The Russian embargo of natural gas to Europe has sparked a spiraling in the price of fuel on the continent. Natural gas on the European market is currently more than $60 per MMBTU (Metric Million British Thermal Unit). "Historically in the United States, gas is trading for 3-to-5 dollars per MMBTU," says Dr. Greg Upton of the LSU Center for Energy Studies. "Today it's more like nine dollars per MMBTU. That's almost seven times of what fuel is traded for in the United States that is being traded for in Europe right now."
Upton says there is a direct connection between natural gas and the price of electricity. "Natural gas really is the marginal fuel that determines the price of electricity," Upton says. "So that's been leading to the increases in the price of electricity not just in Europe but here in the United States because natural gas is a globally traded commodity for which we export to Europe."
According to Upton, Louisiana natural gas producers are on the verge of a boom in prices and an enormous jump in demand for the fuel.
However, on the opposite end is the consumer of electricity and gas watching the price spiral upward.
"This entire Russia-Ukraine conflict has led to increases in the natural gas prices, which has impacted consumers through electricity prices. And unfortunately the news from this last week has kind of further exacerbated those prices that we're seeing."
Unfortunately there really isn't anything we can do to control the price of electricity. Entergy is already driving up prices due to costs at the clunky, problem plagued Grand Gulf Nuclear Station and now, it's being forced to up the price of megawatts to pay for natural gas to run their power plants.
"It’s a difficult thing for companies to deal with," Upton explains. "Entergy and other utilities around the country are really struggling with how to balance meeting that load and the cost that's being pushed onto consumers."