USA Energy Uber Alles!

As usual, Daniel Yergin lays it all out brilliantly. Is anyone in the Biden administration listening? Or capable of using our global energy leverage wisely? Or would they rather kill the goose that lays the golden eggs?

Last month our LNG exports to Europe exceeded Russia's pipeline gas deliveries! I didn't know that... did you?


America Takes Pole Position on Oil and Gas

U.S. exports limit price increases and help check disruptive behavior by the likes of Russia and Iran.

By Daniel Yergin
Feb. 14, 2022 6:24 pm ET

While the Ukraine crisis was raising anxiety about Europe’s dependence on Russian natural gas, something remarkable happened. Last month, for the first time ever, U.S. exports of liquefied natural gas to Europe exceeded Russia’s pipeline deliveries. Russian exports, which normally account for about 30% of Europe’s gas use, dropped substantially because of Russian pricing. And with European gas prices about four times as high as normal, U.S. exports surged to fill the gap.

The extraordinary growth in U.S. oil and gas production is a geopolitical and economic asset for the U.S. that contributes to global energy security. As the domestic oil-and-gas industry continues to rebound from the spring 2020 price collapse caused by the onset of Covid, the U.S. is again the world’s top oil producer—almost 20% above the other two largest producers, Saudi Arabia and Russia—and the world’s top natural-gas producer.

The global oil market, which was drowning in oversupply less than two years ago, has tightened dramatically as the world emerges from Covid shutdowns. That makes the market vulnerable to crisis. Russia’s push on Ukraine, a rebounding global economy, major weather events, or a surprise event could send prices soaring.

That is what oil prices above $90 a barrel are signaling. If there is a new nuclear agreement with Iran that brings its oil back to market, that could moderate prices some. But unless a new virulent Covid wave causes more shutdowns (or the Omicron variant slows China’s economy), prices will remain high.

The shock absorber for averting crisis is “spare capacity,” the sum of the potential output from wells that is currently not produced but can be turned on during a disruption. Spare capacity has shrunk as the rebounding world economy has pushed demand up and some oil-exporting countries, because of underinvestment, haven’t been able to return to former production levels. Almost all the spare capacity that now exists—about three million to 3.5 million barrels a day—is concentrated in two countries: Saudi Arabia and the United Arab Emirates.

One critical offset to the tightening market is the current upswing in shale output from the U.S., which could add more than 900,000 barrels a day this year. Without the resurgence in U.S. supply, oil prices would likely be even higher.

With new export capacity coming this year, the U.S. will become the world’s largest LNG exporter, ahead of Australia and Qatar. In a tight global gas market, U.S. LNG is critical to avoid a world-wide shortage and keep the lights on in Europe, as demonstrated by the flotilla of tankers headed to Europe.

In the coming months, even if all Russian pipeline exports through Ukraine were cut off, U.S. exports could make up the deficit. But in the unlikely event that Russia cuts off all gas exports to Europe, U.S. exports wouldn’t be enough. Europe would have to scramble, using gas from already-thin storage and restarting coal and nuclear facilities to generate electricity.

America’s position as a top energy producer has provided new influence and greater flexibility. The U.S. imposed sanctions in 2012, for example, that prevented Iranian oil exports to push Iran to negotiate during the runup to the 2015 nuclear agreement. Iran initially scoffed, convinced that keeping its oil out of the market would cause shortages and price spikes that would undermine the restrictions. But Iran was wrong. The rapid growth in U.S. oil production quickly replaced, then exceeded, the bottled-up Iranian oil, forcing Iran to negotiate.

U.S. exports of LNG and oil have been welcomed by countries like Japan and South Korea and have bolstered their energy security and deepened their relationship with America. U.S. exports also have become one of the foundations of Washington’s improved and expanded relationship with India.

But there are limits. Like all assets, this new position needs to be managed wisely. To use the oil and gas supply as a tool or weapon would undermine its reliability and could devalue it.

Today there is no doubting the geopolitical importance of America’s new oil-and-gas position. The Ukraine crisis and Europe’s energy crisis shine a light on the global impact of U.S. oil-and-gas production.

Some saw this significance much sooner than others. At the 2013 St. Petersburg International Economic Forum, Vladimir Putin was on stage with German Chancellor Angela Merkel in front of several thousand people. I asked Mr. Putin how Russia planned to diversify its economy from its dependence on oil and gas export revenues. In the course of asking my question, I mentioned the word “shale.” Before I finished, Mr. Putin reacted sharply, denouncing shale gas as a grave threat that should be stopped.

Reflecting afterward, I realized he had two strong reasons to oppose U.S. shale gas. First, it would compete with Russian gas in Europe. Second, shale gas and oil would enhance America’s global strategic position. Given how events are unfolding in Europe today, one would have to say he was prescient.

Mr. Yergin, vice chairman of IHS Markit, is author of “The New Map: Energy, Climate, and the Clash of Nations.”

dimocrats shudder at news that should gladden

debt, deprivations, costs, inflation, frostbite, deaths and hunger are small prices to pay as we transition to dreams of sustainable energy creation which, due to inherencies of circumscription, will have the added benefit of population diminishments

all the lessers just have to suffer you know. a proper winnowing isn't all bad

as charlie munger proffers, "inflation can be the way democracies die"

As usual, Daniel Yergin lays it all out brilliantly. Originally Posted by lustylad

As he always does!


The Prize: The Epic Quest for Oil, Money, and Power was published, as I recall, at least 30 years ago. Quite excellent.


The New Map: Energy, Climate, and the Clash of Nations, which was just released in late 2020, was one of my favorite reads of the year.

.

One slight correction ( opinion )


The extraordinary growth in U.S. oil and gas production is a geopolitical and economic asset for the U.S. that contributes to global energy security. Until Joe Biden came in and fucked it all up and now we import more oil from Russia than we did in 2019.

One slight correction ( opinion )


The extraordinary growth in U.S. oil and gas production is a geopolitical and economic asset for the U.S. that contributes to global energy security. Until Joe Biden came in and fucked it all up and now we import more oil from Russia than we did in 2019. Originally Posted by HedonistForever

What could have been. Then they stole the election. Oh well.

As he always does!

The New Map: Energy, Climate, and the Clash of Nations, which was just released in late 2020, was one of my favorite reads of the year.

. Originally Posted by CaptainMidnight

I'll second that recommendation. I'm reading the book right now, and am about 25% of the way through it. The parts on Russia, the Ukraine, natural gas in Europe, and China are excellent, very helpful in understanding the economic aspects of what's happening right now. You look at the situation between Russia and the Ukraine and how it impacts countries like West Germany, and wonder why the hell certain of our politicians want to squander the advantages we have that flow from our energy resources and those of our neighbor to the north, Canada. LustyLad provided an excellent forum to discuss this, and I shall return to do that, tonight or tomorrow.

I'll second that recommendation. I'm reading the book right now, and am about 25% of the way through it. The parts on Russia, the Ukraine, natural gas in Europe, and China are excellent, very helpful in understanding the economic aspects of what's happening right now. You look at the situation between Russia and the Ukraine and how it impacts countries like West Germany, and wonder why the hell certain of our politicians want to squander the advantages we have that flow from our energy resources and those of our neighbor to the north, Canada. LustyLad provided an excellent forum to discuss this, and I shall return to do that, tonight or tomorrow. Originally Posted by Tiny

Hey Tiny, there isn’t a “West Germany” anymore. It’s just GERMANY again!!!!

Hey Tiny, there isn’t a “West Germany” anymore. It’s just GERMANY again!!!! Originally Posted by bambino

WTF is still thanking Ronnie for that!!

As usual, Daniel Yergin lays it all out brilliantly. Is anyone in the Biden administration listening? Or capable of using our global energy leverage wisely? Or would they rather kill the goose that lays the golden eggs? Originally Posted by lustylad

Silly, you already know the answer to your own question. They'd rather kill the goose that lays the golden egg. What's going on among Russia, Ukraine and Europe right now should show the doubters the importance of a secure energy supply. But just this last week the Democrat-controlled Federal Energy Regulatory Commission (FERC) revised a key policy. Henceforth FERC will consider greenhouse gas emissions in decisions as to whether to approve pipelines and LNG export terminals. And not just emissions that result from the pipelines. They will take into account carbon emitted from burning natural gas transported by the pipelines and by the LNG tankers. Vladimir Putin must love this. If he can stifle development of U.S. LNG exports, he'll have more bargaining chips to use against Europe and east Asia.

And that's just one step that Biden and other Democrats have proposed or attempted in order to kneecap the oil and gas industry. Here are some more,


1. Elizabeth Warren, Bernie Sanders, Kamala Harris, Corey Booker and other Democratic candidates for President campaigned on banning fracking. Since most of U.S. oil and natural gas is produced from hydraulically fractured wells, their proposal would have turned the USA into a huge importer of oil and gas overnight.

2. Joe Biden campaigned on shutting down oil and gas operations on federal land and in federal waters, by ceasing to issue drilling permits and new leases. Around 25% of U.S. oil production and 14% of gas production are from federal areas. That would have been a good start towards laying waste to the domestic oil and gas industry. And Biden's proposal to ultimately reduce net carbon emissions to "0" would finish it off. Fortunately the courts put a stop to Biden's bans.

3. The Biden Administration put an end to the Keystone XL Pipeline. So instead of having more Canadian crude piped to Gulf Coast refineries, where it could be processed and exported or consumed domestically, some of it can go to China and other Asian countries instead. Having 830,000 barrels a day flowing into the USA from a friendly nation via pipeline would have provided us with more energy security in the event Progressives decide to shut the domestic industry down. And it would have provided jobs to our refinery workers.


4. We came very close to passing a carbon tax late last year. Kyrsten Sinema, who was holding up the Build Back Better bill because she wisely didn't want to jack up income tax rates, was amenable to a carbon tax. The Democratic politicians set to work to devise a plan that would not only raise government revenues and reduce domestic consumption of fossil fuels, but also cut off our coal and LNG exports from the world market. They would do this by imposing the tax on the coal mines and on the plants that process the gas, instead of the U.S. power plants that burn the coal and service stations that sell gasoline. Thus, natural gas and coal destined for overseas markets still pay the tax. And lower cost coal from Australia and Indonesia and lower cost gas from Russia and Qatar take market share from U.S. producers and processors.

And what's the point in making our exporters uncompetitive? None. What we don't sell will be supplied instead by other countries. There would be no reduction in carbon emissions. But, I guess like raising the capital gains tax so high that government revenues from the tax go down, certain politicians get to fuck over people they believe are evil, the capitalists and the oil producers and the like.

Thankfully Joe Manchin, who owns a coal trading company, saved us from this. And that's one more reason I pray for Joe Manchin every night, just like Mitch McConnell told me to.

Silly, you already know the answer to your own question. They'd rather kill the goose that lays the golden egg. What's going on among Russia, Ukraine and Europe right now should show the doubters the importance of a secure energy supply. But just this last week the Democrat-controlled Federal Energy Regulatory Commission (FERC) revised a key policy. Henceforth FERC will consider greenhouse gas emissions in decisions as to whether to approve pipelines and LNG export terminals. And not just emissions that result from the pipelines. They will take into account carbon emitted from burning natural gas transported by the pipelines and by the LNG tankers. Vladimir Putin must love this. If he can stifle development of U.S. LNG exports, he'll have more bargaining chips to use against Europe and east Asia.

And that's just one step that Biden and other Democrats have proposed or attempted in order to kneecap the oil and gas industry. Here are some more,


1. Elizabeth Warren, Bernie Sanders, Kamala Harris, Corey Booker and other Democratic candidates for President campaigned on banning fracking. Since most of U.S. oil and natural gas is produced from hydraulically fractured wells, their proposal would have turned the USA into a huge importer of oil and gas overnight.

2. Joe Biden campaigned on shutting down oil and gas operations on federal land and in federal waters, by ceasing to issue drilling permits and new leases. Around 25% of U.S. oil production and 14% of gas production are from federal areas. That would have been a good start towards laying waste to the domestic oil and gas industry. And Biden's proposal to ultimately reduce net carbon emissions to "0" would finish it off. Fortunately the courts put a stop to Biden's bans.

3. The Biden Administration put an end to the Keystone XL Pipeline. So instead of having more Canadian crude piped to Gulf Coast refineries, where it could be processed and exported or consumed domestically, some of it can go to China and other Asian countries instead. Having 830,000 barrels a day flowing into the USA from a friendly nation via pipeline would have provided us with more energy security in the event Progressives decide to shut the domestic industry down. And it would have provided jobs to our refinery workers.


4. We came very close to passing a carbon tax late last year. Kyrsten Sinema, who was holding up the Build Back Better bill because she wisely didn't want to jack up income tax rates, was amenable to a carbon tax. The Democratic politicians set to work to devise a plan that would not only raise government revenues and reduce domestic consumption of fossil fuels, but also cut off our coal and LNG exports from the world market. They would do this by imposing the tax on the coal mines and on the plants that process the gas, instead of the U.S. power plants that burn the coal and service stations that sell gasoline. Thus, natural gas and coal destined for overseas markets still pay the tax. And lower cost coal from Australia and Indonesia and lower cost gas from Russia and Qatar take market share from U.S. producers and processors.

And what's the point in making our exporters uncompetitive? None. What we don't sell will be supplied instead by other countries. There would be no reduction in carbon emissions. But, I guess like raising the capital gains tax so high that government revenues from the tax go down, certain politicians get to fuck over people they believe are evil, the capitalists and the oil producers and the like.

Thankfully Joe Manchin, who owns a coal trading company, saved us from this. And that's one more reason I pray for Joe Manchin every night, just like Mitch McConnell told me to. Originally Posted by Tiny

Did Mitch tell you to pray for “West Germany” too?????

West Germany. I’m so humiliated. I’m going to strive to up my game, so that what I write would be something you’d happily quote, like the stuff on Telegram.

How many of you have invested in energy stocks?

Many of you should pay attention to actions and not the rhetoric...that may be conductive to more positive investment decisions


https://www.audubon.org/news/despite...ng-under-biden

And yet, the White House is on pace to hand out more oil and gas drilling permits this year than any under President Trump and the most since George W. Bush left the Oval Office. The boom, first reported by the Associated Press,

How many of you have invested in energy stocks? Originally Posted by WTF

Moi. Mostly foreign companies though. I have a position in a U.S. coal company that produces only coal used in steel making, and all of it’s exported.

The way the Democrats’ proposed carbon tax was structured, so that it would tax exports, would have put the company out of business. It wouldn’t be able to compete with lower cost Australian producers.

And so how would that have increased government revenues? They would have gone out of business and so wouldn’t pay income tax.

And how would it have reduced carbon emissions? There’s no substitute for coking coal in steel making. And the Australians and others would have replaced the volumes previously exported from the USA. Brilliant.

Many of you should pay attention to actions and not the rhetoric...that may be conductive to more positive investment decisions


https://www.audubon.org/news/despite...ng-under-biden

And yet, the White House is on pace to hand out more oil and gas drilling permits this year than any under President Trump and the most since George W. Bush left the Oval Office. The boom, first reported by the Associated Press, Originally Posted by WTF

I read that, or scanned it anyway, a few days ago. I believe they fail to note that the courts stepped in and put a stop to the suspension of issuance of drilling permits and leases. But I haven’t seen where the Biden administration appealed the decisions. So maybe it’s like the Hyde Amendment, Biden’s not a true believer in the bans but just incorporated them into his campaign platform to get the Democratic nomination. There are however a lot of true believers, Progressives, in the party who do want to get rid of fossil fuels. And they’ve become the guiding lights in the party and the Biden administration.