Trump’s former Energy Secretary Dan Brouillette explains how the US can create global demand for more natural gas and oil.
Natural gas prices rose more than 20% on Monday after a wave of forecasts over the weekend. incoming arctic wind That could set the US up for the coldest January in a decade or more.
Although prices fell slightly the next day, the major rally in the market this winter is far from over.
The price of natural gas has surged this week following forecasts that the US and Europe could face a harsher winter than previously expected. (Silas Stein/Picture Alliance via Getty Images/Getty Images)
Phil Flynn, an energy markets analyst and fox business The contributor says the US has abundant supplies of natural gas, which is a good thing. In his view, the problem is that the US has been too lukewarm in terms of demand when it comes to cold weather, as the country hasn’t actually seen the kind of harsh winter that was being predicted in a long time.
He noted that predictions of a prolonged period of bitter cold will not only cause demand to increase and storage to decrease – possibly at the fastest pace we have ever seen – but also threatens to disrupt production.
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“When you get a cold event like this, not only do you see record demand, but then you also have the potential for infrastructure to freeze up,” Flynn said in an interview. “They have to shut down the wells because it’s too dangerous to produce.”
Ice-covered transfer lines leading to storage tanks at a liquefied natural gas (LNG) terminal. (Reuters/Gary Cameron/Reuters Photos)
This will not affect only America. Some forecasters say Europe can also expect a colder winter because of the polar vortex, and natural gas prices are already skyrocketing in that region as storage is being depleted faster than usual.
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At the same time, the Russian gas giant, Gazprom, is planned Stop all piped gas deliveries After the expiration of its five-year contract, it was shipped through Ukrainian pipelines to other European countries.
Flynn said this is another reason why President Biden’s freeze on liquefied natural gas (LNG) export permits is “absolutely ridiculous.”
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The market is reacting to all these factors. So what does this mean for the consumer?
Flynn says when the price natural gas As was the case this week, those increases typically take a few months to reach consumers, depending on what part of the country they live in and how their local utilities operate.
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Regardless, when temperatures drop, Americans living in areas affected by cold snaps can expect to see their bills rise almost immediately due to usage alone, as they turn up their thermostats and have their heaters running around the clock. Are.
“Consumers are feeling it, primarily because they are using more and prices are also going up,” Flynn told Fox Business. “It’s a double whammy.”
