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Mon Dec 10, 2012, 06:43 PM

So much for the "energy independence for 100 years" meme - US frackgas to go overseas

which will likely raise domestic prices. But don't worry, American oil billionaires' increased revenues will trickle down to y'all.



Geopolitics Likely to Trump Economics In US LNG Export Question


"Last week, U.S. Gulf of Mexico natural gas exports took a step closer to reality with the release of NERA Economic Consulting’s study for the U.S. Department of Energy concluding that the economic benefits (including wealth transfer affects) from liquefied natural gas (LNG) exports from the U.S. Gulf coast will outweigh the losses from “reduced capital and wage income to U.S. consumers.” According to NERA, middle class Americans (or in NERA-speak, “households with income solely from wages and transfers”) may pay more for residential natural gas use and as will probably certain energy intensive industry/manufacturing industries. But U.S. GDP would also increase as a result of LNG exports, especially from added activity related to investment in export facilities and tolling charges, according to NERA. The report calculates that initial exports of U.S. LNG exports will be between zero to 33 cents per 2010$mcf and rise to as much as 22 cents to $1.11 2010$mcf in five years, depending on varying assumptions about the U.S. supply curve for future natural gas production. NERA places its analysis in the context of positive economic theories about the benefits of removing barriers to trade and suggests that the effects of LNG exports on particular businesses or consumers will not lead to a net loss of jobs.

The question of the price impacts of U.S. LNG exports is highly dependent on the ultimate size and cost of U.S. shale resources. Some alternative studies to NERA suggest that the U.S. supply curve will be relatively flat, leaving little impact to U.S. domestic prices but possibly putting so much pressure on international LNG prices that the U.S. export trade will not be profitable.

It is probably too early to know for sure what the exact scale and costs of U.S. shale resource development will be in the coming five years. Uncertainties abound on many levels, and not just of a geological nature where the size of the resource does seem to imply a relatively flat supply curve at fairly low prices. There will also be environmental and social barriers to shale development in certain parts of the United States and those will almost certainly affect the pace of development. Moreover, a burgeoning trade in natural gas for transportation, including a nascent LNG trucking network that is already absorbing imported Trinidadian LNG, could also influence the trend line for U.S. domestic demand and prices. Similarly, one cannot rule out a producer price war scenario might emerge, should global gas markets get overly saturated."

http://theenergycollective.com/amjaffe/154776/geopolitics-likely-trump-economics-us-lng-export-question?utm_source=feedburner&utm_medium=feed&utm_campaign=The+Energy+Collective+%28all+posts%29

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Reply So much for the "energy independence for 100 years" meme - US frackgas to go overseas (Original post)
wtmusic Dec 2012 OP
physioex Dec 2012 #1
limpyhobbler Dec 2012 #2
Nihil Dec 2012 #3
wtmusic Dec 2012 #4

Response to wtmusic (Original post)

Mon Dec 10, 2012, 06:57 PM

1. I knew it....

Last edited Mon Dec 10, 2012, 11:38 PM - Edit history (1)

Most conservatives (the sheeple mostly) do not understand basic economics, the concept of what is a commodity and that petroleum products are fungible.

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Response to wtmusic (Original post)

Mon Dec 10, 2012, 09:58 PM

2. k&r

- the old bait and switch

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Response to wtmusic (Original post)

Tue Dec 11, 2012, 06:48 AM

3. Nice framing there too ...

> Geopolitics Likely to Trump Economics

No, economics is likely to trump naivety - geopolitics doesn't come into the match.

The economics in play - which have *always* been in play despite the alleged politics
of the players - are simply that profit rules all. All of the various gift-wrapping ("energy
independence", "clean coal", "clean natural gas", "green energy") is just a dust trail
laid down to distract the attention of the herd while the predators do what they've
always done: prey.

Anyone who believes otherwise is either lying or deluded.

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Response to Nihil (Reply #3)

Tue Dec 11, 2012, 12:03 PM

4. Author is editor of Petroleum Intelligence Weekly

so all the code words are in play.

It used to be people were subjected to environmental abuses in foreign countries so we could buy their products.

Shoe's on the other foot.

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