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Page added on March 7, 2014

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Natural Gas and International Policy

Public Policy

Recent unrest around the world is making U.S. policy makers to look closely at our nation’s energy policy.  Venezuela, one of the world’s largest oil producers, has seen their oil production fall due to political unrest, bad leadership, and a broken economic system.  Russia, another major energy producer, is rattling sabers and Europe is uncomfortable with their reliance on imports from the east.

In the midst of this, the United States has seen a renaissance in it’s energy production.  It is starting to become a major energy exporter again.  Take a look at the below graph from the U.S. Energy Information Administration.
Click for source.
For the first time in a long time, we are producing more oil than we are importing.  If we take a look at natural gas we see the same thing:
Click for source.
The U.S. is set to become a major exporter of natural gas to the world.
In the midst of this, we see this opinion piece from the New York Times on the significance of U.S. energy policy to global conflict.
I think that it is worth recognizing that U.S. energy policy has never (or rarely) been driven by environmental issues.  Instead, it has largely been market and industry driven.  We do not have a national office focused on energy sustainability.
Many state and local governments do work on energy sustainability issues or greenhouse gas management.  However, research is starting to show that their efforts are not that influential.  The power of national policy overshadows their local initiatives.  Thus, while many key local initiatives exist, U.S. national energy policy tends to drive greenhouse gas and green energy trends.  Plus, large international events, such as the conflicts in Venezuela and Crimea, tend to have a significant influence on energy policy.
bob brinkman on the brink


8 Comments on "Natural Gas and International Policy"

  1. Paulo on Fri, 7th Mar 2014 2:39 pm 

    re: “In the midst of this, the United States has seen a renaissance in it’s energy production. It is starting to become a major energy exporter again.”

    hahaha…Aprils Fool

    Paulo

  2. rockman on Fri, 7th Mar 2014 4:21 pm 

    Paulo – Yep…but a tad early. Last numbers I found for net US crude oil and petroleum product import was 2.7 billion bbls for the year 2012. And for 2013 we had a net NG import of 1.3 trillion cu ft. Maybe he meant coal…I think we’re still a net exporter there.

    The sad thing is that the vast majority of the public will read and believe that foolish statement.

  3. Davy, Hermann, MO on Fri, 7th Mar 2014 4:29 pm 

    Another Lobby of plenty and technological exceptionalism spouting off how great things are going to be. Notice how these folks will claim we “Are” going to be an exporter. We are not an exporter except minor exports with Mexico and Canada were geography is economic. We may never be an exporter of LNG to the world. It is always projections that are cited. The US will be energy independent someday I often hear. Yet, they tend to avoid the here and now talk. There are cracks in these forecasts that are rarely brought up by these folks. It is this kind of lobbying that is dangerous for this country. It distorts the markets into bad decisions at a time when we can afford very few bad decisions. I might add the environmentalist that subscribe to the technological exceptionalism lobby are also wrong to promote a society run on AltE. This is another fallacy proved wrong numerous times here and elsewhere.

  4. bobinget on Fri, 7th Mar 2014 5:25 pm 

    I too believe possibilities for gas exports are overblown. In fact, this discussion may become moot
    in a very few weeks as we are experiencing record breaking ‘draws’ in NG storage. Doubtless, if warmer WEATHER doesn’t return by mid March (one week) export talk will quickly evaporate. NG prices need to stay ABOVE $4.75 or there will be serious NG shortages
    NEXT winter.

    Keep in mind we still import some LNG. Export refined oil products and natural gas to Mexico and swap NG geography with Canada.

  5. ghung on Fri, 7th Mar 2014 5:57 pm 

    There’s a typically mainstream debat going on over at CNN/Money, even a bit of sanity buried in the noise. Seems a lot of folks aren’t wild about the idea.

    h ttp://money.cnn.com/2014/03/07/news/economy/gas-exports/index.html?iid=HP_MPM

    (“The real reasons to export U.S. gas”)

  6. GregT on Fri, 7th Mar 2014 6:39 pm 

    There is no doubt that the US will eventually become energy independent. What society will look like at that point, is an entirely different picture.

  7. Nony on Fri, 7th Mar 2014 6:52 pm 

    We could export gas. It is in a glut. $4.5/MCF. And that’s got rigs turned off of drilling. If price gets into the 5s, they will turn on and there are all kinds of plays available.

    You can say tight oil was a flash in the pan and that we knew all about the EF/Bakken (knew all the geology and technology). I don’t 100% buy it, but OK, fine. But gas?? That has been a genuine revolution. That has not been some simple price-driven exploitation of last gasp resources. That has been supply kicking price in the head. God bless George Mitchell and his 40 years of wandering in the Barnett wilderness. He led us to the promised land.

    ;)

  8. Northwest Resident on Fri, 7th Mar 2014 7:57 pm 

    Nony — NG is NOT IN A GLUT. Didn’t you read the response I posted to your totally incorrect assertion of “NG oil glut” a few days ago. There WAS an NG oil glut, then the frigid winter hit, NG “glut” was depleted leaving stored NG levels at record lows.

    Here’s that article, again, with main points:

    “Natural gas in underground storage dropped to 2,423 billion cubic feet (Bcf) for the week ending January 17. The last time storage levels were this low during an equivalent week was in January 2005!”

    * The low price caused demand to creep up.

    * The low price destroyed the business model for drillers.

    * Then cold fronts swept across the country.

    * And the big money has jumped into the fray.

    “Natural gas is famous for its head fakes, unexpected plunges when it should rise, and inexplicable rises when it should drop. It’s being manipulated in a myriad ways. It’s always a bet on the weather, except when it’s not. It can turn around in a second and cause whiplash. It’s a seatbelt-mandatory commodity. And once every few years, there is a panic, and it spikes to dizzying highs.”

    But you still love those NG futures, don’t you Nony. You believe in them, they are what you put your faith in.

    http://www.zerohedge.com/contributed/2014-01-26/glut-whiff-panic-natural-gas-soars