Europe and the UK are experiencing a gas shortage that threatens to undermine its goals, and wide-spread support, for a zero-emissions future. It also leaves them more dependent on Russia. Energy operates in global markets, which means gas prices in the US are also on the rise. This may prove to be a blip, but the decision to cut back on domestic production of fossil fuels suggests higher prices will be here to stay. If prices continue to rise it may further accelerate inflation, just like a spike in energy prices did in the 1970s.
Source: https://fred.stlouisfed.org
Allison Schrager is a senior fellow at the Manhattan Institute. Follow her on Twitter here.
Interested in real economic insights? Want to stay ahead of the competition? Every Wednesday, e21 delivers a short email that includes e21 exclusive commentary and the latest market news and updates from around the Web. Sign up for the e21 Weekly eBrief.
Photo by Serge Cornu/iStock