Trump Ignorance has even his Allies “Agassed”

May 28, 2016


Above, chart shows how leading traditional importers of LNG (which most of my readers know means Liquified Natural Gas) have cut usage so much as to become net exporters.(more details below)

The current oil glut has turned thinking upside down on the idea of how the Oil age comes to an end. Classically, we’ve always supposed that at some future time we run out of oil and gas, and they become so expensive so as to be prohibitive. (archetypical Mad Max scenario)

But as I’ve discussed here before, instead, the abundance of oil being produced, leading to a glut and collapse of prices, and flameout of plans to expand drilling to ever more exotic resources,  may actually be what ushers rock oil the way of whale oil.

Could something like that happen to LNG?

And if it did, would Donald Trump ever know?


Robert Murray is the founder and CEO of Murray Energy Corp., an Ohio-based coal mining company. He blames the troubles facing the coal industry entirely on Democrats and has led lawsuits against Obama administration energy policies.

Speaking at a conference on Monday, Murray recounted that about a week ago, Donald Trump summoned him in for a one-on-one meeting, to reassure him that Trump is a friend of coal.

During the meeting, as Trump asked about various aspects of energy, Murray suggested lifting the ban on liquefied natural gas (LNG) exports. The hope is if more natural gas can be exported, it might reduce the glut in the US, which has driven prices so low that it’s killing coal.

Which brings us to this immortal exchange, recounted in SNL:

[Murray] said that Trump was agreeable with the idea, but then had a question.

“What’s LNG?” Murray said Trump asked.

And just to be clear, that’s not Saturday Night Live but the excellent energy trade journal SNL. It is, in other words, real life.



Japan’s Jera Co., one of the world’s largest buyers of liquefied natural gas, agreed to sell the fuel to a unit of France’s Electricite de France SA.

Jera, a joint venture between Tokyo Electric Power Co. and Chubu Electric Power Co., will sell as much as 1.5 million metric tons of LNG between June 2018 and December 2020, it said in a statement Thursday. The price of the LNG will be linked to European gas market prices, according to the statement.

Jera’s debut as a seller to Europe underscores how the oversupplied market has challenged traditional exporters, who have relied on steady, one-way demand from buyers in countries like Japan, the world’s largest consumer of the fuel. Japan’s new role as a middleman adds further pressure on LNG producers, who are losing bargaining power because of the glut.

“This deal represents an entry point for Jera into the European market, at a time when the company’s LNG contracts from the U.S. will be ramping up significantly,” Michael Jones, a Singapore-based gas and power analyst at Wood Mackenzie Ltd., said by e-mail. “The demand outlook in Jera’s home market remains uncertain, so EDF gives Jera the ability to offload some flexible U.S. volumes into Europe.”

Japan’s LNG consumption is expected to fall to 72 million tons in 2020 and 62 million tons in 2030, compared to 85 million tons in 2015, according to data compiled by the government and the International Energy Agency. Global demand is expected to grow by 45 percent between 2014 and 2020, according to a government presentation from earlier this month.

“Japanese utilities are faced with uncertainty in their future LNG needs due to nuclear restarts, weak domestic demand, strong renewable growth and market liberalization,” said James Taverner, an analyst at IHS Inc. in Tokyo.

Bloomberg video here explains in very simple terms the current oil conundrum, which might be a cautionary tale for the rest of the industry.

11 Responses to “Trump Ignorance has even his Allies “Agassed””

  1. pendantry Says:

    I see ‘agassed’ and I want to suggest that it should be ‘aghast’ on typo grounds. But perhaps it’s intended as a double-barrelled jape: on the one hand, a pun on the ‘G’ in ‘LNG’; and on the other, a swipe at the apparently boundless ignorance of One Who Would Be King?

  2. Had the day off yesterday, so I attended the Drumpf rally in San Diego yesterday (so that nobody else here would have to 😉 ). Basically, I decided to “take one for the team”.

    Drumpf was full of the usual bluster and bs (build the wall, crooked Hillary, Benghazi, kick ISIS’ ass, etc. — nothing anyone else here hasn’t already heard), but the capacity crowd was eating it up.

    Glad I wore sunglasses, because Drumpf’s followers really are blindingly white. Just about the only brown skin you’ll see at a Drumpf rally is on Drumpf’s followers’ noses.

    San Diego County’s two GOP congresscritters (Drunken Hunter Jr. and Darryl Issa) were there to show their fealty to Drumpf (the only people Drumpf loves nearly as much as himself are obsequious brown-nosers).

    I went not so much to hear Drumpf himself, but to gauge his crowd. It was scary to see so many utterly delusional nutcases in one place. It was a weekday afternoon and Drumpf was still able to attract a capacity crowd (10,000+) with more people standing outside waiting to get in. If I were to describe a Drumpf crowd in just a few words, it would be “think a Christopher Monckton crowd on steroids”. (Yes, I really did attend a Monckton event a few years ago — turned out to be a warm-up to this.)

    For the sake of this country (and the sake of civilization), Drumpf needs to lose, and he needs to lose in a landslide. If Drumpf wins, it’s game over immediately. If he loses narrowly, it’s game over in a few years.

    To those out there who are committed Bernie followers, please line up behind Hillary when she (most likely) secures the nomination. Support her and vote for her not because you like her, but because she isn’t nuts. We don’t want Sarah Palin in charge of the NSF, and we don’t want Anthony Watts in charge of NOAA. But Drumpf’s followers would.

    I know that’s pretty sad that it has come to this, but it really is the situation we find ourselves in.

    • The scary thing: Even if Trump loses, his delusional supporters, will still be out there.

    • otter17 Says:

      “think a Christopher Monckton crowd on steroids”

      That sounds quite maddening.

      I think Bernie would do more on the AGW front and more to reform campaign finance (which if successful would see some magical turn-arounds in support for AGW proposals from many politicians currently in denial), but what Berners I have talked to don’t really mean what they say when threatening to not vote in a corrupt system given a Clinton nomination. It is a bit of venting frustration. Let’s hope, anyway, considering the margin between Clinton and Trump at this point. There is a lot of time for Trump to screw up somewhere along the line leading up to the election, but Trump seems to have his numbers firmly established or at least the obedience of his followers. I think Sanders has a better chance in this regard to not play into Trump’s bullying by playing the victim card (or woman card) which just gets Trump supporters further entrenched. Donald has a weak spot with the general public when the focus is just on his knowledge of the issues, and Sanders seems in my opinion to keep the focus there and not react to Trump’s games. That being said, of course all hands on deck to help Clinton defeat Trump by a landslide and garner many legislators devoted to AGW action for years to come.

      I suppose what you mean by “game over” would be that he would follow through on his promises to attempt to wreck any AGW progress to date?

      • I suppose what you mean by “game over” would be that he would follow through on his promises to attempt to wreck any AGW progress to date?

        That’s pretty much my view… If Drumpf wins and Congress remains in GOP hands, global action to curb CO2 emissions will likely be derailed. If Drumpf loses by a narrow margin, then that would indicate that there’s enough of a support base for a Drumpf 2.0 to have a serious shot at the presidency a few years from now.

        • otter17 Says:

          Yes, until the Republican party gets over this AGW denial psychosis, I would agree there have to be landslide presidential defeats for them as well as losing substantial legislature ground. They need to improve to a point of understanding or compromise even better than that 2006-2007 short-lived era of some sanity on the issue. It seems so far away when Pelosi and Gingrich were sitting on that couch together for that solutions-oriented AGW commercial. Now they are flirting with a Vladimir Putin type of character.

  3. Lionel Smith Says:

    I have a co-respondent on FB who keeps posting up items from ‘Allen West Republic’ the latest calling for Elizabeth Warren to be sent a DNA kit. I guess an IQ test and general knowledge, with accents on history, geography and science, tests to Trump will follow.

  4. “Global demand is expected to grow by 45 percent between 2014 and 2020, according to a government presentation from earlier this month.”

    Global LNG trade in 2014 was about 240 Mtpa, so this would mean it would grow 108 Mtpa in 6 years, or 6.4% annually. Given the minimal – almost nonexistent -growth between 2011 and 2015, this looks very unlikely.

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