Remarkable comments from fossil fuel producers in the Dallas Fed's energy sector survey:

(www.dallasfed.org/research/sur...)

In wake of the invasion of Ukraine/emergence from Covid, fossil fuel companies turned in a few high-performing quarters.

Going into 2024, they told investors that the good times were here to stay.

So how has it worked out? My latest for IEEFA:

ieefa.org/resources/an...

So why does this matter? The US — and world’s — LNG export capacity is poised to surge even more dramatically in the coming years. Policymakers need the tools to understand what impacts this might have.

It’s sometimes claimed that LNG expansion is unequivocally necessary for global energy security. But here, too, the report paints a nuanced picture. LNG is “unlikely to be the most cost-competitive source of energy for many countries”, while demand uncertainties cloud its overseas market outlook:

Second, re the economic case: the report provides further evidence that expansion of exports puts upward pressure on domestic prices, increasing costs for households and industry. This too is hardly a surprise: ieefa.org/resources/us...

In none of the scenarios, it turns out, do new LNG exports meaningfully decrease emissions. By competing with low-carbon energy and enabling new demand, exports raise global GHGs vs baseline across a range of conditions.

First, re the climate case: LNG advocates claim that it reduces emissions by displacing coal. The report notes that this can be true — but that it does the opposite if it crowds out renewables or nuclear. So how do these countervailing forces interact in practice?

The study is finally out. First, a note on what it isn’t: global energy markets are uncertain, so it doesn’t purport to be a forecast. Rather, it seeks to test what LNG exports look like under different ranges of policy/market conditions. And across scenarios, some big picture conclusions emerge…

First, why was the study necessary? In the past decade, the US has gone from exporting basically no LNG to being the world’s top exporter, and the structure of LNG markets has changed dramatically. Many of the tools used to evaluate LNG’s economic/climate/other impacts were increasingly out of date.

So the DOE’s long-awaited LNG export study is out. Some things that stood out to me on first read… (1/n)

www.energy.gov/sites/defaul...

Reminds me of a fascinating internal volume I once came across in IEA archives about the ways GHG/energy system modeling reflects the assumptions and mindsets of the modelers (and how that can be good, so long as we're conscious of it)... from 1997.

Had a fun conversation w/ your colleague over on the Bad Place about some of this stuff. Made my case that the reasons why folks (environmentalists, yes, but also industry voices) sought the LNG ban were perhaps a bit more nuanced than what was acknowledged in his op-ed…

x.com/ArnabDatta32...

And the Aus case is fascinating; I imagine you’re right that reserve policy may have restrained prices. Ocf the spikes they saw were still significant. Will be interesting to see how things continue to play out, with Aus pursuing far less export growth than us amidst weakening markets…

Thanks for the reply, interesting stuff. And I’d agree that w/ global prices relatively depressed at the moment, there’s been less foreign competition for domestic gas as of late. But that doesn’t change the underlying fact that gas exports expose us to global volatility, hurting domestic consumers.

Enjoying a great conversation with Arnab over at the Other Place...

x.com/ConnorPChung...

The @arnabdatta.bsky.social climate politics op-ed is well worth reading, regardless of what one agrees/disagrees with. But very puzzled by a few of its empirical claims — eg LNG exports actually raise domestic prices and volatility, not lower them as implied.

How is the energy transition impacting equity markets? As climate risk materalizes, what does that mean for the billions and billions that investors have bet on fossil fuels?

Our new report, out today from IEEFA: ieefa.org/resources/pa...

(Enjoy, EnergySky and ClimateSky friends 🔌💡!)