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• Biden Admin Plays the Local Gas Price Card in LNG …

• Today’s Edition Is Brought To You By The OilPatch …

• Banks Quietly Adjust Net-Zero Targets

• Tweet of the Day

Biden Admin Plays the Local Gas Price Card in LNG Pause

The pause on LNG approvals will help keep local gas prices low.

That’s how a Biden official defended the move that angered the industry.

David Turk cited EIA estimates that higher LNG exports will push U.S. gas prices up by 13%.

By 2050.

All for the good of the American citizens

The original motive for the pause, if you remember, was climate change worry.

And since the Biden admin is so climate-conscious, it had to pause LNG growth.

But the move prompted very loud criticism.

So they had to look for another credible motive – local gas prices.

And this is really a credible motive.

There are people in the gas industry worried about that, too.

But here’s the thing.

You can’t have both a free market and a centrally planned market.

It’s either one or the other.

And pausing new LNG approvals is hardly the best approach.

Just mandate a clause that local demand will be first priority and exports second.

The LNG rush as a disease

A few years ago, Australia overtook Qatar to become the world’s largest LNG exporter.

Soon after, the domestic gas market swung into a deficit.

Because of uncontrolled exports.

So the government had to step in and mandate local supplies.

This is a much better approach than clipping the wings of LNG developers with a “pause”.

It’s fairer and less painful for all involved.

Why not learn from someone else’s mistakes for a change instead of trying to make them all ourselves?

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Banks Quietly Adjust Net-Zero Targets

A couple of years ago, banks were very determined to do their bit for the transition.

By forcing their clients to decarbonize.

Now, they’re quietly “adjusting” their targets.

It turns out the forecasts on which they were based were unrealistic.

Fooled by forecasts

Lenders tailored their decarbonization targets on projections from entities like the IEA.

Which said back in 2021 we didn’t need any more investment in oil, gas, and coal.

It only took a few months for the IEA to call on oil companies to start investing more because a shortage was looming large.

And banks based their targets on that. Yes, they really did.

Said targets normally amount to twisting clients’ arms: decarbonize, or we won’t give you a loan.

Coal companies were the biggest targets…

And then the IEA went and revised its 2021 coal demand forecast – by 32%.

Also, it revised upward its oil demand forecast, too by 8%.

Basically, the IEA projections failed, and they failed badly.

But it took banks a while to realize it.

Better late than never

There has been an abundance of evidence that so-called net-zero projections are over-optimistic at best.

At worst, they are deliberately and seriously misleading.

When banks start losing money because of these misleading “projections,” they will start fighting back.

It’s too early for that, but the day will come.

Maybe not for all, though.

A German pension fund just sold its Big Oil holdings…

Big Oil reported stronger 2023 profits and dividends.

While wind majors planned job cuts and dividend suspension.

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