U.S. gas-price volatility? “I think the Europeans would give us no sympathy [in] complaining about volatility between $3 and $5. So, let’s be realistic,” said Octávio Simões, LNG-export developer Tellurian Inc.’s president and CEO.

Simões joined executives with EQT Corp., Williams Cos. Inc. and Aethon Energy at CERAWeek by S&P Global.

The “volatile” moniker has been assigned to U.S. natural gas prices by consumer media, referring to the rise last year from $4 to nearly $10, down to $3 today.

Toby Rice, president and CEO of 4.7-Bcf/d pureplay Marcellus Shale producer EQT, said, “Europeans would be doing backflips for [a landed] $12 natural gas. That’s the energy equivalent of a $72 oil price.” 

The current European LNG spot price, the Dutch Title Transfer Facility (TTF), is $14 per MMBtu, down from more than $80 last year.

Simões said, “It is time for us as an industry to stop tiptoeing about the value of natural gas. It’s time for us to assume that it is an incredible fuel that we’re not afraid to burn in our kitchens.”

His comment was among several that drew audible audience agreement. 

“It’s versatile for all the things hydrocarbons are needed for—whether it’s plastics or materials that our saint from Scandinavia [Greta Thunberg] likes to wear when she complains about oil and gas.”

Simões joined Tellurian in 2019, shortly after bringing online the newbuild Cameron LNG export plant as president and CEO of Sempra LNG & Midstream, now known as Sempra Infrastructure.

Gordon Huddleston, partner and president of 2.5-Bcf/d Haynesville Shale pureplay producer Aethon Energy, said the key is to continue to try to educate consumers.
“And that’s what has happened last year,” while media consumers were watching Europe try to procure gas. “I think the public has seen how many different products are” related to natural gas, he said.

The newest generation thinks that not driving a car means they don’t need fossil fuels. His response: “It’s like, ‘Well, buy a product.’ I mean, ‘How do you think it got here? What do you think it’s made of?’” 

Like watching a car crash

Rice said education includes explaining that emissions are abated when using natural gas. “And that 30 million tons of coal is replaced for every Bcf/d of natural gas. That’s where the world needs to be focused,” he said.

In another session at CERAWeek, Exxon Mobil Corp. Chairman and CEO Darren Woods also noted that natural gas is clean compared with, for example, coal. But a gas producer gets dinged on its carbon record for producing a fossil fuel.

Simões said he is confident people will continue to realize that hydrocarbons are essential. “The rest of the world already bought that story. The Western world is still a [little messed up] on that,” he said.

Without hydrocarbons, “people are going to burn coal and wood and animal waste … and you’re just never going to solve the climate challenges and cleaning up the air.”
The coming year will be more positive, he expects. “Otherwise, we’re just watching a car crash.”

Alan Armstrong, Williams Cos. president and CEO, said getting federal reform is essential in how energy-infrastructure permits are approved—and oftentimes, not approved.

“We’re not going to be able to be in these geopolitical battles that we’re in right now and have the highest price of energy in the world. That’s just not going to work for us,” he said. 

U.S. natural gas is economic and reduces emissions, he added. “It’s the Golden Age right now for natural gas.

“A lot of things have happened the last couple of years to set it up and I think it’s time for us to grab that ring.” 

Comments