Steven R. Miles & Anna Mikulska write in Forbes about the reason why natural gas prices are rising in Europe.
- European politicians have begun to blame American greed for high natural gas costs when it is the market structure that inflates costs.
- Under current European laws, American producers lose ownership of their product once it is unboarded on to a tanker and have no say on where it gets delivered.
- Middlemen distributors and traders, the majority of which are European, then markup natural gas prices before unloading it to European markets.
- While it is hard for European consumers to see immediate energy relief, Europe’s governments can provide it in the long term by building LNG terminals and agreeing to purchasing agreements with American producers.
“LNG from the US can be available at prices much cheaper than current European hub prices, but requires additional facilities that will take 3-4 years to build. The only available current alternative is going into the market to buy when the cupboard is bare. This means buying in the spot market, which thanks to the drop in supply from Russia, means paying high retail prices.”
Read the full article here.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
