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Biden’s European Gas Promises Are Driving Up Prices in America

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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.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.