Not only will there be electrical-supply problems this summer.
There will be natural gas-supply problems.
All thanks to Bidenš¤” and his "81 million" voters. He's fully capable of invoking the Defense Production Act........but hasn't.
NG prices are up 3x in past year, reaching record highs in the shale gas era. Previously, the market has responded with a flood of new supplies. But the regulatory state has effectively capped growth in the largest and most prolific gas region in the US....
Appalachia (Marcellus + Utica) represents 1/3 of US gas production & huge reserves, but gas is only useful if it can be piped. Takeaway capacity is effectively maxed-out today. The region needs new pipelines, but environmental regs have killed or delayed all 4 recent projects....
...The inability to build infrastructure is not due to lack of capital; it’s due to a reg state that makes development very hard. Solving that requires national prioritization. But we’re doing the opposite. Unless something changes soon, this is a train wreck in slow motion....
Let's GO, Brandon!
There's more!
...Arnold points out an NYTimes article explaining how "Biden made it even harder to acquire permits by restoring state and tribal rights to veto energy infrastructure."
"Without the ability to build, demand destruction is the only way to balance the market," he warned. Noting, "if Appalachian supplies have permanently plateaued, we're looking at structurally higher gas prices."
Arnold said soaring natgas prices would "affect utility bills, it raises the costs of most domestic manufacturing, especially intermediate goods like steel, glass, chemicals, fertilizer, & refining." ...
"Demand destruction" means pricing so high that you're better off freezing in winter--or just not buying any of the goods listed above.
Try that for a while. See how it works.
What does all that mean to you? Plenty!
...On Monday, Henry Hub natural gas futures were up nearly 10 percent at a 13-year high. At 5 p.m. EST, Henry Hub prices for July contracts sat at $9.368, up 9.91 percent. August contracts were at $9.350, up 9.87 percent.
In its 2022 outlook released in late May, the Federal Energy Regulatory Commission (FERC) projected that U.S. demand for natural gas would outpace supply this summer. As reported by NGI, FERC sees U.S. dry natural gas production increase by 3.4 percent over the summer months, compared to a projected 4.8 percent increase in consumption during that same period....
"You Will Have Nothing and Like It."
Let's GO, Brandon!!
No comments:
Post a Comment