Demand for Natural Gas Brings Big Import Plans, and Objections - New York Times
Tar sands from Canada and Natural Gas from Qatar are moving to the US. The growth in use of LNG is huge. We import double the amount in just two years. The energy bill approved by the house and the Senate Energy Committee includes provisions to dramatically increase the importation of LNG. LNG cost about half per BTU than oil!
A few years ago, who cared about Canadian tar sands? A few years ago, who would want to invest billions on LNG ships and terminals? We have known that there is probably much more oil in Canada than in Saudi Arabia. Now we are willing to pay enough to dig up the sand and squeeze out the oil. Fifty dollars per barrel makes billions of tons of sand worth squeezing.
Investors are making the mistake of fearing inflation. They do not understand that oil at $55 is not inflationary. The price per barrel is lower now than it was months ago. Yes, oil could go to $80, but labor is the biggest inflation factor and labor rates are increasing moderately. Capital costs are also moderate. Oil could go to $80, but folks around the world are buying more fuel efficient cars and production of energy is increasing.
Supply meets demand at a price; the world wide economic expansion is too strong to suggest moderating oil prices in the near term. Lower consumer demand and increasing supplies will moderate increases in the near term. Over the long-term, with history as our guide, we can be thankful that energy inflation will average less than wage inflation. Standards of living will continue to rise as we become more and more efficient in the use of energy. Open flame fire places hold a nostalgic place in many hearts but the total cost of heating a home today is a small fraction of the total cost of years gone bye.
BUY THE BIG BULL MARKET! HIGH ENERGY COSTS ARE NOT A SIGN OF ECONOMIC WEAKNESS BUT A SIGN OF ECONOMIC STRENGTH. AGRESSIVE INVESTORS SHOULD EVEN BUY SMALL POSITIONS IN SEVERAL AIRLINE STOCKS!
OPEC HAS HAD ITS 15 MINUTES OF FAME. THE PERCENTAGE OF WORLD ENERGY CONTROLLED BY OPEC HAS DECLINED FOR 30 YEARS AT AN INCREASING RATE OF DECLINE. EVEN NATIONALIZED FIELDS IN MEXICO NEED A GOOD OLD CAPITAL INFUSION.
Buy the way, although the costs to produce ethanol have declined 50% in the past ten years, we must hope the energy bill does not offer excessive subsidies. The current federal subsidy of about 54 cents per gallon makes ethanol a competitive product, but at a high cost to the taxpayers. Furthermore, the external costs of growing corn for fuel are large. The crop requires heavy doses of pesticides and extensive irrigation. Although modern tillage methods have reduced the damage to top soils, continued farming takes a steady toll on an American valuable resource.
In regard to alternative energy sources, the public should understand that the free market price will ultimately determine which source should be used. Subsidies destort the free market and cause unintended harmful consequences. Burning biomass for fuel makes sense when there is a steady supply of excess biomass. Subsidizing the production of biomass for the purpose of producing fuel makes no sense at all. Experiments have often led to the expenditure of two gallons of fuel to produce one gallon of fuel.
INVESTOR CAN MAKE HIGH RETURNS WITHOUT GAMBLING ON THE LATEST CRAZE. A COMPANY LIKE GOODYEAR WILL MAKE MILLIONS OFF THE BIG TIRES USED IN THE DIGGING AND HAULING OF TAR SANDS! BUY THE BULL!
Tar sands from Canada and Natural Gas from Qatar are moving to the US. The growth in use of LNG is huge. We import double the amount in just two years. The energy bill approved by the house and the Senate Energy Committee includes provisions to dramatically increase the importation of LNG. LNG cost about half per BTU than oil!A few years ago, who cared about Canadian tar sands? A few years ago, who would want to invest billions on LNG ships and terminals? We have known that there is probably much more oil in Canada than in Saudi Arabia. Now we are willing to pay enough to dig up the sand and squeeze out the oil. Fifty dollars per barrel makes billions of tons of sand worth squeezing.
Investors are making the mistake of fearing inflation. They do not understand that oil at $55 is not inflationary. The price per barrel is lower now than it was months ago. Yes, oil could go to $80, but labor is the biggest inflation factor and labor rates are increasing moderately. Capital costs are also moderate. Oil could go to $80, but folks around the world are buying more fuel efficient cars and production of energy is increasing.
Supply meets demand at a price; the world wide economic expansion is too strong to suggest moderating oil prices in the near term. Lower consumer demand and increasing supplies will moderate increases in the near term. Over the long-term, with history as our guide, we can be thankful that energy inflation will average less than wage inflation. Standards of living will continue to rise as we become more and more efficient in the use of energy. Open flame fire places hold a nostalgic place in many hearts but the total cost of heating a home today is a small fraction of the total cost of years gone bye.BUY THE BIG BULL MARKET! HIGH ENERGY COSTS ARE NOT A SIGN OF ECONOMIC WEAKNESS BUT A SIGN OF ECONOMIC STRENGTH. AGRESSIVE INVESTORS SHOULD EVEN BUY SMALL POSITIONS IN SEVERAL AIRLINE STOCKS!
OPEC HAS HAD ITS 15 MINUTES OF FAME. THE PERCENTAGE OF WORLD ENERGY CONTROLLED BY OPEC HAS DECLINED FOR 30 YEARS AT AN INCREASING RATE OF DECLINE. EVEN NATIONALIZED FIELDS IN MEXICO NEED A GOOD OLD CAPITAL INFUSION.
Buy the way, although the costs to produce ethanol have declined 50% in the past ten years, we must hope the energy bill does not offer excessive subsidies. The current federal subsidy of about 54 cents per gallon makes ethanol a competitive product, but at a high cost to the taxpayers. Furthermore, the external costs of growing corn for fuel are large. The crop requires heavy doses of pesticides and extensive irrigation. Although modern tillage methods have reduced the damage to top soils, continued farming takes a steady toll on an American valuable resource.
In regard to alternative energy sources, the public should understand that the free market price will ultimately determine which source should be used. Subsidies destort the free market and cause unintended harmful consequences. Burning biomass for fuel makes sense when there is a steady supply of excess biomass. Subsidizing the production of biomass for the purpose of producing fuel makes no sense at all. Experiments have often led to the expenditure of two gallons of fuel to produce one gallon of fuel.INVESTOR CAN MAKE HIGH RETURNS WITHOUT GAMBLING ON THE LATEST CRAZE. A COMPANY LIKE GOODYEAR WILL MAKE MILLIONS OFF THE BIG TIRES USED IN THE DIGGING AND HAULING OF TAR SANDS! BUY THE BULL!
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