gas markets have been a long time in coming. little more than a half - century ago, drillers seeking valuable crude oil bemoaned the discovery of natural gas. given the lack of adequate transportation, wells had to be capped or the gas flared. as the u. s. economy expanded after world war ii, the development of a vast interstate transmission system facilitated widespread consumption of natural gas in our homes and business establishments. by 1970, natural gas consumption, on a heat - equivalent basis, had risen to three - fourths that of oil. but in the following decade consumption lagged because of competitive inroads made by coal and nuclear power. since 1985, natural gas has gradually increased its share in total energy use and, owing to its status as a clean - burning fuel, is projected by the energy information administration of the united states to maintain that higher share over the next quarter century. dramatic changes in technology in recent years, while making existing natural gas reserves stretch further, have been unable, in the face of inexorably rising demand, to keep the underlying long - term price for natural gas in the united states from rising. * * * over the past few decades, short - term movements in domestic prices in the markets for crude oil have been determined largely by international market participants, especially opec. but that was not always the case. in the early years of oil development, pricing power was firmly in the hands of americans, predominately john d. rockefeller and standard oil. reportedly appalled by the volatility of crude oil prices in the early years of the petroleum industry, rockefeller endeavored with some success to control those prices. after the breakup of standard oil in 1911, pricing power remained with the united states - first with the u. s. oil companies and later with the texas railroad commission, which raised allowable output to suppress price spikes and cut output to prevent sharp declines. indeed, as late as 1952 u. s. crude oil production still accounted for more than half of the world total. however, that historical role came to an end in 1971, when excess capacity in the united states was finally absorbed by rising demand. at that point, the marginal pricing of oil, which for so long had been resident on the gulf coast of texas, moved to the persian gulf. to capitalize on their newly acquired pricing power, many producing nations in the middle east nationalized their oil companies. but the full magnitude of their pricing power became evident only

lisa d cook : global linkages - supply, spillovers, and common challenge speech by ms lisa d cook, member of the board of governors of the federal reserve system, at " global linkages in a post - pandemic world " 2023 asia economic policy conference, sponsored by the federal reserve bank of san francisco center for pacific basin studies, san francisco, california, 16 november 2023. * * * thank you, sylvain, and thank you for the opportunity to speak to you today. 1 it is fitting and timely that today we are gathered here to talk about global linkages. it is fitting not only because we are beside the golden gate - where, just a few blocks away, one can marvel at the massive cargo ships making their way to port - but also because this conference has once again brought together scholars and friends from as far away as shanghai, atlanta, and fontainebleau. and it is timely because the discussion of the ties that bind us is as important as ever. to start off this conference on global linkages, i am going to discuss supply shocks, policy spillovers, and common challenges faced by monetary policymakers in recent years and going forward. when the global pandemic hit in the spring of 2020, economies around the world shut down or sharply limited activity, especially for inperson services. also, it quickly became apparent that shutdowns in any one economy were exacerbated by reduced availability of supplies from other economies. policymakers around the world faced the common challenge of supporting incomes and limiting the scarring from temporary shutdowns in activity. the response was similar across countries : fiscal support, particularly to help those most in need, although the magnitude differed, in part because of differences in fiscal space. initially aimed at preventing sharp financial and economic deterioration, monetary policy easing was later extended to support the nascent economic recovery. policy rates were cut to or held near zero in both advanced and emerging market economies. a wide range of central banks also bought assets to support market functioning and provide stimulus once overnight policy rates hit their effective lower bounds. as economies gradually reopened, demand surged, especially for goods. but supply chains were slower to recover, leading to a global surge in inflation. that surge was followed by a further upswing in inflation after february 2022, when russia's invasion of ukraine caused a shock to global supplies of commodities, including oil and natural gas, food and fertilizers, and numerous manufacturing inputs.