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Monday, March 8, 2021

Can One Imagine How Bad This Would Have Been Without Global Warming And Rising Atmospheric CO2 Levels -- March 8, 2021

I assume John Kerry is winging his way to Beijing to put the correct spin on this story.

Link here. This links to my "favorite" writer at that website.

The linked article begins:

Natural gas imports to China jumped by 17.4 percent on the year in the first two months of the year to 28.68 billion cubic meters thanks to the coldest winter in decades, according to Platts data.

The harsh winter in Asia drove a huge spike in demand for natural gas in the region, which led to a surge in spot market LNG prices. Now, this demand is retreating, and prices are down to more normal levels.

China is among the world’s top natural gas importers, along with Japan and South Korea, and therefore a prime target for gas exporters. 
PetroChina, for example, doubled the amount of Russian gas it receives via the Power of Siberia pipeline to 28.8 million cu m daily over the first two months of the year. Sinopec, for its part, ordered 30 cargos of liquefied natural gas for the period to make sure there was an adequate supply of the fuel.  
China is dependent on imports for a solid portion of its gas consumption, so the country is making an effort to also boost domestic production to reduce this dependence. Last year, despite the pandemic, it made progress in that respect, with natural gas production jumping 15 percent on the year. Domestic production was likely to continue growing thanks to robust demand and efforts to decarbonize the Chinese economy.

Yet self-sufficiency in gas is still a dream—and it may remain a dream. China has massive shale gas reserves but exploiting them is challenging because of the complex geology of the deposits and difficulties in attracting foreign investors who could help fund such an endeavor.

It's too bad POTUS is working to kill the US fossil fuel industry just when the world needs us most. To help decarbonize the Chinese economy.

4 comments:

  1. Let's be honest, they're not letting Joe have press conferences because he doesn't know what policies are being enacted or even where he is.

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    Replies
    1. Agree 1,000%.

      Another six months or so and the press will start talking about the "good old" days with Trump tweets and press conferences.

      Delete
  2. The surge is already over. Prices are pretty low (in the 5s), considering transport cost. Probably borderline to support transport and HH, even for cargo with no payment for sunk capital cost of liquifaction. They are up slightly last few days but still really quite low. The US LNG facilities were built positing 8-10+ Asian LNG. Sub 6 is a disaster for the facility (if spot) or for whoever bought the cargo if fixed.

    The big issue was JAN-FEB. But it is over. Real problem is storage. Everyone thought LNG faciilities would make US demand less seasonal. Buit the problem is the overseas demand is still seasonal. Eventually it results in US facilities shutting down, when demand is low. Yes, even with take or pay contracts, eventually you get low enough to pay, not take. (And some Indian/Chinese buyers actually just blow off the contracts--companies paper over the difference by calling it "renegotiation"...but bottomline is contracts are not ironclad.

    The answer is either storage in the end markets or just having excess capacity (to support winter), with some of it dormant in summer. But this means long term the LNG winter prices have to support facilities that don't run all year round.

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    Replies
    1. I don't know enough about natural gas to say one way or the other. But I'm starting to get a pretty good picture.

      Delete

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