How much faith can we put in our ability to decipher all the numbers out there telling us the US is closing in on its cornering of the global oil market? There’s another side to the story of the relentless US shale boom, one that says that some of the numbers are misunderstood, while others are simply preposterous. The truth of the matter is that the industry has to make such a big deal out of shale because it’s all that’s left. There are some good things happening behind the fairy tale numbers, though—it’s just a matter of deciphering them from a sober perspective.
Despite stockpiles imploding and prices exploding in the short-term, The U.S. Energy Information Administration (EIA) has predicted that natural gas production in the US will continue to grow at an impressive pace. Right now output is close to 70 billion cubic feet a day and is expected to reach over 100 billion cubic feet per day by 2040. The trend is likely to continue without hitting a geologic “peak”, and along with this trend will come new marketing opportunities for America. The following exclusive interview with OilPrice.com answsers some of the bigger questions...
The potential for a golden age of gas comes along with a big “if” regarding environmental and social impact. The International Energy Agency (IEA) - the "global energy authority" - believes that this age of gas can be golden, and that unconventional gas can be produced in an environmentally acceptable way.
... We have created an apparently wonderful economic model that seems to provide us with so many benefits. When you consider the incredible feats of technology and the global consumerist lifestyle we enjoy it is easy to marvel at what has been achieved. Of course what may be less obvious is the dark side of the growth economic model which is deeply inequitable, restricting its benefits to the relative elite in the western world and trapping the rest of the world in poverty. Most dangerous of all is the unsustainability of the model and where it is taking us in the future. There is now a perfect storm gathering that includes economic indebtedness, resource shortages, population pressures, and climate change that is guaranteed to derail civilisation. Despite this the political and economic mainstream are largely in denial about what is happening– like the hapless engineer and politician in the story everyone agrees that we must restart the ‘growth economy’ and continue to progress down the business as usual pathway. Very few people are taking the long term view and watching the direction towards doom that this pathway leads us. Too invested in the benefits of our current lifestyle, no one wants to hear the counsel of the philosopher who sees the disaster that looms ahead.
Whenever something bad happens – Iran moving closer to acquiring nuclear weapons, North Korea firing another missile, civilian deaths reaching another grim milestone in Syria’s civil war, satellites revealing an alarming rate of polar-ice melt – some official or observer will call upon the international community to act. There is only one problem: there is no “international community.” In short, those looking to the international community to deal with the world’s problems will be disappointed. This is not reason for despair or grounds for acting unilaterally. But so long as “international community” is more hope than reality, multilateralism will have to become more varied.
Should we throw logic out the window and run with the bulls?
- Humans Beating Robots Most Since ’08 as Trends Shift (BBG)
- Easing of Mortgage Curb Weighed (WSJ)
- European Banks Face Capital Gap With Focus on Leverage (BBG)
- Signs Suggest China Warming to Idea of Stimulus (WSJ)
- China Coal-Fired Economy Dying of Thirst as Mines Lack Water (BBG)
- Jeans and shoes show criminal underbelly of China-EU trade (Reuters)
- How U.S. drug sting targeted West African military chiefs (Reuters)
- Japan scrambles jets after China plane flies by southern islands (Reuters)
- Apple Plots Return to Growth After Coping With Aging Lineup (BBG)
- AT&T Falls Shy of Analyst Estimates as Discounts Hurt Margins (BBG)
- SAC insider trading case takes twist (FT)
- Scalpel in Hand, Chinese Premier Li Stirs Reform Hopes (Reuters)
- Obama Sets Conditions for Keystone Pipeline Go-Ahead (FT)
- World’s Most Indebted Households Face Rate Pain (BBG)
- SAC Probers Weighing 'Willful Blindness' Tack (WSJ)
- Draghi Says ECB Ready to Act, Calls for Investment Over Tax (BBG)
- U.S. Tops China for Foreign Investment (WSJ)
- Basel Presses Ahead With Plans to Limit Bank Borrowing (FT)
- Gillard Ousted as Australia PM by Rival Rudd (FT)
- Japan Economic Strength Will Show in Stocks, Nishimura Says (BBG)
One look at the airplane traffic map below should be enough to convey which socialist European country has a just started a 3-day air traffic controller strike. Sure enough, as a result of the French ATC union demands for 'fairness', i.e., an elimination in the "unprecedented" cost-cutting plan, the eastern air border of France now looks like the 405 Freeway during rush hour.
The Obama administration has come out in support of the idea of exporting U.S. natural gas. This stance is counterproductive and shortsighted, and if followed, it will prove harmful to domestic manufacturing (i.e., value generation) and to future generations of Americans. While exporting natural gas would certainly prove to be an economic boon for a very select minority of companies and individuals, it makes no sense from an energy standpoint and undermines our national interests. All it will do is enrich a few while boosting prices for all domestic consumers and shortchanging the energy and environmental inheritance we pass along to our children. The time has come to give greater weighting to energy matters than to economic and political desires. To continue to be energetically wasteful at this time in history, when so much data is telling us that the effluent of our activities is measurably altering our support systems, is beyond embarrassing. It's tragic.
- PBOC Says China Shouldn’t Be ’Blindly Optimistic’ on Inflation (BBG)
- Foreigners Buying Half of London New Homes Prop Up Building (BBG) - first they come for the foreign deposits, then for the real assets...
- Investors Rediscovering Margin Debt (WSJ) - well, yes: it is at record highs
- China issues new rules targeting wealth management fund pools (RTRS)
- Navy $37 Billion Ships Seen Unsuitable Have 2-Year Window (BBG)
- New York may have to drop claims against BofA over Merrill (RTRS)
- FBI Rejects Boston Police Stance in Spat Over Terror Data (BBG)
- In eastern Syria oil smugglers benefit from chaos (RTRS)
- Turn to Religion Split Bomb Suspects' Home (WSJ)
- The propaganda is back for the 4th year in a row: Spring Swoon Sequel No Reason for Economic Growth Scare in U.S. (BBG)
- Bernanke Jackson Hole Absence Contrasts With Greenspan Adulation (BBG)
- Large economies promise to boost growth (FT)
- Tata Faces Crisis as $20 Billion Spent on Water (BBG)
- U.S. Eyes Pushback On China Hacking (WSJ)
- Fed's Bernanke sees no U.S. inflation risks: Nowotny (Reuters)
- Austerity on Trial With U.S. Versus Europe Amid New Evidence (BBG)
- Eurozone anti-austerity camp on the rise (FT)
- Spain Aims to Soften Budget Cuts (WSJ)
- Japan's Aso Calls Recovery 'Few Years' Away (WSJ)
- BOJ Said to Consider Price Forecast Upgrade (WSJ)
- Apple reportedly stops placing Mac component orders (DigiTimes)
- Apple Ordered to Remove Obscene Content From China Store (BBG)
- Texas Ammonia-Plant Blast Kills as Many as 15 People (Reuters)
- Boston Probe Said Focused on Person Dropping Bag at Site (BBG)
- The Chinese cold trade war comes come to roost: US becomes Japan’s top export market (FT)
- Berlusconi, Bersani back Marini in presidential vote (Ansa)
- German parliament backs Cyprus bailout (Reuters)
- China Vows Wider Yuan Movement (WSJ)
- Morgan Stanley Sees Core Earnings Weaken (WSJ)
- Gold Miners Lose $169 Billion as Price Slump Adds ETF Pain (BBG)
- G-20 Draft Affirms Pledge to Avoid Competitive Devaluations (BBG)
- IMF warns on risks of excessive easing (FT)
- The battle for the Swiss soul (Reuters)
If You Don't Believe In Global Warming, Please Forward This to Your Friends Who Do
While gold, silver, and platinum remain held in ranges, it appears China's NDRC comments on carbon emissions and improved energy efficiency have been taken seriously enough to drive Palladium prices to 18 month highs (and notably divergent from the rest of the PM group). Palladium is now up more than twice the 215% gain in gold since Lehman and leads the PMs.