Sunday, January 30, 2022

Oil and gas

Many news reports state that Germany is one of our best allies in Europe but there are some who question that. Germany has high import taxes on US products while the US is the opposite, for example, US cars going to Germany are charged a 10% import fee while German cars coming to the US face a 2% import fee. Germany closed down its nuclear power plants and are now deeply dependent on Russian natural gas. They could import natural gas from the US but chose to allow Russia a new pipeline which by passed Ukraine and put Ukraine in a vulnerable position. Now that Russia is threatening Ukraine the Germans cannot do much about it. What does this mean for the German consumer? For existing customers electric and natural gas rates will increase by 63% this winter and new homes will pay 105% more. Meanwhile the US is producing less oil and natural gas causing prices to rise in the US about 30% this winter. Last year the US was energy independent but this year the US is importing oil from Russia. The result is gasoline prices have risen 50% in the past year. The US should open the spigots on oil and natural gas and bring down the world price of oil which has risen from $40 per barrel to $80 per barrel. This brings in an extra $320 million dollars per day to Russia whose GDP is 60% oil and gas exports.

No comments:

Post a Comment