Earlier this week, US natural gas prices hit just over $8 per million British thermal units, their highest level since 2008, at the time of the shale boom. That price was down a bit on Thursday, but still about double what it was this time last year.

This is because many Western countries stopped buying oil and gas from Russia after its invasion of Ukraine. The boycott has eliminated some of the supply, driving up prices, and the United States is sending record amounts of liquefied natural gas overseas.

Some wonder whether the United States should retain more of the LNG it exports to reduce energy costs at home.

Liquefied natural gas producers in the United States want to take advantage of higher prices, said Trey Cowan of the Institute for Energy Economics and Financial Analysis.

“You have more bidders for the commodity – in this case, LNG – you have more bidders for it, and that drives the price up,” Cowan said.

And it also drives up the price of natural gas in the United States. Natural gas isn’t quite a global commodity like oil is, but increasingly we’re finding that international prices affect what we pay here.

Anna Mikulska from Rice University said that we don’t just send liquefied gas overseas.

“Everyone keeps thinking about LNG exports, but we actually export a lot of gas by pipeline, mostly to Mexico,” she said.

These export contracts are often staggered over 20 years, so beyond a natural disaster, it is difficult for a natural gas producer to stop exporting and keep more gas at home to bring the price down. .

A big part of the problem is that supply is not reacting to oil at $100 a barrel as it has in the past.

And investors are more focused on short-term returns, said CFRA equity analyst Stewart Glickman. Other factors prevent oil companies from rapidly increasing production.

“Hose is more expensive and harder to find,” Glickman said. “Steel is more expensive. Labor is more difficult to find.

Beyond supply constraints, demand is now also different. In the past, American power plants were often switch to burning coal when the price of natural gas hit about $3.50.

Robert Johnston, principal investigator at Columbia University, said that’s not happening these days for two reasons.

“The first is that we have closed a good number of coal-fired power plants. The other is that coal is also scarce and expensive. So the economics of switching from gas to coal hasn’t been as good either,” Johnston said.

That’s beside the environmental concerns of burning coal, as well.

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