Energy independence unintended consequences...what say our resident experts in economics and energy, lustylad and Tiny respectively

[WTF]

https://www.wsj.com/articles/the-lng...es-11648592494

The LNG Export Boom Is Draining U.S. Natural-Gas Supplies and Lifting Prices
Overseas shipments of shale gas are replacing Russian supplies in Europe and boosting prices at home

[Tiny]

Why should I comment? I put a lot of time into preparing a Stockholm Syndrome therapy session for YOU. And I put it into YOUR Jared Diamond thread. And you didn't even bother to read it.

But I can't resist. A "barrel of oil equivalent" from natural gas sells for 30% of what a barrel of oil costs. We're sitting on a huge resource of natural gas, representing many years of production at current rates. Higher prices for American exports, like LNG, benefit Americans. You're going to argue that "replacing Russian supplies in Europe" is a bad thing?

Finally, as production from unconventional oil fields in the Permian Basin grows, as it will if oil prices stay anywhere near where they are now, associated gas production from those fields will also grow, and push back down the price of natural gas.

Natural gas at $5.60 per MMBTU, what it's selling for now at the Henry Hub, represents a low or reasonable price. Again, on a BTU equivalency basis, that's 70% less than what you'd pay for oil. Plus natural gas produces less carbon dioxide and less pollutants than coal and oil. Historically prices of $15.00 per MMBTU for LNG in Asian markets are not uncommon.

[WTF]

The thread was about how exporting NGL is adversely effecting the price in this country. Now if you're arguing that is good for midstream investors, I'd agree. But it is not good for the average American light bills!!!!



.

My apologies for not commenting on your J Diamond response. I did read it and got a good chuckle. I promise to respond at some point. I'm tied up at the moment with AOC, Stockholmpun intended....

[lustylad]

Originally Posted by Tiny

Natural gas at $5.60 per MMBTU, what it's selling for now at the Henry Hub, represents a low or reasonable price. Again, on a BTU equivalency basis, that's 70% less than what you'd pay for oil. Plus natural gas produces less carbon dioxide and less pollutants than coal and oil. Historically prices of $15.00 per MMBTU for LNG in Asian markets are not uncommon.

WTF thinks Henry Hub is a busy glory-hole truck stop outside Houston.

I've read that natural gas prices in Europe are even higher, around $24 per MMBTU (Dutch TTF hub). While the US price has doubled in the past 12 months, the price in Europe has jumped five-fold.

For a normal commodity like oil or soybeans, this would represent a huge arbitrage opportunity. Buy at $5.60 and sell at $24.00 - you earn an instant profit of $18.40 per MMBTU, minus delivery costs. But everyone knows natural gas isn't a "normal" commodity. There are no trans-Atlantic pipelines, so it has to be liquefied and loaded onto special pressurized and refrigerated tankers, then converted back into gaseous form at offloading terminals in Belgium or Germany, etc.

Those LNG plants, on both the export and import ends, are complex, costly, and have long construction lead times. Until many more are built, the US can't simply turn gas exports on or off like a light switch. The WSJ story notes our export capacity will grow by only 16% this year and quotes a Goldman Sachs analyst who says "it should be 2025, however, before enough additional LNG export terminals come online in the U.S. to really tighten domestic inventories and tether prices to more expensive international markets."

Bottom line - US natural gas is far less "tethered" to global markets than crude oil or refined products. How fast this will change - and how soon the huge price disparities between the US and Europe/Asia will be whittled down - depends on how fast we are allowed to expand our LNG export capacity.

[Tiny]

Originally Posted by lustylad

WTF thinks Henry Hub is a busy glory-hole truck stop outside Houston.

I've read that natural gas prices in Europe are even higher, around $24 per MMBTU (Dutch TTF hub). While the US price has doubled in the past 12 months, the price in Europe has jumped five-fold.

For a normal commodity like oil or soybeans, this would represent a huge arbitrage opportunity. Buy at $5.60 and sell at $24.00 - you earn an instant profit of $18.40 per MMBTU, minus delivery costs. But everyone knows natural gas isn't a "normal" commodity. There are no trans-Atlantic pipelines, so it has to be liquefied and loaded onto special pressurized and refrigerated tankers, then converted back into gaseous form at offloading terminals in Belgium or Germany, etc.

Those LNG plants, on both the export and import ends, are complex, costly, and have long construction lead times. Until many more are built, the US can't simply turn gas exports on or off like a light switch. The WSJ story notes our export capacity will grow by only 16% this year and quotes a Goldman Sachs analyst who says "it should be 2025, however, before enough additional LNG export terminals come online in the U.S. to really tighten domestic inventories and tether prices to more expensive international markets."

Bottom line - US natural gas is far less "tethered" to global markets than crude oil or refined products. How fast this will change - and how soon the huge price disparities between the US and Europe/Asia will be whittled down - depends on how fast we are allowed to expand our LNG export capacity.

Excellent post. When I was in my 20's, and working full time in oil and gas, I met a senior partner at one of the largest UK law firms. I was amazed at his knowledge of offshore production technology. He wasn't an expert in energy. But he knew more than I did, and he was a lot better at conveying what he knew than I was. Your post reminds me of that experience.

About LNG capacity, the Biden administration a month or two ago decided to include the effect on carbon emissions of proposed pipelines and LNG liquefaction plants in the criteria the feds look at in deciding whether to approve projects. Hopefully they'll back off that.

WTF used to be able to go with you toe to toe in throwing out homosexual insults. However he seems to be losing his mojo. This is sad. I attribute it to the Stockholm Syndrome. Stockholm Syndrome must be a degenerative disease, something like Lou Gehrig's disease. Hopefully he'll snap out of it. I miss the old WTF.

[WTF]

Originally Posted by lustylad

Those LNG plants, on both the export and import ends, are complex, costly, and have long construction lead times. Until many more are built, the US can't simply turn gas exports on or off like a light switch. The WSJ story notes our export capacity will grow by only 16% this year and quotes a Goldman Sachs analyst who says "it should be 2025, however, before enough additional LNG export terminals come online in the U.S. to really tighten domestic inventories and tether prices to more expensive international markets."

And that is why I've invested in a midstream that seems to have a leg up on NGL exports????

https://www.naturalgasintel.com/ente...in-in-permian/

[WTF]

Would that just be blind luck from an individual who has no understanding of the integrated worldwide energy industry?

The Enterprise Hydrocarbons Terminal in Houston contains the largest-capacity liquid petroleum gas (LPG) export dock in the world by volume, and it accounts for 30% of total U.S. LPG exports. The terminal has averaged over 485,000 barrels per day so far in 2021, down 17% from its average 2020 level.Dec 15, 2021

[WTF]

Originally Posted by Tiny

Ex

WTF used to be able to go with you toe to toe in throwing out homosexual insults. However he seems to be losing his mojo. This is sad. I attribute it to the Stockholm Syndrome. Stockholm Syndrome must be a degenerative disease, something like Lou Gehrig's disease. Hopefully he'll snap out of it. I miss the old WTF.

Going toe to toe with that homo would require the limbs of an octopus to keep him away from your junk.

[The_Waco_Kid]

Originally Posted by WTF

Going toe to toe with that homo would require the limbs of an octopus to keep him away from your junk.

if you say so

[lustylad]

Originally Posted by WTF

Going toe to toe with that homo would require the limbs of an octopus to keep him away from your junk.

That's more like it!