RE: Buy Back14 May 2023 12:37
The rapid expansion and recent relative stability of America’s swash-buckling shale gas industry. The US produced 975 billion cubic metres of gas in 2022 – 23pc more than Russia and three times more than Iran, the second- and third-largest producers in the world.
As such, US wholesale energy costs have remained largely flat since Putin made his move last February, despite turmoil hitting energy markets elsewhere. Western Europe, previously reliant on Russia for 40pc of its gas, has indeed seen a scramble for energy that sent wholesale prices soaring as countries rushed to secure and store gas supplies.
US industrialists have made good use of the resulting price differential, loading liquified natural gas onto giant ships and sending it east. America’s LNG exports to Europe rocketed 141pc last year, with the UK, France, Spain and the Netherlands accounting for two thirds of all US gas sold abroad.
Until relatively recently, US energy exports were illegal, blocked by legislation rushed in during the oil price shocks of the early 1970s. But over the last few years, and particularly during 2022, as export rules have eased. As a result the US has come from nowhere to overtake Qatar, Russia and Australia and become the world’s largest LNG exporter.
Whatever the rights and wrongs of this war in Ukraine, it has been a major opportunity for America’s LNG industry and the broader US energy complex. Back
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COMMENT
Inflation is falling – enjoy it while it lasts
Energy prices are far from tamed, and Britain is more vulnerable than most
LIAM HALLIGAN
14 May 2023 • 6:00am
Liam Halligan
The economic fallout from the war in Ukraine has hit Europe far harder than the United States. This is an obvious, yet rarely remarked upon fact.
While the US economy will expand by a relatively buoyant 1.6pc this year, on the latest International Monetary Fund estimates, eurozone GDP is set to grow at just half that rate. Germany, the region’s powerhouse, will fall into recession, says the IMF, as will the UK – with both economies set to shrink during 2023.
I’m not a huge fan of IMF estimates, particularly when it comes to Britain. Of the last 28 UK growth forecasts produced by the Washington-based global economic watchdog over recent years, 25 have turned out to be too pessimistic.
But the IMF is surely right to observe that while the US is coping quite well with the fall-out from Russia’s invasion of Ukraine in February 2022, Western Europe remains for the most part in the economic doldrums.
A major reason is that in this part of the world, despite falls in wholesale energy prices over recent months, households and companies are still shouldering far higher energy costs than in the US. And that seems set to continue.
UK price pressures are about to ease with the Bank of England last week suggesting that headline inflation, as measured by the consumer price index, could now fall from 10.1pc to around 5pc by autum
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