In the United States, rising gasoline prices — currently averaging $3.40 per gallon, a dollar higher than a year ago — have been a drag on the approval ratings of President Biden, who is struggling to persuade Congress to pass climate policies aimed at reducing fossil-fuel emissions. At the same time, the Biden administration has defended moves to issue new oil and gas permits on public lands, although those efforts have been slowed by federal courts.
But high oil prices aren’t always bad news for clean energy. They can also depress oil demand by, for example, pushing people to buy electric vehicles that don’t require gasoline. Last year, electric cars made up 20 percent of all new sales in Europe and 15 percent of new sales in China, according to BloombergNEF, a research group.
A Gas Shortage Roils Europe
In recent months, the world has struggled with spiking prices for natural gas, a fuel used in both power plants and home heating, that has caused ripple effects across the globe. Utility bills have soared from Italy to South Korea, while fertilizer plants in Britain and Germany have had to curtail operations. (Natural gas is a key ingredient in nitrogen-based fertilizer).
The causes of the gas crunch are numerous: Global demand has rebounded faster than supply since the pandemic began; lower output from hydropower dams in China and Brazil have led to a surge of gas imports; a cold snap last spring across Europe increased demand and reduced gas inventories.
The crisis is particularly acute in Europe, where natural gas prices are now five times as high as they were a year ago. Officials are racing to procure new shipments of gas from overseas in case Russia, which provides one-third of Europe’s natural gas, curtails supplies in the event of a conflict over Ukraine.
There are also signs the gas crunch could undermine unity within the European Union over policies to fight climate change.
Officials are currently debating a sweeping new set of clean-energy measures aimed at cutting emissions by 2030. Some nations, like Spain, have called for a faster shift away from fossil fuels to reduce Europe’s exposure to gas markets. But others, like Poland, have urged a delay in stricter climate action amid the crisis.