Thanks for all the comments. US NG was trading around $3.00 when this video was published, rose to $3.90, and is currently at $3.40. Also, total exports are already exceeding forecasts in my OCT 2016 charts. Finally, coal retirements have been higher, and NG power capacity deployment strong. Also want to reiterate final point: wind and solar will eventually challenge this nice, bullish NG story. Best to tall, Gregor

PS when I reach comment field max characters I can't delete or edit - that a glitch?

Raoul, can we get someone to speak on battery technology on RTV next? This seems inextricably linked with a solar/wind energy future

Grant

Interesting view, but I just can't get behind it. Solar efficiency needs to rise way beyond where it is. There is nothing clean about mining all the resources and burning all the energy it takes to make a solar panel... then factor in its short life AND how China can just print money to subsidize solar factories. A popped debt bubble can spoil that game. On top of that, if solar takes 20% of the world's energy, there is still 80% driven by gas, oil, nuclear and coal. The Chinese want clean air and pushing forward with nuclear. Germany went backwards and started purchasing electricity from France and burning more coal. His thesis here is that traditional energy forms will go stagnant, but it can't be all four at the same time with solar picking up the slack. Coal may decline, but look for nuclear to grow worldwide especially countries that are getting their first plants. Long Uranium from these levels.

It seems to me the data in this presentation would point to DOWNWARD price pressure for natgas.... The non-OECD demand grows by about 4bcf/day, while his forecast US production alone is growing by about 3bcf/day. Add in Australian/Russian production and renewables taking share from natgas, doesnt this point to supply > demand and a bearish view on price?

The case for US LNG exports is predicated on Chinese and EM demand growth like we saw from 2000-2012, not what we are likely to see in the next few years (see Jeff Snider's preso on Eurodollar contraction if you need convincing on that claim). Additionally, US exports were a way to arbitrage the difference between foreign LNG prices indexed to $100 Brent vs. roughly $3/mcf Henry Hub (6-1 ratio on a btu-equivalent basis). Now that oil prices are $50, the economics of getting US sourced LNG to compete in Asia are stretched, in my view. I grant that we will have some amount of LNG exports since many of the US liquefaction facilities have sold their gas on long-term contracts, but that 14 Bcf/d number looks high to me. Lastly, there's enough gas in the Marcellus and Utica to service domestic needs; it took Henry Hub going to $1.60/mcf to stop the production growth. Even if we get serious domestic demand growth, the Haynesville or any number of legacy areas could fill the incremental needs without gas prices rising much higher than $4/mcf. Bottom line: there is still too much gas.

You can't do a straight comparison of mega project costs in any industry between China and California. Labor costs, logistics, regulatory, finance, insurance costs are all different.

He should distinguish between renewables capacity and actual renewables production. Renewables have very low capacity utilization, therefore comparison of fossil capacity to renewables capacity can be misleading. Overall a good presentation.

I'm short the April contract from 3.255 so I'm biased, but inventory levels are 1.5% above last year and another warm winter would really pressure prices. Currently, positioning in natural gas futures is pretty extreme and large speculators have been taking profits for the past few days on higher inventory levels and warmer weather. I can see prices heading higher as LNG exports really grow but that is likely a 2018-2019 story IMO

Very good overview from Gregor. I would never have guessed solar would take off the way it has and I agreed with Gregor that solar per unit costs are going to fall. Great for sunny countries. Of course at night solar isn't available. Electrical storage breakthroughs are needed. Doesn't look good for coal at all.

Since renewables from a grid perspective are highly variable, natural gas plants have to spin (i.e. run as a backup and provide reserves) in order to keep the grid reliable, therefore more renewables should be bullish for gas prices in the long run.

I see Nuc Power losing against renewable energy here on the east coast USA. Due to PJM auctions and awarded contracts. Nuc loose and don't get contracts. Not only will they scrap future projects, they may not even renew current licenses when they expire. For more discussion see #Uranium room @ CEO.CA

It takes time to bring new production online. Lower price has taken supply off the market so price will go up for sometime

Coxey C: members of the US congress wanted a similar price protection mechanism, but were not successful in establishing one. As with oil, NG is free to move.... here in the US. In my presentation, I meant to convey that the affordability ceiling is pretty far away from current prices. Let's call that $6.00. Looking ahead, though, if price soared above that level you would see rumblings from congress.

The bull case for natty needs more fleshing out... no mention of technology gains or how LATAM/Qatar production gains affect price

very interesting presentation , please try to bring Gregor more often. th'x!!

Gregor, Australia has a mechanism to keep domestic gas prices unaffected by the export market. Does the US have something similar or will domestic users be competing with foreign users in the marketplace? How might this effect US demand and even other energy sources?

Fantastic presentation- Learnt a lot on nat gas which to be honest i didnt know that much about. Loved the fact you mentioned solar and the rapid cost decline in solar technology. I believe that this rapid cost decline coupled with the game changer that is energy storage ( lithium batteries/powerwalls etc) this is what will shake up the conventional energy markets. so many great investment opportunities are available as a result ( think lithium,off grid energy storage, both domestic and commercial, solar cells, EV's) which is refreshing in a time where so many people see doom and gloom, looming recessions and deflation.. I look forward to seeing your next presentation.. Cheers

I love Gregor McDonald, please keep bringing him back.

Solar electricity generation typically requires the support of natural gas powered electricity at night. Therefore natural gas could be complementary and a necessary supplement to solar generated electricity in many markets.

Especilaiiy in the face of the recent fusion technology developments we learned about on a recent RV episode

How anyone can predict price and supply demand 4 years out on any commodity is beyond me. In the face of an 80 year debt cyle coming to an end and Global deflation. You can make charts say anything.

good information on the future of Nat Gas and Solar. I did not realize that solar was becoming so cost effective. thank you

Has Solar become more invest able because there are less government subsidies? Should we look at investing in Solar Panel Companies (though there is a short term oversupply)?

One word: inventory