Since Biden was elected president with his declaration of war against fossil fuel production, the oil price has spiked from $60 a barrel to above $100 a barrel, an increase of about 70%. Gas prices at the pump have surged nationally at a similar pace, from $2.59 a gallon under Trump to about $4.59 a gallon last week. But don’t fret because the Biden White House is “doing everything we can to bring gas prices down.”
But another energy crisis may be brewing, and that is a result of the surge of natural gas prices. (Don’t forget, natural gas is by far the number one source for electric power generation in America.) Here at home, those prices have climbed from less than $3 per MMBtu in 2020 to $7.40 as of last week. (See chart.) This is close to a 150% increase in price.
James Grant from the Interest Rate Observer warns that the price may double or triple in the months ahead. Why? Because the overseas price of natural gas is closer to $30 per MMBtu – versus less than $8 here. To arbitrage, this price differential, American and Canadian energy companies are expected to increase exports of liquefied natural gas – which would mean lower prices abroad and higher energy prices here. Grant reports that a big spike in the domestic natural gas prices could be “the next black swan event” and the soaring energy costs could trigger a recession.
Aren’t you thrilled that Energy Secretary Jennifer Granholm is on the job to prevent this calamity from happening?