By Micah Halpern
I've Been Thinking:
The US is exporting natural gas from shale to the Middle East.
Two shipments of liquefied natural gas went to Kuwait, one to the United Arab Emirates and two to Jordan. This is mind boggling.
Kuwait and the UAE together hold 40% of the world’s natural gas reserves. And they have more than 100 years of natural gas reserves.
So why are they importing US natural gas?
The answer is that they have a shortage of usable natural gas.
How? Here's how. They have heavily subsidized gas and fixed prices and they have a huge amount of wasted energy. Prices are so low and demand is crazy high --- so they need much more. Their gas is sour which means it has to be purified. It contains far too much hydrogen sulfide. That is expensive -- way above the price being charged per BTU in these gas rich Middle East countries.
And that's why it is getting cleaner gas from the US makes sense, even if it is counter intuitive.
Micah@MicahHalpern.com
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