatar and the U.S. rank as the world's top LNG suppliers, and Qatar will significantly increase its capacity when new facilities open in 2026.

Al-Kaabi met with energy secretary Jennifer Granholm and top Biden energy official Amos Hochstein on Thursday in Washington.

What they're saying: "Whether it's in the US and EU, in the Americas and Europe and Asia, gas is absolutely going to be needed for a very long time," Al-Kaabi said.

"So if they have other ideas in Europe and so on, well, if they materialize into something that's a reality, and that they can transform to something else, you know, good for them. But until then we'll be serving their markets."

What we're watching: Al-Kaabi said the global community is heading into the next round of UN climate talks in Egypt after a year of emissions backsliding. This is largely due to geopolitical developments including the uneven covid recovery and the war in Ukraine.

"Realistically, what are we gonna say in COP27?" Al-Kaabi said.

"Coal today is at its highest ever utilization in the history of humanity," he said, noting coal's high CO2 emissions compared to natural gas.

"I think we're in a very delicate situation that we have to be very careful" about pushing fossil fuels to the maximum without considering the climate consequences, he said.

"Global warming is a reality that we can't hide away from." He cited QatarEnergy, which he leads, for moving aggressively into solar, carbon capture and storage and blue ammonia projects.

The intrigue: He gave his own take on whether industrialized countries should set up a fund to compensate developing countries for the climate disasters they are already experiencing as a result of the developed world's emissions.

Qatar's official position on "loss and damage," as it is known in UN climate parlance, will be decided at the political level in his government, Al-Kaabi said.

Yes, but: The creation of a loss and damage fund will be a major point of contention at COP27 in Sharm El-Sheikh.

"I would not support putting a fund together or whatever they're trying to do to compensate [countries] because I think there are much bigger polluters than us that would not actually participate in doing it," he said.

Our thought bubble: This response illustrates the difficulty negotiators will have in coming away from COP27 with a tangible funding mechanism, given a perceived first-mover disadvantage.

Qatar's energy minister foreshadows COP27 fight

The issue of "loss and damage" will play an outsized role at COP27.

Photo illustration of Energy Minister for Qatar Saad Sherida al-Kaabi and an image of natural gas flames

Photo illustration: Annelise Capossela/Axios. Photo: Karim Jaafar/AFP via Getty Images

Fossil fuels

Climate change

Alternative energy

Sneak Peek

Axios Sneak Peek

President Biden has tried to convince the Saudis to pump more oil with honey. Now he's trying vinegar. 

Why it matters: With a new warning that the White House might support legislation targeting OPEC+ in Congress, Biden crossed a symbolic threshold — and sent a clear signal to the Saudis that he’s prepared to escalate. 

For some Democrats, he needs to go further: "President Biden ... should call the King himself," Rep. Ro Khanna (D-Calif.) told Axios. "He should say you have five days to reverse your decision. If not, I am going to work with Congress to pass a ban on supplying air parts to your Air Force.

"The American people have had enough. We will not be bullied by a third-rate power that is committing human rights atrocities."

Between the lines: Biden is now at odds with the two entities — Big Oil companies and Big Oil countries — that have the power to solve his most pressing domestic political problem: rising prices at the pump. 

Biden has consistently blamed oil and gas companies for high prices and used a visit to FEMA headquarters last week to revive his warning: "Do not — do not — do not use this storm [Hurricane Ian] as an excuse to raise gasoline prices or gouge the American public," he said. 

Driving the news: Administration officials were scrambling over the weekend with a last-minute lobbying effort to dissuade OPEC+ from lowering its production targets, reportedly describing the prospect as a "total disaster."

That effort failed and OPEC+ on Wednesday announced its 2 million barrels a day cut, scheduled for next month. 

The White House fired back with a double-barreled shot from Jake Sullivan, the national security adviser, and Brian Deese, the director of the National Economic Council. 

Their joint statement was designed to suggest the White House would reverse course and support bipartisan legislation — so-called NOPEC — that would make the oil-producing cartel legally liable for any price collusion.  

Behind the scenes: While some Democrats privately suspect Saudi Crown Prince Mohammed bin Salman of engineering the cut to hurt their party in November, White House officials don’t go as far.  

Two of Biden's most senior advisers were in Saudi Arabia just 10 days ago, in part to deal with potential oil cuts and energy security.

Many officials thought the trip had managed to open a new page with the Saudis, Axios' Barak Ravid notes.

What they're saying: Khalid Aljabri, a Saudi dissident, made a direct link between OPEC's move and the midterms. "This unprecedented cut is nothing short of a naked assault on democracy and election interference to harm Biden and the Democrats," he alleged.

"I think it’s time for a wholesale re-evaluation of the U.S. alliance with Saudi Arabia," Sen. Chris Murphy (D-Conn.), a top critic of the Saudis, told CNBC on Tuesday.

The intrigue: The White House has other cards to play. But all of them are controversial.

A potential nuclear deal with Iran could bring more than a million barrels of oil a day onto international markets. 

The White House hinted Wednesday they reserve the right to release more oil from the Strategic Petroleum Reserve — beyond the 10 million barrels in the November release it has already announced. Republicans will howl, but the president's authority is clear. 

The Biden administration can also turn to Venezuela. The Wall Street Journal scooped Wednesday evening that Biden is preparing to scale down sanctions on the Maduro regime to allow Chevron to resume its activities.

The other side: Republicans are already using OPEC's cut to criticize Biden.

"Joe Biden caused this crisis with his destructive energy policies and foreign policies. I'm deeply disappointed by the Saudi decision and wish they would act more like an ally during current conditions, but this is Joe Biden's fault," Sen. Ted Cruz (R-Texas) told Axios.

Go deeper: What OPEC's 2 million-barrel cut could mean for U.S. gas prices

Biden's new Saudi strategy

Biden sent a clear signal to the Saudis that he’s prepared to escalate after OPEC's production cut.

President Biden fist-bumps with Saudi Crown Prince Mohammed bin Salman on July 15. Photo: Royal Court of Saudi Arabia/Handout/Anadolu Agency via Getty Images

Saudi Arabia

Shell CEO Ben van Beurden will step down at year's end after nine years that included new climate initiatives and weathering the shock of the COVID pandemic.

Why it matters: Wael Sawan, currently head of Shell's integrated gas, renewables and energy solutions unit, will replace van Beurden as CEO of one of the world's most powerful energy companies.

Alongside other European-based giants, Shell is diversifying into more climate-friendly business lines like EV charging and offshore wind, but also facing criticism that it's moving too slowly.

Catch up fast: Van Beurden became CEO in early 2014 and has been with the company for almost 40 years.

"The first big move of his tenure as CEO...was the takeover of rival BG Group Plc, a deal valued at close to $50 billion that tested the company’s finances during an oil price slump, but is now paying off as natural gas prices soar," Bloomberg notes.

What we're watching: Follow This, a climate-focused shareholder advocacy group, offered a mix of praise and criticism of van Beurden as it signaled upcoming pressure campaigns on the new boss.

Oil majors are hauling in huge profits amid high commodity costs, while demand looks set to remain robust for the foreseeable future. 

But Follow This warns that Sawan "has to make bold decisions to explore new business models instead of new oil and gas. If he fails to deliver deep emissions cuts, he puts the company at great financial risk."

Yes, but: Per the Financial Times, RBC Capital Markets analyst Biraj Borkhataria does not expect a major change in the company's posture with van Beurden's departure.

“The shift is likely to be more of a continuation than revolution of the strategy put in place by van Beurden," Borkhataria said.

Sawan's elevation was "well anticipated," JPMorgan Chase & Co. analyst Christyan Malek said in a note reported by Bloomberg. “We expect him to maintain Shell’s pragmatic and holistic approach to the energy transition," Malek said.

Shell taps new CEO amid transition push

Sawan will replace Ben van Beurden as CEO of one of the world's most powerful energy companies.

Illustration of sea binoculars made from a Shell logo 

Big Oil

West Texas Intermediate crude oil futures

Data: Yahoo Finance; Chart: Skye Witley/Axios

The White House is more than happy to point out gasoline prices have been falling for over two months. But Democrats aren't out of the political woods on energy costs.

The big picture: Crude prices — the biggest variable in gas prices — have regained ground over the last couple of weeks after falling steeply in recent months.

WTI, the U.S. benchmark, is trading in the mid-$94 range this morning.

GasBuddy analyst Patrick De Haan tells Axios that if the oil price drop is over, for now, average U.S. prices should level out around $3.69 per gallon or maybe somewhat lower.

That's way below the $5 average reached in mid-June, but still fairly steep by historical standards. 

Threat level: Gasoline prices are the most visible energy cost but hardly the only one. Axios' Matt Phillips reports that Europe's natural gas crisis is spilling into the U.S. market.

U.S. natural gas prices briefly hurdled $10 per million British thermal units (BTUs) on Tuesday, the highest since 2008. They are up more than 150% this year. 

Why it matters: U.S. prices are nowhere near European levels, but they'll still almost certainly push electric and heating bills higher. 

So keep an eye on the political impact of heating bills heading into the fall and winter, which could reinvigorate voter angst about rising costs of living, despite progress elsewhere on inflation.=

The intrigue: Getting back to gasoline, Bloomberg has a good story on the politics as prices have come down under $4 per gallon (currently $3.88 per AAA).

The decline blunts a key political weapon for Republicans, the piece points out, but also quotes analysts saying gas prices are still a factor — especially if they go back up.

What we're watching: Oil prices got a lift this week after the Saudi energy minister floated the idea that OPEC+ could cut production.

It's just tea leaves, but that could suggest the cartel hopes current prices are something of a floor. Whether and when European efforts to isolate Vladimir Putin start taking a significant bite out of Russian supplies is another variable.

Democrats aren't out of the woods yet on energy prices

Higher natural gas prices will reach consumers.

The Department of the Interior proposed Friday a new five-year plan to narrow the area for offshore drilling lease sales to the Gulf of Mexico and Alaska's Cook Inlet. 

Why it matters: The plan, which rules out drilling on the East and West Coast, is a significant cutback on a Trump-era target that pushed for a broader range of offshore drilling opportunities.

Details: The Biden administration is proposing up to 10 oil and gas lease sales in the Gulf of Mexico and one in the northern portion of Cook Inlet over the next five years. Both areas have "existing production and infrastructure," according to the Interior.

The final program "may include fewer potential lease sales, including no lease sales," the Interior noted in a release Friday.

What they're saying: Friday's announcement "removes from consideration the federal waters off the Atlantic and Pacific coasts while inviting public comment on 10 potential sales in the Gulf of Mexico and one in the Cook Inlet off south-central Alaska," Secretary of the Interior Deb Haaland said in a statement. 

"From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy. Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing."

Evergreen Action, a climate change advocacy group, called the draft plan encouraging but called for the administration to stop all new offshore sales. 

"[A]ny new leasing would be incompatible with the science, with President Biden’s climate and environmental justice commitments, and with an economy that supports American consumers with cheaper clean energy," Evergreen Action chief of staff Lena Moffitt said in a statement. 

"It’s time we say no to more giveaways to fossil fuel corporations and end any new offshore oil and gas leasing."

The American Petroleum Institute (API) released a statement criticizing the fact that the proposal "leaves open the possibility of no new offshore lease sales."

"Because of their failure to act, the U.S. is now in the unprecedented position of having a substantial gap between programs for the first time since this process began in the early 1980s, leaving U.S. producers at a significant disadvantage on the global stage and putting our economic and national security at risk," said API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola.

What's next: Following a 90-day period for public comment, the Bureau of Ocean Energy Management will put together a proposal for the final program for the secretary to review and approve within a minimum of 60 days.

Go deeper: What's next for Biden's freeze on new oil drilling leases

Interior proposes offshore drilling plan that would allow up to 11 lease sales

The five-year plan would narrow the area for leases to the Gulf of Mexico and Alaska's Cook Inlet.

Interior Secretary Deb Haaland testifies before the Senate Energy and Natural Resources Committee at the Dirksen Senate Office Building on May 19, 2022 in Washington, D.C. Photo: Kevin Dietsch via Getty Images

Offshore drilling

The geopolitical fallout from Russia's unprovoked invasion of Ukraine is on display at the ongoing G7 meeting in Germany, where climate change is a key topic of conversation Monday.

State of play: In the bucolic Bavarian Alps, world leaders are wrestling with how to alleviate short-term worries about securing adequate energy supplies and lowering energy prices without tanking efforts to limit the severity of climate change.

There is a tug of war between how much G7 nations will emphasize burning more fossil fuels in the short-term with the transition to clean energy in the long run.

This stands in stark contrast to last year's G7 meeting in Cornwall, England, where climate change was a top priority heading into the Glasgow Climate Summit.

The question then was how far and fast some of the world's biggest emitters would go to slash emissions. Now these questions have taken on more of an "if" quality to them.

Why it matters: With the price of oil, gasoline and natural gas at painful levels in Europe and the U.S., the balance that leaders strike will help determine whether the Paris Agreement's targets are met.

Zoom in: Germany, which is hosting the G7 and is the most reliant on Russian energy imports, is reportedly seeking to delay a phaseout on funding overseas fossil fuel projects.

The U.S. is facing record-high gasoline prices, which is an albatross for President Biden and the Democrats heading into the midterm elections. Biden has called for oil companies to boost their domestic production and refining output. 

Germany has announced the restart of some of its shuttered coal-fired power plants, which use the most carbon-intensive fuel source, in order to help build up natural gas stocks for next winter. Other European countries are making similar moves.

The big picture: The U.S. and nations in the Middle East and possibly Africa are taking on new importance as natural gas exporters to Europe, with several new terminals for liquified natural gas already approved for the continent.

U.S. LNG exports to Europe have nearly tripled since March, according to a joint statement Monday from Biden and European Commission President Ursula von der Leyen.

Climate activists and scientists have warned that building infrastructure that could be used for the next few decades could lock in enough emissions to nullify the Paris targets.

Yes, but: The imperative of providing relief from high energy prices now may cause the G7 to back away from implementing some of its most recent climate commitments.

These include the curtailment in overseas fossil fuel funding, an "eventual" coal phaseout as well as a push to generate electricity from a grid that is "predominantly decarbonized" by 2035.

Fatih Birol, the head of the International Energy Agency, is participating in today's G7 meetings and urging countries to take steps aligned with a transition to clean energy, per IEA.

A potential price cap on Russian oil, which is also being discussed, might allow Europe to import Russian oil but at a predetermined, artificially low price. Proponents say this could lower gasoline prices while also reducing oil revenue going to Putin's regime.

But it could also boost demand for gasoline, leading to more fossil fuel consumption and higher emissions.

What they're saying: "We’re in a moment of massive disruption due to the invasion, and that’s either a big risk or it’s a big opening on the climate," Jennifer Morgan, Germany's ambassador at large for climate change, told the NYT.

What we're watching: How the G7 communique threads the needle between short and long-term priorities.

G7 leaders stare down energy and climate tug of war

Short-term pressures to cut energy costs may yield a less climate friendly G7 outcome.

Illustration of a tug of war rope looped around a piece of coal with hands pulling on either end.

Group of 7 (G7)

G7 leaders pose for a picture at a working dinner.

The Biden administration needs gas prices to come down fast. But that could require supporting greater oil and gas production over the long term — the opposite of what it wants to do to fight climate change.

Why it matters: The result so far has been mixed messages and rising tensions with the energy industry, whose help the White House needs to bring gas prices down.

The relationship between the industry and the White House has real world ramifications, since when it is contentious and frayed, it can be harder to bring relief at the pump.

And for consumers, gas prices will likely stay high for the foreseeable future, despite a proposed gas tax holiday.

The big picture: The Biden administration has asked the oil industry to boost production and refinery output in the near term, while the White House remains committed to shifting away from fossil fuels over the long term to reduce the severity of climate change.

"We can deal with this immediate crisis of high gas prices and still seize the clean energy future," Biden said Wednesday.

To oil industry officials, this doesn't signal any willingness to put in place policies that would encourage companies to spend money on new drilling or refining capacity — which is what they say it will take to increase supply enough to bring prices down.

The industry has not been subtle about its asks: More drilling permits on public lands, pipeline approvals, and taking other steps — while refraining from certain regulatory moves, to encourage putting more money into energy infrastructure. 

Bob McNally, founder and president of Rapidan Energy, said the White House's view is that "I need more oil right now. I need more refining capacity right now," without "blessing new, long-term infrastructure" due to the need to move toward clean energy sources. 

"That's where the disconnect comes in," he told Axios in an interview.

Zoom in: In addition, the industry is skittish about spending money now to pump more oil, given the stress of recent boom-bust cycles. It wasn't that long ago that oil prices plunged during the first coronavirus lockdowns.

"When the industry sees oil prices go up like a moonshot," McNally said, "the next thing they think of is the other side" — the next steep drop in prices.

Last week, Biden sent a letter to CEOs of the largest oil refiners in the U.S., urging them to produce more gasoline. However, most refineries are already operating at or near maximum capacity. Energy Secretary Jennifer Granholm is slated to meet with these CEOs on Thursday. 

The intrigue: The industry is locked in a war of words with the White House, which has been on full display this week. The friction was apparent, for example, in Chevron CEO Mike Wirth's written response to Biden's letter to refiners.

"Addressing this situation requires thoughtful action and a willingness to work together, not political rhetoric," Wirth wrote.

McNally says the Biden administration doesn't seem to understand that the oil industry can't turn on the spigot one day, and off the next, given the timelines, capital investment, and supply chain issues involved. 

Why Biden is stuck on gas prices

Its conflicting goals are resulting in mixed messages and rising tensions with the energy industry.

Oil companies

The big picture

Biden warns Big Oil over gas output

Biden White House jammed on gas prices

Exxon suspended from carbon tax group in wake of leaked video scandal

House Oversight panel demands interview with top Exxon lobbyist over climate

Exxon lobbyists' unfiltered climate remarks caught on video by Greenpeace

Study: Climate lawsuits aren't relying on the latest science

All Oil companies stories