Europe is desperate for new natural gas sources as the Kremlin squeezes deliveries from Russian fields. But a US promise to plug the supply gap is threatening a domestic backlash.
The US wholesale gas market is likely to average $9 a million British thermal units for the remainder of the year, the Energy Information Administration forecast on Wednesday. The price is a fraction of the gas price in Europe, giving traders huge financial incentives to send fleets of liquefied natural gas tankers overseas. The US recently eclipsed Australia and Qatar as the world’s largest LNG exporter.
But $9 is still triple the average US gas price of the past decade, and thus holds the potential to drive sharp increases in home heating and electricity prices at a time when inflation is close to 40-year highs.