Fallout from the Russian war in Ukraine roiling global energy markets and a cold front across large swaths of the U.S. pushed gas prices to a 13-year high, with futures breaking above $8 on Monday for the first time since 2008, double the price since the first of the year. Unseasonably cold temperatures increased gas demand in the U.S. at a time in the year when demand for gas typically begins to wane. At the same time, sanctions on Russian gas constricted global supply, with European and Asian markets competing for liquified methane gas exports.
High gas prices harm vulnerable people and the climate. In the immediate term, high prices exacerbate the energy burden on low income households in the U.S. and around the world already struggling with inflation. Pakistan is cutting electricity due to fuel shortages as it struggles to afford coal and gas from overseas. The soaring gas market is reversing the trend in which gas undercuts coal, encouraging record coal output in China and elsewhere. On Tuesday, Treasury Secretary Janet Yellen will convene the heads of the World Bank, IMF, and ministers from the G7 and G20 countries, in an effort to stave off a food security crisis that could be exacerbated, in part, by high gas prices that threaten the supply of nitrogenous fertilizer, of which gas is a key ingredient.
Finally, U.S. gas producers are moving to start production on the thousands of stockpiled undeveloped leases, bidding on new leases the Biden administration recently made available, and pushing to accelerate construction of new gas export terminals. Increased fossil fuel production will lock in CO2 and methane emissions for decades to come, at a time when scientists have warned that failing to break free from fossil fuels will result in “an unlivable world.” (CNBC, Bloomberg, Houston Chronicle, Wall Street Journal $, E&E $, Marketwatch, OilPrice.com; Impacts: Bloomberg, Bloomberg, Reuters, Reuters)