The era of cheap natural gas is over, giving way to a period of more expensive energy that would have a ripple effect on the global economy. Natural gas, used to generate electricity and heat homes, has been plentiful and cheap for most of the past decade, expanding supplies from the United States to Australia.

This scenario has been reversed this year, with demand far outstripping supply. Gas charges in Europe hit record numbers last week, while shipments of liquid fuels to Asia approached historic highs for this time of year.

With few options, the global market must increasingly rely on less polluting gas to replace coal to help achieve short-term green goals. But with producers constrained to invest in new supplies under pressure from climate-conscious investors and governments, it’s clear that expensive energy is here to stay.

“No matter how you look at it, gas will be the transitional fuel for decades to come as the largest economies commit to meeting their carbon emissions targets,” said Chris Weaver, CEO of Macro-Advisory, which is headquartered in Moscow. “The gas price tends to stay high in the medium term and high in the long term.”

By 2024, demand is expected to be 7% higher than pre-Covid-19 levels, according to the International Energy Agency. Additionally, appetite for LNG is expected to grow 3.4% annually through 2035, outpacing other fossil fuels, according to analyzing da McKinsey & Co.

As natural gas prices rise, it will become more expensive to supply factories or produce petrochemicals, hitting every corner of the global economy and reinforcing fears of inflation. For consumers, the cost will be reflected in your monthly energy and gas bills. It will be more expensive to use the washing machine, take a hot shower, or prepare dinner. This is particularly bad news for poor countries such as Pakistan and Bangladesh, which have adjusted energy policies on the basis that fuel prices will be lower for a longer period.

Natural gas tariffs in Europe have increased more than 1,000% from an all-time low in May 2020 due to the pandemic, while LNG rates in Asia have doubled by six in the past year. Even prices in the United States, where the shale gas revolution has boosted fuel production dramatically, are at their highest this time of year in a decade.

While there are many temporary factors driving gas prices higher, such as supply disruptions, the global economic recovery, and the halt of new LNG export plants, there is a growing consensus that the world is facing structural change, driven by the energy transition.