An economic forecaster at West Virginia University said a variety of factors could unfold from the ongoing Russian invasion of Ukraine – ranging from the positive (a boost in U.S. energy production) to the negative (a potential recession down the road).
Brian Lego, research assistant professor in the WVU Bureau of Business and Economic Research, also cautioned that any economic fallout from a ban on Russian imports will likely hit consumers harder than the markets. Lego is available to discuss the economy and the energy economy surrounding the Russia-Ukraine war.
QUOTES AND COMMENTS
On increased global usage of natural gas
“(Sanctions on Russian imports) would benefit the natural gas industry. Russia is a major exporter of natural gas. And though we’re exiting the winter heating season, there are still expectations for the future. Shale production in the U.S. has gone up over the last several years and is shipped internationally. We could now be looking at more of an uptick in production of natural gas and other alternative energy sources.”
On shifting energy trends
“With the energy price spikes of 2007-2008, we started to see the idea of hybrid and electric vehicles really take off, as well as the availability of more efficient lighting systems and other consumer goods. Even concepts such as energy-efficient building design entered the discussion. The market is ripe for a greater adoption of those ideas more so now than 15 years ago as improved technology has lowered their costs over time.”
On a possible recession
“Negative energy supply shocks to the economy can push the country into recession. It could have broader impacts not only on the economy’s overall prospects but state budgets. That may not happen around the corner, but we need to identify it as a palpable risk going forward over the next six to 12 months. Long-term, if this drags out into a lengthy conflict, it could lead to even more severe outcomes for the economy.”
On consumer impact
“Impacts will surely be felt more by the consumer than market actors. Consider energy and gas consumption. When prices get really high, people can make drastic changes such as consolidating trips or skipping out on vacations. It causes turmoil with consumers and their discretionary spending. With the price of food and other staples also increasing, it gets harder when you have several things competing for the consumer budget pie.”
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