Hello Europe, Especially Germany
Hello Europe, the US Threatens to Shut Off Energy Exports.
America’s allies in Europe are desperate for alternative supplies of fuel amid the Ukraine war, and U.S. producers are happy to provide what they can. So wouldn’t you know the Biden Administration now wants to limit fuel exports.
That’s the message Energy Secretary Jennifer Granholm sent last week in a letter imploring seven major refiners to limit fuel exports. We obtained a copy of the letter, which the Administration didn’t release publicly. Ms. Granholm warns that gasoline inventories on the East Coast are at a near-decade low, and diesel stocks are nearly 50% below the five-year average across the region.
“Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports,” she writes.
“Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports,” she writes.
“It is our hope that companies will proactively address this need,” she adds. “If that is not the case, the Administration will need to consider additional Federal requirements or other emergency measures.”
What a Hoot!
Biden runs down the Strategic Oil Reserves for political, not economic reasons, and now threatens exporters.
The WSJ points out “Fuel storage levels would be much higher in the Northeast if not for New York state’s natural gas pipeline blockade, which has made the region more dependent on oil for energy. One-third of New England residents still use oil to heat their homes, and New York this month is generating more electricity from oil than from solar or wind.”
Natural Gas Ripping Higher
Here we are, headed into hurricane season, with the administration having run down oil reserves.
Meanwhile, natural gas prices are ripping higher.
Since August 2, the price of natural gas is up 21.8 percent.
The Average US Household Pays 47 Percent More for Electricity Than a Year Ago
On August 21, I noted The Average US Household Pays 47 Percent More for Electricity Than a Year Ago
Heaven help the EU if Biden issues a mandate shutting of all energy exports.
Given the price of gasoline has mostly stabilized for August, but electricity hasn’t and rent likely hasn’t, don’t expect another “no inflation” reading in the next CPI report.
This post originated at MishTalk.Com
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The trading firm also said that U.S. natural gas prices could climb further up as well, close to $12 per million British thermal units in the not-too-distant future.”
“Earlier this year, investment firm Goehring & Rozencwajg forecast that U.S. natural gas prices were about to take off after European ones before too long. The reasons for the surge were overall tight gas supply and U.S. producers’ new central role as biggest suppliers to Europe. Also, Goehring & Rozencwajg predicted U.S. gas production was nearing a plateau.
“Asian and European natural gas prices stand at $35 per mmbtu, versus $8.20 per mmbtu here in the United States. Given the underlying fundamentals that have now developed in US gas markets, we believe prices are about to surge and converge with international prices within the next six months,” Goehring & Rozencwajg said in May.”
“We are beginning to see a lag in storage builds that could lead to a precarious situation during the draw season in the event of a harsher-than-expected winter,” Neal Dingmann, energy equities analyst at Truist Securities, told the Wall Street Journal. “There is potential for a winter U.S. superspike.”
A superspike in gas prices in the U.S. will be really bad news, and not just for the U.S. itself. Europe literally depends on American liquefied gas as it seeks to sever all trade ties with Russia.”
“According to Goehring and Rozencwajg’s analysis based on production patterns from the Barnett and Fayetteville shale plays, Marcellus could be close to peaking and plateauing before production begins to decline—production there could reach a plateau within the next 12 months. This would be bad news because, after the plateau, shale gas plays seem to go straight into a sharp production decline. That sharp decline could begin in 2025.
The situation is not much different for the Haynesville shale play, although production growth patterns there have been less linear than those in the Marcellus. Even so, the authors expect gas production there to reach a plateau by October 2023.
In other words, within the next year or so, shale plays that account for 40 percent of U.S. gas production may well reach the peak of production rates and soon after begin declining. Demand for LNG, meanwhile, is very likely to remain as strong as it is now, if not stronger—after all, the EU is in a mad rush to reduce all imports from Russia. The current gas price rise in the U.S., then, may also be only the beginning of a sustained price rally.”
I know it was under Obama that let the energy exporters go crazy by allowing exporters loose from the restrictions from the 70’s, that then led to the cheap energy under Trump he was so happy to take credit for, so they’re all guilty, but if anything, government should reign in the corporations and this practice.
US corps exist through the legal protections and military enforcement of the US – they should at least place the US first in kind.