Twenty years from now they're gonna say, "we underestimated the Bakken."
Link here.
I find this incredibly interesting. If "push comes to shove" it will be interesting to see how quickly US shale can ramp up; and load tankers to Europe. My hunch: very, very quickly. All those LNG export terminals are looking pretty good right now.
Yes, it's (not literally) criminal what Biden and JenniG did to US shale (gas and oil). We are paying those higher prices now as a result. And it doesn't even benefit the producers much (their stocks have lagged, many still below 2019, because of the political risk).
ReplyDeleteLNG market is liquid and larger as a result of US growth. But talk about diverting cargoes is just Beltway geopolitics silliness. There's a spot market and the Euros can buy on it, if they want to divert gas from Asia. No reason to give them cut rate cargoes. It's their own situation that they relied on one supplier, didn't lock in long term contracts, didn't buy storage, etc.
Personally, I really doubt the Russians would turn off the gas. Might charge them expensive spot (for non long term contract). But again, that's on the Euros who loved the cheap spot earlier. Total grasshopper summer.
Even if the Russians did turn off the gas, the Euros would adjust by conservation (e.g. shutting down industries dependent on natural gas) more than by buying LNG. Heck remember the Euros shut in Netherlands production because of tremor worries. Maybe they should rethink that. And rethink turning off their nukes. I'm in no hurry to bail them out. They are rich countries. They won't literally starve or freeze. If their economies suffer, tough titties. And the war thing and gas threat is being overplayed by the neocons. The vast majority of whom never served.
It's very possible we will see whether your predictions play out:
Deletewar being overplayed (I assume it depends on perspective; if Russia "takes" Ukraine quickly and relatively painlessly; this could blow over quickly)
agree that Russia needs the revenue; others think Europe needs the natural gas even more.
shutting down industries in Europe: well, that's a great option.
So, we'll see.
It looks like things will be relatively quiet until after the Beijing Games.
But I feel strongly that Putin is re-reading Sun Tzu. I find it interesting no pundits have gone back and taken another look at some of his works.