Winter is coming---literally and figuratively. As Europe faces a growing energy crisis brought on by European Union nations' over-reliance on Russian oil and gas combined with 'green' policies that have limited or ended fossil fuel energy production, the effects will likely be felt here in the United States. "I think we're at severe risk of higher prices, if we get a cold winter," says Phil Flynn, energy market analyst with the Price Futures Group.
EU leaders met last week to discuss how to stave off this potential energy catastrophe, including imposing an emergency price cap on natural gas, or pooling resources between countries. "Make no mistake about it...if winter is cold, (European nations) are not going to have enough energy to get through," says Flynn. "And that puts more power in the hands of Vladimir Putin."
While many leaders in Europe (and some in the U.S.) have called for a price cap on Russian energy, Flynn warns that is not the answer. "If they try to cap the price of oil and gas, Russia will cut off supplies and that will leave Europe even more short," he tells KTRH. "So it's a dangerous game, and right now Russia is holding all the cards."
"Price caps simply wont work," he continues. "Even if the whole world went along, it would only be a short-term measure, because ultimately it would discourage investment and discourage more supply, leading to shortages."
Meanwhile, here in the U.S. we have growing energy supply problems of our own, exacerbated by the European crisis. "We're sending (our energy) all to Europe, because there's a shortage there and they're willing to pay up," says Flynn. "But when you do that, it drives up prices here in the United States."
Americans are already paying higher prices, thanks to Biden 'Green New Deal' policies. But Flynn warns the worst may be to come. "At this point, the only thing that could cool these prices off is a warm winter," he says. "If we get a cold winter, you could be talking 50 to 75-percent higher prices than a year ago...and that's pretty scary stuff."