…America’s Resource Abundance…
The United States is blessed with an abundance of fossil fuels, i.e., natural gas, oil and coal, providing it with a huge economic advantage.
Meanwhile, this administration is doing all it can to destroy this advantage, and relegate the United States to a position of weakness among nations.
The current situation with natural gas (NG) is an example of America’s economic strength, which is being threatened by net-zero carbon policies.
The United States is now exporting LNG to Asia and Europe, with the bulk going to Asia.
Asian demand for LNG is insatiable, while Europe is in dire need of natural gas to fill its depleted storage caverns.
American exporters are getting paid the highest price for LNG since 2015, when US fracking created an abundance of supply that broke the historic pricing mechanism where the price for NG was linked to the price of oil.
This chart shows the price for LNG in Asia (JKM benchmark), and Europe (TTF benchmark), and the Henry Hub in the United States. In Asia, the price is the highest on record.
Europe’s storage of natural gas is below its 5 year average. This bodes ill for the forthcoming winter months. Russia seems to be withholding shipments and will reap huge gains if NG supplies remain drastically low when the cold weather arrives.
Meanwhile, this administration, which is calling for the end of fracking, is asking Saudi Arabia to increase the amount of oil it produces.
It was only a few months ago that the United States produced virtually all the oil it needed.
But the closure of pipelines, the removal of federal lands from drilling, and the attack on methane emissions, coupled with attempts to ban fracking, has placed the United States in the position of needing to import oil. Gasoline prices are already higher than during the past five years, with the national average at $3.16 per gallon in August, before hurricane Ida.
And the price of natural gas in the US has increased to around $5.00 per MM BTU, the highest in several years. Exports have increased, but production hasn’t increased to meet the demand. The production of oil also produces natural gas, but companies aren’t going to invest in new development with more drilling rigs when the government is attacking them and they can’t be assured of earning a return on their investment.
Now, the Biden administration plans on fining companies for their methane emissions.
The natural gas we use for cooking, heating, and power generation is nearly pure methane, so higher prices for natural gas mean higher costs for cooking, heating homes, and for electricity.
This is merely a foretaste of what will happen with net-zero carbon policies.
The United States has an abundance of resources which will go to waste, and force the US to become a beggar nation if the current net-zero carbon policies continue.
. . .