• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

LNG: The Long, Strategic Play For Europe

Tyler Durden's picture




 

Submitted by James Stafford of OilPrice.com

LNG: The Long, Strategic Play for Europe: Interview with Robert Bensh

Liquefied natural gas (LNG) to Europe isn’t a get-rich-quick scenario for the impatient investor: It’s a long, strategic play for the sophisticated investor who can handle no small amount of politics and geopolitics along the way. When it comes to Europe, Russia’s strategy to divide and conquer has worked so far, but Gazprom is a fragile giant that will eventually feel the pressure of LNG.

Robert Bensh is an LNG and energy security expert who has over 13 years of experience with leading oil and gas companies in Ukraine. He has been involved in various roles in finance, capital markets, mergers and acquisitions and government for the past 25 years. Mr. Bensh is the Managing Director and partner with Pelicourt LLC, a private equity firm focused on energy and natural resources in Ukraine.

In an exclusive interview with Oilprice.com, Bensh tells us:  

•    Why the smart LNG play is a long-term one
•    How LNG fits into the European energy picture
•    Why LNG will eventually pressure Russia in Europe
•    Why Gazprom is but a fragile giant
•    How Russia combines gas and political influence in Eastern Europe
•    How the European Union is easy to divide and conquer
•    Why the Ukraine crisis has brought attention to the South Stream pipeline
•    Why Bulgaria is the new front line
•    How Lithuania succeeded in negotiating down Gazprom
•    What Moscow’s Crimea annexation really achieved
•    Why it’s game over for Gazprom prices when Turkey steps in

James Stafford: Where does LNG fit into the overall European energy picture?

Robert Bensh: A better question might be, “When does LNG fit into the European energy picture?” When the price is right, it fits into the picture across the European Union, with new import terminals under construction, plenty of transmission lines to deliver it to land-locked countries and the prospect of deliveries from rising energy hub Turkey. And while it may not be a reality at this very moment, it is the prospect of cheaper LNG and the pace of LNG infrastructure development that has Gazprom worried about maintaining its monopoly.

James Stafford: So from an investor’s perspective, what do we need to know here?

Robert Bensh: Listen, the LNG economics are marginal. LNG is about long-term, steady supply. It’s a low-margin, long-term supply of gas to Europe. This is not a play for impatient investors who are looking to get rich quickly. This is a play for investors with longer-term vision, patience and strategic capabilities on a regional level. Those are the people who are going to make money off of this and, along the way, help reshape the balance in Europe away from Russia.

James Stafford: Who are the buyers in this scenario?

Robert Bensh: The countries that primarily take LNG are the Eastern European countries that are paying the highest gas prices and feeling the most significant strategic energy crunch from Russia. They can purchase large amounts of LNG on five 10-year contracts.

James Stafford: And what will Gazprom’s response to more LNG for Europe be? What are its options?

Robert Bensh: Gazprom will either see its supply reduced, or it will be forced to reduce prices to limit economic impact. But once we can start getting LNG through the Turkish-controlled Bosphorus Strait, it is game over for Gazprom in terms of pricing. You’ll still have LNG coming into Europe simply because demand will always exceed supply with long-term contracts in place. That’s when you’ll start to see significant amounts of Canadian and American LNG entering the European and Asian markets, which will affect gas prices in Europe.

James Stafford: Has Russia’s, or Gazprom’s, energy strategy in Europe really been as sinisterly brilliant as is often suggested?

Robert Bensh: In many ways, yes; but it has its limitations. Financially, Russian gas monopoly Gazprom is a fragile giant.

Russia’s European energy policy is to approach different EU states on an individual basis in order to discriminate with price and get the maximum price possible from each. Beyond that, Russia also attempts to lock in supply by consolidating control over strategic energy infrastructure throughout Europe, as well as Eurasia.

In 2002, for example, Russia attempted to buy major energy infrastructure holdings in the Baltic states of Lithuania and Latvia. When both countries refused to cede control, Moscow sharply cut oil deliveries to both states. The final piece of Moscow’s strategy is to maintain control of energy corridors, thus denying Europe any alternative energy routes.

Russia gets away with this because its divide-and-conquer energy strategy is made easy by the fact that the European Union is anything but unified.   

James Stafford: How does Gazprom’s controversial South Stream pipeline play into the crisis in Ukraine?

Robert Bensh: The South Stream pipeline is now coming into much clearer focus against the backdrop of the Ukraine crisis. This pipeline, which would run from the Black Sea to Austria and bypass Ukraine, is both a frightening and exciting proposition for Central and Eastern Europe. The specter of this pipeline makes the fractures in Europe highly visible.

The annexation of Crimea was significant on numerous fronts. The Ukraine crisis provided Russia with the opportunity to achieve important the economic and geopolitical goals of promoting alternative energy supplies that bypass Ukraine. And the results have been quick: Already, some EU countries have indicated that they are willing to drop their objections to the South Stream pipeline in order to increase the percentage of gas shipped directly from Russia.

James Stafford: What about Bulgaria’s recent back-and-forth over South Stream? What can we read into this?

Robert Bensh: For the South Stream pipeline, which is largely a macrocosm of the Ukraine crisis, the front line is Bulgaria, where Russian influence is now at its strongest, and where there is already talk of the country becoming the next Ukraine. The wider EU is trying to block the South Stream project, while Central and Eastern Europe are very torn. Bulgaria is where this pipeline will enter the EU, and accusations persist that Gazprom has had a hand in framing Bulgarian legislation that would circumvent EU competition directives. All of Europe wants this pipeline, but Brussels doesn’t want it to be majority-Russian owned — they want to enable other suppliers to bring gas through it.

The Bulgarian story is getting very interesting. Last week, the Bulgarian government said it was suspending working on South Stream, under pressure from the EU over the project and U.S. sanctions against Russian firms working on the project. Bulgaria is caught in a very bad place here—between Russia and the EU. On the one hand it is suspending work—for now, as it consults with the EU. On the other hand, it is making sure everyone knows it still intends to go ahead with South Stream.  

James Stafford: How much of a threat to Russia is the European Commission’s pending investigation into Gazprom’s monopolistic activities?

Robert Bensh: Europe has argued that Gazprom manipulates prices for political gain and the European Commission is set to release the results of a two-year investigation this month, which is expected to demonstrate substantial evidence that Gazprom is breaking European laws. After that report is released, the EC could take action relatively quickly with up to10 billion euros in fines, which Gazprom cannot afford. Again, the Bulgaria question will figure prominently in his debate.

James Stafford: How does Russia take advantage of the divisions within the EU?

Robert Bensh: The problem within the EU is that Western European countries have more supply opportunities, while Central and Eastern Europe are stuck with Russia. There is no common policy among the EU countries, so there can be no unified front to take on Russia in the energy sphere. Russia takes full advantage of this bifurcation. While talking of interdependence and dialogue, Russia has insisted on providing demand guarantees for the producers and sharing responsibilities and risks among energy supplier’s consumers and transit states. Russia’s actions have not backed up its visions for a new global energy security due to the state policy of not budging from monopolizing gas production or oil and gas pipeline transportation. Europeans are wholly energy dependent on Russia.   

Russia conducts geo-economic warfare on Europe. Russia’s vast oil and gas resources and strategic geographic positioning has translated into increased influence in global energy markets and political clout in its relations with the numerous states that remain more or less dependent on Russian energy. Lawsuits and rulings from the European Commission will prove to be well intended, yet ultimately failed efforts to control Russia’s policy aims driven by control of energy supply and transportation. Here is where efforts to reduce dependence by one client state will have a concomitant benefit for other client state consumers. The European Union lacks a coherent, unified energy strategy and policy towards Russia. Russia thus wisely triangulates client states and the EU to achieve their policy goals either through cheaper supply or infrastructural development.   

James Stafford: Will other countries in the region follow the example of Lithuania and Poland—both of which are aggressively pursuing alternatives to Russian piped gas?

Robert Bensh: Some, yes, out of necessity. The wisest ones, of course, will develop what they can internally of their own resources in an effort to reduce or possibly even remove the need for Russian oil and gas.

James Stafford: Where in Europe is there the potential to actually develop domestic resources to reduce Russian dependence?

Robert Bensh: Ukraine has the potential to do so. Poland, potentially, as well. Other countries, the Baltics in particular, will have a much harder time reducing dependence through internal resource development. For this reason, the development of LNG and additional transportation routes to the region are vital strategically to reduce the dependence on Russian energy.

James Stafford: How should we perceive Lithuania’s recent success in negotiating down gas prices with Gazprom?

Robert Bensh: The country has very earnestly pursued LNG and is close to signing a supply deal with Norway’s Statoil. This, in turn, has forced Russia into price concessions for fear of losing market share. But for now, it’s a luxury that the poorer members of the EU in Central and Eastern Europe cannot afford, economically or politically.  

Unfortunately, most countries will not play ball. Either they have enough of an internally generated resource base to help reduce dependence on Russian energy, or they have multi-integrated economic ties to Russia. Or both.  

The crisis in Ukraine has taught us a devastating lesson: The failure to reduce dependence on Russia, in combination with a multi-integrated economic union with Russia, exposes a client state to geo-economic warfare. In Ukraine, this situation eventually led to President Viktor Yanukovych refusing to sign an Association Agreement with the European Union, which in ignited the Maidan protests that led to the president’s overthrow and Russia’s annexation of Crimea.   

James Stafford: Where will politics and geopolitics head this off? What is Russia’s weak point, it’s Achilles’ heel?

Robert Bensh: Russia has done a good job of tactically focusing on each client state, recognizing their weaknesses and exacerbating them to suit their needs. The only countries that can head this off are those with independent economies and diversified energy supplies. Russia can only provide oil and gas supplies and energy infrastructure development. It cannot provide expertise in oil and gas drilling or service, which really comes from the United States.

And Gazprom’s Achilles’ heel—that which makes it a fragile giant—is the prospect of losing the European market to LNG. And it eventually will, at least in part, though it won’t be tomorrow.

James Stafford: What does the LNG pricing look like right now?

Robert Bensh: LNG is always about $1 less than Gazprom. The U.S. wants to sell their LNG, period. Asian prices are higher, anywhere from $3-$4 higher. But long, steady supply will always get sold. Unless Gazprom comes down in its prices, to make LNG uneconomic, there will always be an LNG marketplace in Europe. There will always be enough supply to meet demand in Europe. All Gazprom has to do is drop its prices down $1 and LNG will be uneconomic. But you have some countries in Europe who are willing to pay a premium to reduce their dependence on Russian gas. LNG supply and the development of internal resources is a strategic decision being made by each country.  

There won’t really be U.S. LNG hitting Europe until 2017-2018. There isn’t enough LNG coming from the U.S. to supply both Asia and Europe. Until there are more export terminals built in the U.S., there will always be significantly more demand than supply, from a U.S. standpoint. For now, U.S. LNG does not impact Europe—we’re not transporting enough in the next five years.  

James Stafford: Last month, amid the crisis in Ukraine, Russia and China inked what is viewed as a highly significant gas deal. What are the implications of this deal for Europe?

Robert Bensh: Let's put this into perspective a bit: This Russia-China deal might not be squeezing out potential supply to Europe, but making up for the likely disappearance of the market for gas from Ukraine. A decade ago, Ukraine was buying 52 billion cubic meters of gas annually from Russia, and last year, this was down to 28bcm. The take-or-pay agreement signed in 2009 was for 42 bcm, which is more than the annual supply as per the China deal. It is not unreasonable to think of Ukraine being totally self-sufficient in gas over the next decade as rational energy pricing reduces very inefficient consumption, while Ukraine has lot of opportunities to hike production -- assuming it remains unified.

This is part one of a three-part series of interviews examining the prospects for Black Sea LNG.

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 06/22/2014 - 20:11 | 4884088 MeMadMax
MeMadMax's picture

Dude,

LNG from the US to europe is a JOKE.

 

Just like this dude that's trying to play us for fools....

Sun, 06/22/2014 - 20:22 | 4884111 kaiserhoff
kaiserhoff's picture

I'm usually in favor of any form of energy, including burning urban fat phucks, but these things are floating bombs and terrorist magnets.

Use the gas here, export oil and coal.  We'll all live longer.

Sun, 06/22/2014 - 20:24 | 4884119 CrazyCooter
CrazyCooter's picture

The process of liquifying natural gas consumes approximately 30% of the energy for a given volume. That is to say, if you had 1 unit of methane, at industrial scale you could consume the methane for energy and use that energy to liquify the 1 unit (i.e. cool the gas to -260 degrees F  or -161 degrees C) and have approx .7 units left.

Can you say "premium".

Regards,

Cooter

Sun, 06/22/2014 - 20:29 | 4884128 knukles
knukles's picture

Talking about Your Zen for the Day and natural gas...

 

They say that cucumbers make you burp.
I must not be shoving mine up far enough.

 

Sun, 06/22/2014 - 20:46 | 4884171 Stackers
Stackers's picture

The real deal killer with LNG is the cost in energy to liquefy it all. First it takes energy to get it out of the ground, then more energy to clean it and transport it to the LNG plant which uses a LOT of energy to cool the gas down to cryogenic temps. All that for a fuel with half the stored energy per volume of mass as diesel fuel.

Sun, 06/22/2014 - 20:59 | 4884208 kowalli
kowalli's picture

They need to tell any BS to public to cut off Gazproms pipeline.

Sun, 06/22/2014 - 21:13 | 4884235 pods
pods's picture

I skimmed the article and saw not one mention of Unicorns or Skittles.

pods

Sun, 06/22/2014 - 21:59 | 4884326 Manthong
Manthong's picture

Oh, gee..

I don’t want to even think of what one of those LNG things would like if detonated.

Sun, 06/22/2014 - 23:17 | 4884527 Latina Lover
Latina Lover's picture

This Benish is a state department paid shill, a professional liar masquerading as a second rate analyst. LNG will always be more expensive than Russian Gas, making Europe even less competitive. 

Mon, 06/23/2014 - 05:12 | 4884827 BorisTheBlade
BorisTheBlade's picture

Ain't surprised for a second there. Natgas Pipelines are the most efficient on a cubic meter basis, same with oil. No wonder Rockefeller built pipelines when he envisioned his Standard Oil Empire. Genuises in DC think they will outprice Russian gas through LNG shipped from the unstable Middle East or by tankers through Atlantic. Taking on Gazprom with that logic is a teriffic idea except simple physics of the process run contrary to that intention. Someone will have to subsidize the entire venture and it won't be Gazprom or US: it will be Europe, which will pay for American need to contain Russia in the energy markets.

Sun, 06/22/2014 - 21:18 | 4884248 SuperRay
SuperRay's picture

I hope this guy paid Tyler a lot of money to post this propaganda...

Sun, 06/22/2014 - 21:36 | 4884278 Ignatius
Ignatius's picture

"Copyright ©2009-2014 ZeroHedge.com/ABC Media, LTD; All Rights Reserved."

His name was Tyler Durden.

Propaganda.  Because it works.

Sun, 06/22/2014 - 21:44 | 4884290 strannick
strannick's picture

In Ukraine, this situation eventually led to Agreement with the European Union, which in ignited the Maidan protests that led to the president’s overthrow and Russia’s annexation of Crimea.   

-Ahh, so Maidan was a popular uprising. While all along I took Vicky Nuland at her word that it was a 5 billion buck CIA financed coup. I thought I was reading TIME Magazine

Sun, 06/22/2014 - 21:53 | 4884302 The_Prisoner
The_Prisoner's picture

Those must have been some killer cookies.

Hey, i'm trademarking the name: Vicky Nuland's Crazy CookiesTM people will set their cities on fire for them.

The packaging will show the picture of the Maidan Children making molotov cocktails to set people on fire in Odessa: http://ukraine-human-rights.org/odessa-ukraine-right-sector-and-maidan-activists-murder-at-least-43-persons/crghw-qkqpw/

 

Sun, 06/22/2014 - 21:19 | 4884250 greatbeard
greatbeard's picture

>> is the cost in energy to

Ethanol proved that energy costs in production doesn't matter. 

Sun, 06/22/2014 - 21:58 | 4884324 gatorengineer
gatorengineer's picture

You think the government is going to subsidize LNG exports?  Ethanol is around because its corporate wellfare for big agriculture nothing more.

Sun, 06/22/2014 - 22:31 | 4884395 bonin006
bonin006's picture

Ethanol proved that energy costs in production doesn't matter to politicians buying votes with other people's money.

Sun, 06/22/2014 - 23:29 | 4884550 Canadian Dirtlump
Canadian Dirtlump's picture

We will see how strong the nat gas lobby is compared with the corn mafia.

Sun, 06/22/2014 - 23:27 | 4884548 Canadian Dirtlump
Canadian Dirtlump's picture

First off if this was a priority for the US or Canada the development of the infrastructure would have been in process. Which it hasnt been.

 

They should have been pushing nat gas as a surface fuel but have not. Now I can tell you as an exec at a pipeline company in alberta that the only gas wells being drilled here are wet gas so they can pay for them with distillates. I personally know several owners of junior gas plays with shut in production due to prices. With conventional and unconventional gas fields we have an almost incomprehensively stratospheric supply. 10 years ago every pipeline we did was gas now we do virtually none.

 

As normal we have a tone deaf political class and self serving financial sector who have teamed up to fail in a spectacularly paralyzing way such that the answer is years away.

Sun, 06/22/2014 - 21:48 | 4884295 CrashisOptimistic
CrashisOptimistic's picture

oilprice.com returns to its worthlessness roots.

 

In general, guys who have been blah blah blah for twenty five years or blah blah blah for 17 years are working with an embedded mindset of abundance.

Oil's 107.30 on the Asian futures this moment.  That's all about abundance, I guess.

These guys cannot wrap their minds around the question . . . if Russia sends gas to China, and Everyone Else is sending gas to China, and US gas can't possibly get across the Atlantic (assuming there's a surplus, US nat gas storage for this time of year is at all time lows this moment) where the FUCK are these European countries going to get gas?

Chinese consumption is insatiable.  India is following close behind.

Sun, 06/22/2014 - 21:50 | 4884303 Skateboarder
Skateboarder's picture

Appreciate the post. Note that ZH 'doesn't read' Michael Synder's Economic Collapse Blog but posts liberally from there anyway. Uhuh.

Sun, 06/22/2014 - 23:43 | 4884562 Canadian Dirtlump
Canadian Dirtlump's picture

Price solves all problems. With a coherent political policy, a proper market price and infrastructure North America has a staggering amount of nat gas ( conventional unconventional, low pressure high pressure).

 

Dont forget dear friend. We flare as much gas into the air as we sell.

 

Edit. Eg. In saskatchewan most gas is simply flared to the air. That changes this year and you will see a bunch of gas being gathered for market which before was burned to the hapless oblivion. This is like alberta. Years ago gas was largely flared but now you get a 30 day flare permit then need to tie it into a gathering system. Again. We burn into the air in north america as much gas as we sell. It could and should be a game changer. Do that math.

 

As i said before i have seen the bids for massive gas plants and gathering systems in areas where before the gas was just lit into the air. If it becomes a political priority we will, steady state without trying, have a gas revolution the likes of which heretofore would have bèen localized to a koch brothers mental masturbation session.

Mon, 06/23/2014 - 01:12 | 4884690 ebear
ebear's picture

Just as Russian gas will go to China, so too will Canadian gas via the west coast.  Better deal for Canada than selling it to the US.

One thing that doesn't get much attention in this debate is that sooner or later, the US will have to import LNG.  So, maybe having the export facilities in place isn't such a bad idea, as they can quickly be converted to import.  Is that the real story here?  Building import facilities under the guise of exporting NG that isn't really there?

Mon, 06/23/2014 - 01:22 | 4884706 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

Listen, the LNG economics are terrible...It’s a low-margin, high risk, short-term supply of gas to Europe. This is not a play for smart investors who are looking to not get fucked quickly. This is a play for investors who like getting fucked with longer-term vision, patience and strategic capabilities on a regional level. People like me are the people who are going to make money off of this by fucking people like you, and, along the way, people like me will help the banksters reshape the balance in Europe away from Russia.

Mon, 06/23/2014 - 05:40 | 4884842 pitz
pitz's picture

You simply do not know what you are talking about, there is minimal, almost no flaring of natural gas in Saskatchewan, and hasn't been for decades.  When flaring happens, its actually a fairly big news item.

Mon, 06/23/2014 - 10:53 | 4885513 Canadian Dirtlump
Canadian Dirtlump's picture

http://www.theglobeandmail.com/report-on-business/rob-magazine/the-glari...

 

Right. Where does the gas go then? There are no gas gathering systems there ( estevan inter alia ), virtually every well is tied into a shitty 400bbl tank with fiberglass line. Where are the gas plants if they capture the gas? Nowhere that's where.

 

there is new laws coming into effect soon like I have said before, http://www.nr.gov.nl.ca/nr/cfvrf/forum/gasflaring.htm. NOt coincidentally there are a couple of large gas projects on the horizon.

 

So you don't know what the fuck you're talking about, Dwayne.

Sun, 06/22/2014 - 20:45 | 4884172 NoDebt
NoDebt's picture

Cooter, you silly goose!  That's what wind and solar are for- liquefying natural gas!

Sun, 06/22/2014 - 21:32 | 4884271 disabledvet
disabledvet's picture

This is being done in the Netherlands...and no "this is no joke." (or i should say "the joke is one you" hahahahaha.)

The Netherlands also has one of the largest gas fields in the world. So simply put "the problem is not the cut off in gas but the cut off in capital" something this article simple ignores.

Wind power absolutely has the ability to be the true game changer...but the price collapse your talking about would be truly epic. With Alstom now in the hands of General Electric can there be any doubt that the future really is in the turbine business?

And of course that means a lot of copper.

Coal is still the best per btu per amount of btu to get out of the ground (depending on type and grade of course.) The number of ships currently "bottled up" in Australia to get all those resources out is truly astounding. At some point even Australia might want to start making some money and maybe strike the ore instead of depleting it.

In the meantime the importance of natural gas has been as a feedstock in the chemical business...and not with the "liquification regime." The USA is light years ahead of anyone else in its development and deployment of the most extensive petro-chemical complex in the world.

You can "default" to electricity...but that's very expensive...and "the gas" itself has "impurities" which may be of great value.

http://businessjournaldaily.com/drilling-down/one-gas-processing-plant-c...

Sun, 06/22/2014 - 22:51 | 4884451 Flakmeister
Flakmeister's picture

CC, it is a little better than that, liquification is about 13% another 5% blow off in transit...

Mon, 06/23/2014 - 00:41 | 4884652 sushi
sushi's picture

And some of that transit blow off is captured and used to provide ship board services which reduces other energy inputs.

Mon, 06/23/2014 - 01:00 | 4884678 agent default
agent default's picture

%5 blow off in transit?  Isn't methane a greenhouse gas?  Now where are all those environmentalists going ape about this.

Mon, 06/23/2014 - 02:44 | 4884772 Flakmeister
Flakmeister's picture

You haven't been watching closely...

Sun, 06/22/2014 - 23:18 | 4884531 BlindMonkey
BlindMonkey's picture

I had hear that there was about a 50+% price premium for LNG. Gazprom could still price their pipeline delivered supply lower on an actual (not subsidized) basis than any LNG supply. I can see diversifying to lower supply risk but price is price and the lowest gets the deal in a "free market".

Mon, 06/23/2014 - 07:53 | 4884953 Crazy Or Not
Crazy Or Not's picture

Canada is heading to broke - well according to its cost of homes to incomes ratios.
No concerns there on digging up/laying waste to artic to fund yard sale /children/ everything sale to claw back.
And Canada's Southern neighbor pulls the levers anyhow.

Remember this....

https://www.youtube.com/watch?v=Gy3RUDl_YnU

Iraq was a side show....
Gas prices

Sun, 06/22/2014 - 20:39 | 4884158 Escrava Isaura
Escrava Isaura's picture

Don’t waste your time, or your comment, here. This whole article is a joke.

Sun, 06/22/2014 - 20:49 | 4884177 NoDebt
NoDebt's picture

I'm not laughing.  It's their plan and it will be paid for by government subsidies.  The money side always works out with enough government subsidies.

Sun, 06/22/2014 - 21:04 | 4884226 Escrava Isaura
Escrava Isaura's picture

Instead, check the link below…. It’s brilliant.

http://patzek-lifeitself.blogspot.com/2014/06/the-future-of-engineering-education.html

 

Sun, 06/22/2014 - 22:03 | 4884334 gatorengineer
gatorengineer's picture

Its not at all brilliant, its actually dead wrong, in light of recent changes.  With Obama socializing college education 20 years at 10%  or 10 years at 10% if you work for the giverment, the number of professional students will explode.  Since paying for it doesnt matter anymore, bragging rights to draw students in will be all thats left....  University of Southern Podunck can now charge 40k a year.... same as berkley

Sun, 06/22/2014 - 21:58 | 4884323 sangell
sangell's picture

Pipelines seem to be far more vulnerable than LNG tankers

Sun, 06/22/2014 - 20:22 | 4884116 knukles
knukles's picture

Has anybody any real fucking idea about how long it will even take to get environmental permitting passed for any one terminal let alone meaningful capacity?
Jesus H folks....

Why don't we try for a pipeline?  Or a tunnel.  Yeah, a tunnel.  Or tell the fuckers to go solar.  Yeah, go fucking renewable and solar like Obie & Cie want us to do. 

Having a Lewis Black moment

Sun, 06/22/2014 - 21:17 | 4884243 CrazyCooter
CrazyCooter's picture

The answer is "forever" ... just look at north slope gas in Alaska ... they have been trying to get a damn pipeline built for decades! And it is for all intents and purposes in the middle of f-ing nowhere.

There is no way in hell this has any traction at all ...

On that note, the shell floating LNG plant is genius for this exact reason. It bypasses all the BS and when they tap out the resource they just relocate to a new one. THAT is the future of LNG.

Regards,

Cooter

Sun, 06/22/2014 - 22:01 | 4884330 sangell
sangell's picture

Cove Point and Sabine Pass have gotten their licenses. As long as US gas prices stay under $7 or so I don't see any pressure to stop LNG exports.

Sun, 06/22/2014 - 22:49 | 4884448 bonin006
bonin006's picture

But Russia would have sold gas to Ukraine for $3.85 if they would have stopped whining and paid up. With the 30% energy loss from compression, LNG would need to sell for more than 50% above the non-LNG price. $7 x 1.5 = $10.50. Ukraine can't afford $3.85. Maybe if I had a PhD in economice from Princeton I could understand how $10 LNG will save them.

Mon, 06/23/2014 - 02:19 | 4884752 sangell
sangell's picture

Maybe if you knew the price of gas in Europe is now $11 and the US price is $4.50 you would be a rich man instead of an idiot.

Sun, 06/22/2014 - 22:31 | 4884383 HardlyZero
HardlyZero's picture

Gen III and Gen III+ nuclear plants probably are in the long-term running vs. LNG.

Just have to make sure the plant backup cooling systems are 100% reliable under any/all conditions including 50 meter Tsunami for 1 day, plenty of redundancy, and local battery emergency backup.

(7 of 11 shut down correctly at Fukushima...and it was really the diesel backup generators that got washed out to sea).

 

If modern (and even Gen IV) nuclear energy picks up then LNG might have more competition in Europe.

That is probably the correct comparison.

Sun, 06/22/2014 - 21:57 | 4884321 Taint Boil
Taint Boil's picture

 

 

Riiiight, stopped reading when I got to OilPrice.com

The Absurdity of US Natural Gas Exports
Sun, 06/22/2014 - 22:00 | 4884327 ebear
ebear's picture

Not a joke if you owned Cheniere (NYSE-LNG) these last 3 years.

TK LNG Partners (NYSE-TGP) not looking too shabby either.

Mon, 06/23/2014 - 05:36 | 4884838 pitz
pitz's picture

I concur, who on Earth is going to invest in something so stupid when there's oceans of Russian natural gas supply sitting in the region, available if only Russia actually gets paid.  If the Ukrainians and other eastern Europeans can't pay Russia for what they use, they sure as heck aren't going to be able to pay North American suppliers the dramatic premium that LNG costs to put into tankers and ship overseas. 

The whole idea of LNG to supplant Russian natural gas is idiocy at its finest.  European energy consumers simply need to pay their gas bills, and all will be well.  If they can't, well, that speaks to over-consumption relative to the capacity of their economy to produce.

Mon, 06/23/2014 - 07:02 | 4884899 Crazy Or Not
Crazy Or Not's picture

LNG is a space filler.
We know Qatar is sponsoring revolution in Syria for Qatar pipeline to Europe via Levant.
A stable Syria will also export its own and from elsewhere.

Europe is a market and the players are chasing it.

Gazprom /Putin have moved East for these reasons - and will tap into a 1.7billion consumer market....yeah they must be pissed! (sarc) Their boss continue the rearguard action of their withdrawl. Income is income wherever it comes from so take it while you can....?

God why do we have to pull the stops out to illustrate the bigger picture - naively I used to think ZH was for that. Eventually I realised it was to gather the database of where to target the Reapers.

Oh well time to move to Location Zulu.

 

Do NOT follow this link or you will be banned from the site!