Multiple times since I have turned into the Pitbull, I have faced the same questions. How do I get myself into the LNG business? How will I get LNG spot cargos or even a term commitment? What shall I do to get ready for LNG or to get ready for the next big thing in […]
About Rudolf Huber
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It is hard to ignore Russia in today’s newscast and even those not interested in European energy policy become acutely aware that we Europeans utterly depend on them, the folks from the East, for a large part of our energy security. This is a house of cards built on sand, but not so much for […]
Some days ago I met an old couple from Düsseldorf in the tram. They were on a Danube cruise from Düsseldorf through the Rhine, the Main, the Rhine-Main-Danube channel and all the Danube river down to the Black Sea and back. That’s an impressively long trip through the mightiest inland waterway system of Europe. They […]
Robert Kennedy said in a 1966 Cape town speech “There is a Chinese curse which says ‘May he live in interesting times.’ Like it or not we live in interesting times. They are times of danger and uncertainty, but they are also more open to the creative energy of men than any other time in […]
No cash – no business. That’s stone old wisdom. Any LNG venture – even a smallish fuelling outfit – needs a certain amount of cash to get rolling. Most people don’t have the necessary cash on their bank account so that gets you into the investor’s game. I had a couple of business ventures in […]
Too much good news can kill an otherwise perfectly healthy project as it raises a lot of alarm bells. Those problems are not to be taken lightly and need careful planning and constant calibrating of the project. But denying that it’s there is not going to make things better as educated partners, customers, officials and investors will not miss out on it.
Hydrogen is often being touted the final solution to all our problems with vehicles and pollution. It does not produce CO2 (at least not directly) and for that fact alone its the darling of the tree huggers. But reality – as so very often – is much more complex. On balance hydrogen is not really the stuff you want in your tank and it comes at a very heavy price.
But America needs to fix its addiction to easy money and the current crisis could have been the best thing happening to the country in a long while for its curative properties. Its going to be bluntet by the shale gas boom as this puts new easy money at the fingertips of politicians.
America rapidly transforms from the energy problem child to become the new el Dorado. The economy is pimped by all the investment going the other side of the Atlantic. The population is blessed with much cheaper fuel and lets not forget – the environment does better than any time after World War 2. Why cant we have that in Europe?
LNG is a fringe fuel – or it still is because we can see it becoming mainstream very fast. The old fuelling world is staging a fierce defense battle. And they will not shy back from making it real ugly to switch. But as Victor Hugo once famously said “You can’t beat ideas when their time has come”.
Many know Colombia for its Emeralds, even more for its wild past during the drug wars. The wars are over and visitors can enjoy one of the most beautiful counties on earth again. But to the energy man, Colombia rings for its huge super high quality coal reserves. But how is coal important to a LNG man?
Since 2008 I see countless articles proclaiming the end of capitalism. Oh, this is not straight about Methane or the energy industry. But the debate permeates it just like anything else on earth. So, what’s this gobbledygook on the end of capitalism about?
The late 1970ies saw the rise of various green political movements in Europe. Today they are a fundamental feature of any European parliament. Ever since, they were known as those who would fight for Mother Nature and on the side for progressive politics. Do they?
I have seen many of those plans and they have never worked. Not because they are African. This stuff cannot work if you put it in Europe or North America. Because grand Master plans generally are impossible to realize. They inherently lack flexibility, which is necessary to deal with unforeseen events or twists and turns in the market or the international energy scene.
Its hard to get LNG if you need it – its even downright impossible if you are competing in a pipeline gas driven market. Much of the blame lies with the buyers as I have pointed out in many posts. But the sellers attitudes are not helpful.
The diesel engine is the backbone of our transport economy. But diesel is also trash. It is a formerly unwanted by product of refining oil and its the disillate closest to the bottom of the barrel which is even worse. It is a very dirty fuel that produces a plethora of nasty byproducts, all of them deleterious to human health. Its a shame that the world of the 21st century is still hooked on it.
Many African countries are oil producers but they are also beset by frequent power outages. At the same time they flare Natural Gas in huge volumes. Infrastructure to bring that gas to power plants and then further distribute electricity is weak or non existent. That could be a blessing in disguise as the continent is on the verge of an energy revolution.
The pigshit produces methane which keeps Bartertowns lights going and vehicles fuelled in Mad Max. That huge tapestry of pigs is the films true moment to be remembered as this is innovation at its purest. Forget wind turbines and solar panels. In the future, we will get our fuel from hog-poo.
From 2005 until now I had a lot of time to learn about the different sources of gas feedstock for pipelines and LNG liquefaction plants. But something strange occurred to me. Why the hell do we call Earth crust derived methane Natural Gas and treat everything else as some other form of the same molecular mix.
Scientific chaos is not the same as your ordinary chaos. It simply means that it is impossible to predict exactly what will happen in all but the very simplest systems, even if every detail of its past and current conditions is known.
European natural gas prices are a shambles. The ones say that one can’t make a living under those conditions as the price is to low for comfort.
The others say that it’s to high for gas to be competitive. Who is right? An off the beaten path analysis.
A couple of things were conveniently forgotten by those driving the portfolios. First gravity – everything that goes up eventually will come down. European energy utilities and gas traders deluded themselves into believing that the Bonanza would be never ending.
Road transport might offer ultimate flexibility as one can easily bring anything just about anywhere but when that flexibility is not even needed it comes at a horrendous price.
The main difference between a network model and point to point transport is that the network is a loose system of different nodal points between which lumps of whatever (in our case LNG) zip zap around. These nodal points supply smaller satellite distributors which in turn are the backbone of the supply system.
We cannot easily say that we did not try (in homeopathic doses) to wean ourselves off our addiction to imported hydrocarbons but who wants to take a reduction in lifestyle, even if that meant financing (directly or indirectly) some people that may wish to harm us. In simple words, we gave some of those who might want to kill us money – to increase their ability to do so. Plus our presence on their lands further stoked their ire. Not really smart but a reality we seemed had to live with so far.
No more. The unconventional gas revolution has already done more for US national security than all nation building programs combined.
Wouldn’t it make sense to try bringing the incredible gas wealth of the Middle East and the Caspain Sea to well paying European customers? OK, back to the moment when OMV was in heavy labor, just about to give birth to the Nabucco idea. Europe was a big fat gas pie for the newly liberalized Gas market players.
The market grew to infinite proportions (at least in our wet dreams) and it was believed that no matter what volume of gas one threw at it, the market would gobble it up voraciously.
An offhand remark on my last post made me think a little more about how significant methane will become over the next decades and what will end the show – and when.
While the world was having a beauty sleep an earth moving event sent ripples through the Barents Sea – and made the infantile dreams of the classical energy monopolist in Europe (trust me – they are still an abundant species but they have learned to don the market gloves) a little less sweaty.
Those going for LNG as a fuel were always on the exotic side of life in Europe. Not only were they grappling with infrastructure problems, they also had to assume a much higher cost on purchasing new gear. EURO 6 might change that. All those in the game to replace diesel vehicles with LNG fuelled […]
Cheap oil is gone, expensive oil comes in. But that changes the architecture of the energy planet more than most would like to think.
It’s a thorny question. And not one with a clear-cut answer possible. But I have been exposed to both and will jump into the snakepit for you. LNG or Emulsion Fuels? Those who have gone through my Linkedin profile (and others) will not have missed out on the fact that until last year I have […]
LNG regasification has been a no-business for pretty much all of its history. The terminal owners/operators are pretty happy with this state of affairs as their life was real simple so far. Dont move and take in guaranteed returns – that was the mantra. All this will have to change if the LNG industry is serious about going normal.
Methane Hydrates are known to the world as burning ice. It is an oddity to the energy industry and easily shrugged off but they are more imminent than many executives like to think. The LNG projects under construction today will bear its scars.
Many would be buyers are not very nimble when it comes to secure volumes of LNG. No surprise here, as many are behaving like the BORG from Star Trek. We are the BORG – resistance is futile. But is that really a recipe for success?
Shale looks like LNG’s nemesis – on the surface at least. Look harder. It sure killed THE big hope of the LNG world – namely the prospect of the US becoming a premium LNG buyer. But this also has jump started LNG as a fuel.
It’s incredible how misunderstood Natural Gas and especially LNG is by the general public. It’s the solution to many of our problems (at least energy wise) and still it has a bad name. That’s a shame as this stuff is so incredibly cool, it would have to be invented if it did not exist already.
About 2 months ago I had written an open letter to president Obama. Here is his response. Right below it I explain why I think that LNG as a fuel is not just a blimp or a bridge technology as some like to call it. Its an energy earthquake and it will ring in a new paradigm shift.
The Caribbean would be the perfect region for LNGification. It has not happened yet which is a shame as the immaculate pearl it evokes in our phantasies has been tarnished. But things are about to change, very dramatically so.
Nuke and LNG could not be more different. Nuclear power is the king of cheap baseload. Once built – it makes little sense to switch a nuclear power plant off just because of changes in the demand picture. LNG is the king of flexibility. It can be switched on and off very rapidly. And as said, as a liquid it stays nicely in a vehicles tank waiting to be regasified on demand and combusted in order to produce forward motion (or any other thing you do with internal combustion engines).
LNG has been a history of ever larger liquefaction trains. It all culminated in the construction of the Qatari supertrains. One of those monsters is able to satisfy the needs of more than the entire gas consumption of a small country such as Austria. But do they make economic sense?
Central Asians are the strange region out of the Natural Gas world. They have lots of it. They would like to export it. But that’s very hard. In the meantime, something much more worthwhile could be done with it.
Does anyone still remember the US LNG import adventure? Seems to be a long way off. Today, everyone talks about the US becoming a huge LNG exporter. Asia of course looks like a big nice ice cream on a hot summer day to a distressed LNG terminal operator. But there is also big competition on this premium LNG buying region.
Expertise can be a drawback. Sometimes it’s outright deadly. Some things – sometimes – change so deeply, so radically that old experience does not even serve as a valid foundation for new learning anymore. It becomes so harmful – you must get rid of it – or else you face oblivion. In Natural gas – this happens right here – right now.
To those outside the nebulous Natural Gas world, LNG is the stuff that evokes phantasies of miracle trades and fast riches. LNG has been dubbed a commodity many times over the last 10 years alone. But is the status deserved? A demystification.
Insanity is doing the same thing over and over again and expecting different results. We all know the quote from Einstein. But that’s what happens in LNG all the time. Here is an alternative proposal.
The US seems to be on the verge of becoming an LNG exporter. This, combined with new volumes from Australia, show the prospect of Asia being drowned in LNG. But there is a shiny white knight on the horizon. China with its ever-growing industries, with its endlessly expanding consumer markets, with its insatiable thirst for energy promises to become the new LNG El Dorado.
Business Developers have to become a Frontschwein in order to face the challenges of the European Natural Gas business. That’s no easy feat for companies that are still pretty monopolistic – and stiff – in spirit.
The future of energy will not be the linear continuation of the past. It will be a wild, twisted and contorted process and man, will it be exciting. The world will look very different from now 20 years down the road.
The Ukraine has a LNG problem. It’s a major blunder and it looks like LNG in the region is doomed. As strange as it sounds, there might be a bright future for LNG in the Black Sea still.
Ten years ago, the European Union embarked on its own journey to Oz by reforming its energy markets. It successively broke the chains of hundreds of millions energy customers from monopoly utilities dictatorship and changed the very nature of the energy business. Suddenly, everyone wanted to be a trader.
New LNG capacity owners find themselves in excruciating economic pain. They have only themselves to blame but this crazy situation might hold the seeds for them, to become the superstars of the gas age. Or else they die.
Those well-connected are supposed to be the magic cure to a rotten LNG portfolio. They are not so important, after all.
LNG agreements pieced together from dead contractual bodies are dangerous. Still many see them as their only source of inspiration. They can do better.
Oil price links are finally coming to an end in Europe. In fact, they have eked an existence as Zombies of the energy world as the fundamental mechanism destroying them was not American shale but free markets.
New Asian LNG buyers (outside the JKT and China) have a problem. They are perceived to be in the “I will pay any price for LNG” club by sellers. Many of them face vastly different situations from each other in their home markets. Not an enviable position but one that can be dealt with.
Superstorm Sandy has blackened out large parts of the American East coast. Electricity generation was not the problem but rather power lines on wooden poles. Distributed generation offers a solution. We all have followed the news on super-storm Sandy while it laid waste to a large swathe of the American North Eastern Seaboard. This time New York […]
OMV’s Gerhard Roiss makes the case for shale gas in Europe. He is right as Europe needs the resource and cannot allow itself to fall behind. I was planning to have a post on shale gas for Europe in December but current news pushed me to this one. Those who know me will not be […]
Sky-high CAPEX plus cost overruns and a fundamental shift in the LNG market mean trouble for some LNG projects. Some will scratch by but I bet there will be a couple of very high profile failures. Just a couple of days ago I have used the Black Mamba metaphor for LNG CAPEX cost explosion and we are handed […]
High fuel prices have caused the shale gas boom and there is no end in sight. When the dust settles, sheer entrepreneurial forces will have transformed the planet. The golden age of gas is just about to begin. The EIA predicts that the US will be the biggest oil producer worldwide by 2020. And by […]
Some companies in Europe have built up massive regasification portfolios with no supply coming forward. They are exposed. They could turn vice into virtue and become the next generation of LNG players rather than doing what did never really work in a market. Assume that you are getting a phone call from a lawyer in a […]
Mr. Obama – you are in your second term now. There is an entrepreneurial spirit under the Natural Gas hood. Being friends with them will help America a lot. Congratulations Mr. Obama, Now that the celebrations are over – back to work. And there is one item that is dear to us Natural Gas fans. […]
LNG has a mystery reputation. This is undeserved. This blog is here to shed light on some of the issues. Many points are mere opinions. You are invited to discuss and disagree if you do so. To those new to it, LNG must be a bedeviled business. As soon as someone just feels confident enough […]