The U.S. and Europe have agreed to a deal in principle that would ensure a steady stream of U.S. liquefied natural gas is sent to Europe to help replace Russian gas. The deal still needs to be worked out by companies, but it reemphasizes the importance of U.S. gas in the global marketplace and should serve as a boost to domestic firms that produce and transport that gas.
That should help U.S. gas producers like Coterra Energy (ticker: CTRA), EQT (EQT), and Southwestern Energy (SWN), as well as companies like Cheniere Energy (LNG) and Energy Transfer (ET) that process and transport the gas. Those stocks were all up on Friday.
To defund Russia’s war machine, Europe needs to reduce its dependence on Russian natural gas, which at its peak accounted for 40% of European demand. And yet, few European leaders want to lock in long-term contracts for natural gas when they are in the process of decarbonizing.
As luck would have it, when I replaced my furnace about three years ago, I opted for a 95% efficient, rather than another 80%. A rebate from the gas company covered the extra cost, so why not? Same thing with the central a/c, rebate made the higher efficiency choice the same price.
My hope would be that Russia post Putin gets a reformist government that commits to rebuilding Ukrainian infrastructure and Russian civil structures, that they become the friend they ought to be, and that Russia finally emerges from its CzaristImperial nightmare.
We can easily meet the latest promise but in the long run our transportation costs can’t beat Nordstream 1 or 2. European needs will get N2 turned on someday and we’ll be in an oversupply situation- of course that’s never happened.
Joe
Note I am biased toward a balanced energy approach