Speaker 1: With a round segle end from London and Gerard read
Speaker 1: from Berlin.
Speaker 2: This is redefining energy.
Speaker 3: Today on refain ergy job. It's the crisis in the
Speaker 3: Middle East and we want to understand what's happening to
Speaker 3: the energy market.
Speaker 4: Absolutely looking forward to this conversation. Crazy times we live.
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Speaker 3: Back to the show. Yeah, I mean there are so
Speaker 3: many scenarios, so many experts with our opinion, but too
Speaker 3: We've decided to bring someone really know something about the
Speaker 3: energy market, and that's Ira Joseph, who is a leading
Speaker 3: global gas analyst. It was at SMP Global and now
Speaker 3: he's at Columbia Center on Global Energy Policy.
Speaker 4: Well, let's bring them on the show.
Speaker 3: Ira, welcome to the show.
Speaker 2: Thank you, Lora, so nice to be here. I'm excited
Speaker 2: to talk about this. It's even today, It's been quite
Speaker 2: a day.
Speaker 4: No, I listen every day there's something new. Just can't
Speaker 4: keep up about that crazy.
Speaker 3: Yeah, I want to go back a bit how it
Speaker 3: started and talking about the general sculpture of the energy market.
Speaker 3: So Ira, can you explain a bit what's the energy market?
Speaker 2: Well before two weeks ago, the LERG market was in
Speaker 2: a very sort of clear place. It was going to
Speaker 2: expand by fifty percent over the next five years in
Speaker 2: terms of supply, and that was kind of everyone who's
Speaker 2: anticipating that coming and whether the question wasn't whether there
Speaker 2: was going to be a glot of LERG, the question
Speaker 2: was when sort of the glot was going to apply.
Speaker 2: And basically what was happening was that the US was
Speaker 2: going to produce a lot more energy, Qatar was going
Speaker 2: to produce a lot more ENERG, and then there were
Speaker 2: going to be bits and bobs elsewhere around the world
Speaker 2: of other countries that were going to produce more LNG.
Speaker 2: It guess us this fifty percent increase in a five
Speaker 2: year period, that was sort of what was going to happen.
Speaker 2: And obviously, when you increase the size of a market
Speaker 2: that quickly and sh such a short period of time,
Speaker 2: the question seemed to be about what the implications that
Speaker 2: would be for price, because it's very hard to grow
Speaker 2: demand that fast, and how is the market going to
Speaker 2: balance that much supply coming to the market fast forward
Speaker 2: to I don't know, let's say we're two weeks ago,
Speaker 2: a little over two weeks ago. We're in a totally
Speaker 2: different situation now because for the second time in less
Speaker 2: than four years, one of the largest LNG slash gas
Speaker 2: exporters in the world is basically off the market. It
Speaker 2: completely rewrites the script, just as it did in twenty
Speaker 2: twenty two, and it brings us here today. You know
Speaker 2: where we are where Qatar, which is one of the
Speaker 2: largest LG exporters in the world as seventy seven million
Speaker 2: tons was going to be expanding tow one hundred and
Speaker 2: forty five million tons by the early next decade, are
Speaker 2: completely offline. We have no idea when they're going to
Speaker 2: come back. And this could last for a while if,
Speaker 2: particularly after what happened today, you know, I would sort
Speaker 2: of lean more on the side of it lasting a
Speaker 2: little bit longer than I had been before I woke
Speaker 2: up this morning because the attack on the South far
Speaker 2: As gas field, which Lauran, as you know, is the
Speaker 2: same thing as the northfield in Qatar, has really put
Speaker 2: not just Ros Lafon into play in Qatar, but also
Speaker 2: the dozen or so production platform gas and condensate production
Speaker 2: platforms and Qatar. And it's over two hundred wells that
Speaker 2: have been drilled and that we're producing until recently on
Speaker 2: the Qatari side, So that situation is obviously in a
Speaker 2: state of flux. Iran has even announced in the past
Speaker 2: few minutes while we were sitting here that they've cut
Speaker 2: their gas exports to Iraq. If they haven't cut their
Speaker 2: gas exports to Turkey, which are about eight pscm a year,
Speaker 2: so that's around twenty two mmcm a day, they're gone. Also,
Speaker 2: we're in a situation where we don't know what's going
Speaker 2: to happen. Thought prices at least in Asia and in
Speaker 2: Europe are pushing twenty dollars per million BTU, while in
Speaker 2: the US, because it's really constrained on how much it
Speaker 2: can export via LNG, are still around three dollars per
Speaker 2: million BTU, so we have this incredibly widespread, this incredible
Speaker 2: incentive for obviously US LNG producers to export and really
Speaker 2: cash in here. Whoever is lifting that cargo's fob is
Speaker 2: going to do really well. As I like to say,
Speaker 2: sometimes people are going to make more money in the
Speaker 2: year than they had expected to make probably in the decade.
Speaker 2: So depending on how long this lasts. Obviously very bullish.
Speaker 2: If you can produce lerg right now and it's it's
Speaker 2: not if you can't produce lerg right now.
Speaker 3: Well what an introduction. Probably take a bit of a
Speaker 3: step back and explain to our listener, which are not
Speaker 3: expert as you are, and you're going to you know,
Speaker 3: you talk about MBTU, you talk about turn we are
Speaker 3: BCF and I know that that's really how the guest
Speaker 3: market works. But explain the pricing mechanism around the hubs
Speaker 3: because we have LNG regions, and of course that as
Speaker 3: an impact if you are an exporter, if you are
Speaker 3: an importer, and then we could go into details of
Speaker 3: really from the importing country, because I understand that the
Speaker 3: one who websur plus they're going to make a fortune,
Speaker 3: but the one who needs to import might find themselves
Speaker 3: in a really dire position, very.
Speaker 2: Very soon, That's right. So I guess the equation that
Speaker 2: we have to figure out here is if we've lost
Speaker 2: seventy seven million tons per year of Katari LNG, we
Speaker 2: have to figure out how to lose seventy seven million
Speaker 2: tons of demand going forward. So let's just start with
Speaker 2: price and then we'll get into how that balances. There
Speaker 2: are three important gas bot prices in the world right now.
Speaker 2: There's the price of Henry Hub, which is a pipeline
Speaker 2: gas price in the US, and that price is used
Speaker 2: in Louisiana as an indexation for how US gas is
Speaker 2: turned into LERG and how LLERNG is exported to the
Speaker 2: rest of the world. Even though it's a pipeline price,
Speaker 2: it's to use basically as the benchmark at least for
Speaker 2: now for LNG cargoes that leave the US Gulf Coast
Speaker 2: and even leave the East Coast of the United States
Speaker 2: as well. Men there's the other two markets, which are
Speaker 2: in Europe and Asia, which are the net importing markets
Speaker 2: for the LNG. Europe imports LNG, and most of that
Speaker 2: LNG is index to a price called TTF, which is
Speaker 2: a title transfer facility, not an unfortunately bad name, which
Speaker 2: is basically the Dutch spot market price, and the Dutch
Speaker 2: spot market price is essentially the benchmark price for Europe.
Speaker 2: Right now, LNG cargoes that are sold from the US
Speaker 2: are anywhere into Europe, most of them, a vast majority
Speaker 2: of them. There are still some oil index contracts we'll
Speaker 2: get to that in a second that go into Europe,
Speaker 2: but a vast majority of them are index to this
Speaker 2: TTF price. And then finally, in Asia, there's this other
Speaker 2: price called the Japan Korea Marker or JKM price, which
Speaker 2: is a spot price for Asian LNG markets. Asia. While
Speaker 2: individual countries have pipeline markets and there is some cross
Speaker 2: border pipelines, it's not nothing like North America. It's basically
Speaker 2: a very very large LNG market and that price is,
Speaker 2: as I said, the benchmark for Asia, and that is
Speaker 2: also what we would call a spot price, where there
Speaker 2: are bidden asks every day and cargoes are traded at
Speaker 2: hand every day. Now, the interesting thing about the LNG
Speaker 2: market is that the origins of the LNG market had
Speaker 2: none of these prices, and before these prices existed, most
Speaker 2: of the LNG going all the way back to the
Speaker 2: nineteen sixties was indexed to oil. At first, it was
Speaker 2: indexed off of Oman in Dubai crude prices, and more
Speaker 2: or less most of anybody who's indexing oil off of
Speaker 2: oil anymore, which is largely the Qataris and some other
Speaker 2: producers as well, they use the price of Brent crude
Speaker 2: to index to oil. And how that pricing works is
Speaker 2: you have a Brent price any day and then what's
Speaker 2: called a slope is applied to it, which is basically
Speaker 2: a percentage of Brent, which does two things. It discounts
Speaker 2: the gas relative to oil, and it also converts the
Speaker 2: equation from dollars per bare to dollars per million b
Speaker 2: to you. Typically an LNG oil index price with a slope.
Speaker 2: At the high end it'll be like fourteen and a
Speaker 2: half to fifteen percent of brand, and at the low
Speaker 2: end it'll be at nine to ten percent of brand.
Speaker 3: So the slope the calculation is the following. If the
Speaker 3: barining of oil is at one hundred and it takes
Speaker 3: a twelve percent slope, then you will get your LNG
Speaker 3: at twelve dollars p MMBBCU plus probably the liquefation cost
Speaker 3: and the transportation cost.
Speaker 2: No, no, no, that would be the delivered price of
Speaker 2: the LNG. If you were to do an FOB price,
Speaker 2: you'd have to net out the transportation, and then if
Speaker 2: you wanted to net out the liquefaction you could do
Speaker 2: that too, although on a short run marginal cost basis,
Speaker 2: nobody would really do that. It's basically the price either
Speaker 2: minus the freight or plus the freight, depending on where
Speaker 2: you're lifting the cargo. But yes, one hundred dollars barrel
Speaker 2: oil is twelve dollars per million BTU gas. Sometimes people
Speaker 2: added what's called a constant to that price. That can
Speaker 2: be anywhere from fifty descents to whenever you want it
Speaker 2: to be to make some price adjustment.
Speaker 3: Today the twelve dollars, that is if you have well, first,
Speaker 3: if you can get the category gas. But if we
Speaker 3: see that the spot is at right now eighteen or nineteen.
Speaker 3: Now we have people in Europe they say, I don't
Speaker 3: understand what you say eighteen nineteen. It is because in
Speaker 3: Europe we trade in mega what I are. So you
Speaker 3: need to convert your to dollar and then you need
Speaker 3: to divide by three point four. But let's remove the
Speaker 3: mega what our price. Otherwise you better are going to
Speaker 3: be even more confused, very ex so right now, it
Speaker 3: means the spot market is even higher than those formulas.
Speaker 2: That's exactly right. The spot price is around nineteen to
Speaker 2: twenty dollars, oil index prices around twelve dollars. Promilily bto
Speaker 2: the question is going forward? You know what is the price?
Speaker 2: Is it the oil index price, is it the spot price?
Speaker 2: And what's something in the business we call the central
Speaker 2: tendency price, like what is the true price here? Is
Speaker 2: it the Katari price? And the spot price is reacting
Speaker 2: to the Kuitari price or the Katari price is going
Speaker 2: to react to the spot price. But that's a bigger
Speaker 2: sort of structural issue when things go back a little
Speaker 2: bit more than normal in the future.
Speaker 4: Can I just say, just for me just looking at it,
Speaker 4: but I'm going to compare it to the Ukrainian situation
Speaker 4: from a Europeans perspective, what we saw the Ukrainian situation
Speaker 4: was again in terms of mega what our prices, because
Speaker 4: that's the way we buy it. We were like at
Speaker 4: twenty five euros and megawat we went up to three hundred.
Speaker 4: So a present like we're at fifty five euros and
Speaker 4: what's interesting for me in all of that is storage
Speaker 4: is very very low, so the markets are present, So
Speaker 4: the gas markets are definitely not sort of feeling this
Speaker 4: possible stress that might come in the future, right, And
Speaker 4: I think i'd agree. The longer list goes on, it's
Speaker 4: not just gas, it's oil, it's you name it. We're
Speaker 4: in trouble basically full stop.
Speaker 3: Yeah.
Speaker 2: It should also point out that guitars the world's low
Speaker 2: cost LND producer as well. I mean they produce with
Speaker 2: it seven hundred thousand conon say, they have a GTL
Speaker 2: that bround one hundred to one hundred and fifty thousand
Speaker 2: gas to liquids production. So the gas is not the
Speaker 2: actually the real money maker for them. It's really these
Speaker 2: other areas within the oil market itself that are pretty significant.
Speaker 2: But like you said, these are high prices, and the
Speaker 2: question is is will Europe consume the same amount of
Speaker 2: gas at these higher prices. Now, this month, we've already
Speaker 2: seen demand go down probably about five percent, so it
Speaker 2: hasn't gone down that much, but I do expect it
Speaker 2: to go down more as we get into the lower
Speaker 2: seasonal areas of demand. Typically European gas demand peaks in
Speaker 2: the second week of February and then on a seasonal basis,
Speaker 2: drops all the way through the second week of September,
Speaker 2: and in that period of time, as you point out, Jarred,
Speaker 2: there's a lot of gas that will go into storage.
Speaker 2: This year, Europe will acquire a record amount of gas
Speaker 2: to go into storage because so little has been drawn
Speaker 2: in March so far. The amount that's going to be
Speaker 2: need to be injected is a little smaller than maybe
Speaker 2: we thought, maybe even two weeks ago, but is still
Speaker 2: It's going to be around seventy billion que meters of gas,
Speaker 2: let's say, injected into story and that is very much
Speaker 2: at the high end of what is typically needed to
Speaker 2: inject in order to get to ninety percent of utilization
Speaker 2: capacity in Europe. So I guess the question really is
Speaker 2: will we get to ninety percent utilization? And that seems
Speaker 2: somewhat unlikely to me by the end of October.
Speaker 3: So Europe is not in a great position. But I
Speaker 3: guess there are some countries in Asia it's even worse,
Speaker 3: you know, absolutely in Korea, Taiwan, India. Tell me who
Speaker 3: do you feel is the most at risk?
Speaker 4: Now?
Speaker 2: I would say the most at risk are countries in
Speaker 2: Southeast Asia, which are Pakistan, Bangladesh, Thailand, not poor countries,
Speaker 2: but poorer countries than certainly China, Japan and Taiwan, who
Speaker 2: can really sort of bid up LNG if they really
Speaker 2: need it. These countries, as you probably read in the news,
Speaker 2: already are already cutting back on potential gas demand, either
Speaker 2: by shutting schools, curbing use at factories. There's all kinds
Speaker 2: of cuts that are going on because, as I said here,
Speaker 2: the magic number here is to get rid of that
Speaker 2: seventy seven million tons a year of katari lerg on
Speaker 2: the demand side. I just sort of paper on this
Speaker 2: for the Center that's freely available on the Center on
Speaker 2: Global and Energy Policy website, where I laid out around
Speaker 2: the world where cuts would come from, and I would
Speaker 2: say it's roughly follows this sort of methodology is that
Speaker 2: a third will come from China because China has a
Speaker 2: lot of flexibility in its ability to buy LNG, because
Speaker 2: it has a lot of fuel switching capability towards coal
Speaker 2: and renewables at this point, and they could probably take
Speaker 2: off about a third of the KATARI loss. They're also
Speaker 2: the biggest contracted buyer of katari lerg in the world,
Speaker 2: so they really have to cut the most. Then I
Speaker 2: would say another third is going to come from South
Speaker 2: Asia and Southeast Asia, as I mentioned, because the prices
Speaker 2: are simply too high for the governments to afford subsidized imports,
Speaker 2: and that will lead to cutbacks again in those countries
Speaker 2: as well. You do have a bit more coal capacity
Speaker 2: that could be run, and probably this will accelerate pickup
Speaker 2: in renewables, but obviously that doesn't happen and instantaneously. That
Speaker 2: takes some time to do. And the last third will
Speaker 2: probably come from Europe and South America, where christ will
Speaker 2: continue to destroy demand as it's been destroying demand in
Speaker 2: Europe for the past five years, and actually arguably it's
Speaker 2: European demand as you know, Laurent has been actually falling,
Speaker 2: not on a steady basis, but pretty much on a
Speaker 2: peak back in two thousand and four. So demand is falling,
Speaker 2: and when Europe needs gas hits because it's replacing gas
Speaker 2: that it was getting from other places, namely Russia and
Speaker 2: then more historically from the UK and the Netherlands. That's
Speaker 2: where I see cuts coming from. The last third probably
Speaker 2: coming from Europe and a little bit from South America
Speaker 2: as well, and that's how we get rid of those
Speaker 2: the entire Katari volume. If this keeps going on for
Speaker 2: an extended period of time.
Speaker 3: Let's look about scenarios now. And I see two scenarios,
Speaker 3: one coming from the White House and the other coming
Speaker 3: from Jeff Curry with the head of Committee Research at
Speaker 3: Carlisle First and are you. I call it the little glitch.
Speaker 3: And the second scenario I call it force measure. So
Speaker 3: the little glitch, I'm just reading a tweet from President
Speaker 3: Trump today. As soon as that war is over, which
Speaker 3: will be soon, Capital will your prices are gonna drop
Speaker 3: like a rock, Capital like a rock. So that's one.
Speaker 3: And Jeff Curry and James Gutman that will have very much.
Speaker 3: Last week publish a report called you Can't Print Molecule,
Speaker 3: which is built around physical supply chalk and they say
Speaker 3: somehow it's a COVID in reverse. Okay, we face a
Speaker 3: global collapse and process are going to go to the moon.
Speaker 3: A one means the respective bomb being fizzled out within
Speaker 3: two or three weeks. Scenario two is the gott a
Speaker 3: damn Cargis bomb, Sasparsis bomb like today, Samari raslavan or
Speaker 3: muse his mind used to be hundred chips, Pudena was
Speaker 3: less than five, very poor one. So what's your current
Speaker 3: assumption of I mean, where'd you stand right now and
Speaker 3: when we'll be back to normal if normal means anything.
Speaker 2: Well, as you're saying, it's gas here anyway, But if
Speaker 2: I had a gas I would say that because soft
Speaker 2: Pars was bombed this morning, which is the Iranian side
Speaker 2: of the same field that Quitar produces gas from, I
Speaker 2: would say that our retaliation is coming, and that the
Speaker 2: upstream part of Qatar's LNG production is very vulnerable. It's
Speaker 2: right there in the Persian Gulf, and Ras Lafon itself,
Speaker 2: where the gas is turned into LNG is somewhat more fortified,
Speaker 2: but is also very vulnerable as well. My assumption right
Speaker 2: now is not no Qatari LNG for at least another
Speaker 2: three months. Just the startup process is going to take
Speaker 2: at least a month, and I don't see that we're
Speaker 2: anywhere near the end of this because whether or not
Speaker 2: the US administration wants to stop what's going on now,
Speaker 2: the Qataris are feeling somewhat emboldened and empowered to choose
Speaker 2: when they want to stop as well, and doesn't require
Speaker 2: in a world where drones can be flown into anything,
Speaker 2: it's very very hard to stop the bleeding here once
Speaker 2: the bleeding starts, So that scenario I don't see necessarily
Speaker 2: even if the US were to walk away this stopping
Speaker 2: sort of right away. Now, that is more of a problem.
Speaker 2: Eighty five percent of Katari's LNG last year went to
Speaker 2: Asia and the other fifteen percent went to Europe and
Speaker 2: South America. It's really a bigger problem for Asian markets
Speaker 2: than it is, although given LNG as a global market,
Speaker 2: a problem for one is a problem for many if
Speaker 2: you're a buyer out there. So I do think we're
Speaker 2: going to see a considerable amount of demand loss out
Speaker 2: there having to do with christ And to paraphrase JR. Curry,
Speaker 2: you can't make up new volume of LNG. Now. There
Speaker 2: is more LERG going to be produced out of the
Speaker 2: US this year, we should talk about that, but nowhere
Speaker 2: near the amount to make up for the loss of
Speaker 2: what's coming out of Katar in the unicons.
Speaker 4: I just go back to the prices. Though again, if
Speaker 4: I look at the prices, and I'm going to say
Speaker 4: that second scenario doesn't seem to be in the prices
Speaker 4: Now I'm not disagreeing, and I think I'd probably go
Speaker 4: along with your view that that probably is what's going
Speaker 4: to happen, because again, if you look at the oil
Speaker 4: price and stuff like that, you would say, again, based
Speaker 4: in the second scenario, while the prices are going to
Speaker 4: hit all time high if that scenario happens. Now, the
Speaker 4: thing that concerns me is I don't see an off
Speaker 4: ramp for Trump. That's the concerning thing. I don't know
Speaker 4: if you see one, or if I'm missing something.
Speaker 2: You know, I do not, because even if he declares victory,
Speaker 2: it's not going to stop the other side from engaging
Speaker 2: in the kind of whatever they choose to do. They're
Speaker 2: in a strong position here. We've gone from closing the
Speaker 2: straits of our moves to be this that theoretical construct
Speaker 2: that I've been worried about throughout my entire thirty five
Speaker 2: year career, to it actually happening in a way that, frankly,
Speaker 2: I don't think anybody really expected. It was always like,
Speaker 2: the Iranians could potentially shut the straits for worst, but
Speaker 2: would they really do it? Would they cut off their
Speaker 2: nose to spite themselves? And that didn't seem real and
Speaker 2: they've clearly become empowered in a way because of what's
Speaker 2: gone on to have a different level of leverage here
Speaker 2: than they had before. So I still think it will
Speaker 2: get worked out. And I still think, like I said
Speaker 2: in Laurent's scenarios, I would take the shorter scenario. Those
Speaker 2: are the shortest star than the longer scenario. The world
Speaker 2: can't burn twenty dollars familiar b to you gas, it's
Speaker 2: just too expensive. You will lose massive amounts of demand
Speaker 2: that way, which is not just a short term horrible
Speaker 2: story for gas and LNG, it's a horrible long term
Speaker 2: story too. If you're trying to export LNG to another country,
Speaker 2: it's a very bad story for you. And you know
Speaker 2: we can talk through that scenario that's sort of structurally
Speaker 2: how this can really permanently change the LNG market as well.
Speaker 3: Yes, let's pivot towards five years. Okay, because the idea
Speaker 3: of bringing you on the show when you said energy
Speaker 3: used to be expensive but reliable and now it's very
Speaker 3: expensive and unreliable.
Speaker 2: Well where did I say that?
Speaker 3: You said that like week ago, and I said that
Speaker 3: that's prettiant, So thank you. The all narrative about guys,
Speaker 3: A bridging fuel and song is just collapsing in front
Speaker 3: of our eyes. So how do you see the stretion
Speaker 3: in five years.
Speaker 2: There's two sort of not paradoxical, but there's two things
Speaker 2: that I think could happen at the same time, which
Speaker 2: would be pretty bearish if you're an LNG producer. One
Speaker 2: is this is going to trigger more LNG supply, just
Speaker 2: like the Russian invasion of Ukraine did. More projects are
Speaker 2: going to get FID because everyone's going to run around
Speaker 2: the world with a project and say, look, you can't
Speaker 2: trust the Qataris anymore. You're going to trust us. We're
Speaker 2: more reliable or more secure.
Speaker 4: You know.
Speaker 2: Whether that's true or not, who knows. But it's going
Speaker 2: to lead to more LNG because that logic, while is
Speaker 2: somewhat sound relative to katar, it may not be sound
Speaker 2: on the other side of the equation here, which is
Speaker 2: the LNG demand side. And any of you who are
Speaker 2: listening who follow me on Twitter, know that I'm somewhat
Speaker 2: skeptical about LNG demand growth going forward even before all
Speaker 2: of this happened. But what I see happening here in
Speaker 2: terms of LERG demand growth is this is obviously incredibly
Speaker 2: bullish to me, for both renewables and batteries and for coal.
Speaker 2: For coal, this sort of stretches the line for coal
Speaker 2: to be used more going forward. The average age of
Speaker 2: a coal plant in Asia is actually still pretty young.
Speaker 2: It's under twenty years, probably even quite a bit younger
Speaker 2: than that, and China is only going to double down
Speaker 2: on renewables deployment, both inside of China and out and
Speaker 2: in rough speaking, forty percent of the world's LNG is
Speaker 2: used for power generation, and well, maybe twenty years ago
Speaker 2: there was no competitive forces out there other than coal
Speaker 2: that could really challenge LNG, but now you have what
Speaker 2: I call sort of is the LNG paradox. And what
Speaker 2: the LNG paradox is is that you have the most
Speaker 2: expensive form of gas supply trying to compete in the
Speaker 2: most competitive form of gas demand, which is the power sector,
Speaker 2: and that forty percent of the world's LNG market that
Speaker 2: goes into power generation is really going to be challenged
Speaker 2: going forward because these are alternatives exist out there, and
Speaker 2: this only helps those alternatives going forward, So we could
Speaker 2: end up with more LERG supply and much much weaker
Speaker 2: energy demand growth, which that when you add that all
Speaker 2: up means weaker lergy prices longer term, assuming Katar comes back,
Speaker 2: of course, and of course the Russians too, but that's
Speaker 2: a whole other story.
Speaker 4: I think it's really more common to anything else. It's
Speaker 4: just like crazy times we're living in and it has
Speaker 4: just become unpredictable. That's where I come from. We actually
Speaker 4: just don't know what's going to happen.
Speaker 2: Nobody predicted the loss of Russian pipeline exports to Europe
Speaker 2: and Katari L and G exports to the rest of
Speaker 2: the world in the last five years. That just like
Speaker 2: totally unpredictable.
Speaker 3: So yes, if we summarize in those short the winners
Speaker 3: are North America, Russia, Australia. The big losers are India,
Speaker 3: South East Asia, Japan, Taiwan, Korea. You're not great. China
Speaker 3: very smart, does a build a lot of buffer and
Speaker 3: as can pivo from one source of energy to the other.
Speaker 3: You talk about more Noble's more COREA probably would even
Speaker 3: add more nuclear and yes, how do you see it?
Speaker 2: China is more of a winner. I would put them
Speaker 2: sort of more where North America is while they're taking
Speaker 2: the electro state path rather than the petro state path.
Speaker 2: They're a winner here because even if every country in
Speaker 2: the world who imports LERG now or who aspires to
Speaker 2: import energy cuts their growth outlooked by twenty percent, that's
Speaker 2: a big change that shifts towards both renewables and coal
Speaker 2: in the overall balance going forward. So the North American
Speaker 2: gas market is also a big winner here, not just
Speaker 2: North America, because not only do I think LNG exports
Speaker 2: are going to grow and more projects will get done,
Speaker 2: which will support US gas prices. Some of the damage
Speaker 2: we've seen in the data center market and the idea
Speaker 2: of housing data centers outside your own country is going
Speaker 2: to be called into question as well. We saw certainly
Speaker 2: the Amazon knockout in the Persian Gulf that happened last week,
Speaker 2: and data security and having to cite data centers within
Speaker 2: the borders of your own country may also come in
Speaker 2: and I think that also is somewhat bullish for gas
Speaker 2: if you are producing gas. Also, kupude potentially bullish for
Speaker 2: LNG markets as well, because data centers and the whole
Speaker 2: data business itself is much less price sensitive than other markets,
Speaker 2: they can afford more expensive gas, so that is a
Speaker 2: potentially bullish scenario. For LNG in a market that's otherwise
Speaker 2: seems to me pretty bearish. Outlook if guitar comes back soon.
Speaker 4: Yeah, first of all, thank you very much for coming
Speaker 4: on the podcast. I mean it's I'm disturbed.
Speaker 5: In a little bit by what you said, but I mean
Speaker 5: that's the reality the world we end. The only thing
Speaker 5: that's going to happen long term, and I agree with you,
Speaker 5: is that it's going to push countries to electrify, because
Speaker 5: if you electrify, you have more independence.
Speaker 4: That's the reality of it.
Speaker 2: Mar Yeah, to a large extent. You'll be importing coal
Speaker 2: in a lot of cases too, but the coal market
Speaker 2: seems to not have the same issues at least for
Speaker 2: now that the gas and the oil markets have a rah.
Speaker 3: It was a treat to a you.
Speaker 2: Thank you so much for coming, Thank you so much
Speaker 2: for having me. This is great. I really enjoyed the
Speaker 2: conversation and please let's do it again sometime soon.
Speaker 3: Absolutely epilogue.
Speaker 6: A few hours after we finished the recording, Ras Laffan,
Speaker 6: the heart of the Qatar energy industry, would attack by
Speaker 6: missiles from Iran.
Speaker 3: Extensive damages are reported for the energy industry. Is the
Speaker 3: equivalent of what Fukushima was for the nuclear industry, decades
Speaker 3: of optimization of qualitly concentrated the staggering share of global
Speaker 3: trade through a single fifty kilometer chop point. We are
Speaker 3: definitely moving into the worst case scenario TTF for the
Speaker 3: twenty five percent This morning at sixty eight Europe, Omega
Speaker 3: what our or twenty three usd per and mbtu. Originally
Speaker 3: we wanted to name this episode Force Measure or Little Glitch,
Speaker 3: but you new title us to be apocalypse now and
Speaker 3: still I want to finish on a positive message. We
Speaker 3: for silful importers from Ireland to Japan. We got this.
Speaker 3: We're going to take ourselves out of this mess for good,
Speaker 3: EV's batteries, renewable eat, digital electrification, we got this. This
Speaker 3: is our Independence Day.
Speaker 1: Thank you for listening to Redefining Energy.
Speaker 2: Don't forget to rate the show and subscribe on Apple, Podcast, Spotify,
Speaker 2: or the platform of your choice