President Joe Biden talks with German Chancellor Olaf Scholz in the Green Room of the White House, Monday, February 7, 2022, after participating in a joint press conference. (Official White House Photo by Adam Schultz)
Joe Biden has promised European countries that America will fill in lost gas supplies banned by Russian sanctions by shipping LNG across the Atlantic. That promise has driven up demand for American gas, and prices with it. Ryan Dezember reports in the Wall Street Journal:
The U.S. is shipping more natural gas than ever overseas, which is keeping domestic inventories lean and power prices high.
Natural-gas prices usually decline into spring, when heating demand drops but before air-conditioning season begins. Gas producers and traders use the off-season to build up inventory for summer, socking away fuel in storage facilities until the weather turns and demand and prices rise.
This year prices climbed into spring, thanks to record export volumes and promises from the White House to support the shipment of even more liquefied natural gas, or LNG, to allies across the Atlantic to supplant Russian supply.
U.S. natural gas futures for April delivery ended Tuesday at $5.336 per million British thermal units, more than double the price a year ago. So far in 2022, natural-gas prices have risen 43%. The last time there was such a sharp run-up to start a year was in 2008, when energy prices surged ahead of the financial crisis. A deep recession and the shale-drilling boom’s bounty of fuel kept prices depressed for more than a decade after.
War in Europe is driving the recent rise, along with weather events last year that drained gas stockpiles around the world. Also, U.S. producers have been wary of torpedoing prices and sinking their profitability by drilling too much. The amount of gas in storage in the lower 48 states is 17% below the five-year average for this time of year despite production that has eclipsed pre-pandemic highs, according to the Energy Information Administration.
No wonder Biden has pulled a U-turn on drilling on federal lands. He needs more gas to send overseas to the Europeans. But what about Americans paying more for heat and electricity (remember, natural gas is used to produce much of America’s electricity today). For them, inflation is only going to get worse. Americans know who to blame though.
Action Line: It’s always helpful to have an alternative way to heat your home. Your Survival Guy prefers firewood, stacked and seasoned properly, of course. Stick with me. Click here to subscribe to my free monthly Survive & Thrive letter, and let’s get through this together.
