Investment Insights. Stay Ahead.

US LNG exports to almost triple over next 10 years

Driven by surge in demand in Europe and Asia, boosted by the Inflation Reduction Act, production in the North American natural gas market will increase to 29 billion cubic feet per day (bcfd) from 2022-2033, according to new report by Wood Mackenzie.

“The North America gas market expansion for the next decade will be equivalent to adding two new Permian basins. As Europe diversifies to more secure supply sources and international buyers across the globe seek reliable low cost supply, North America is poised to deliver.”

— said Dulles Wang, Director, Americas Gas and LNG Research for Wood Mackenzie.
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With America is now the world’s largest LNG exporter, this is a unique opportunity for investors. You can read more on our analysis: America sets sails to meet global LNG demand

We will be watching this space closely, particularly as US domestic natural gas prices are now competing on globally, impacting the prices of domestic gas and regional politics as winter approaches.

Demand for fossil fuels forecast to drop for first time — IEA

The IEA has, for the first time, forecast that global demand for fossil fuels could peak or plateau.

“Total demand for fossil fuels declines steadily from the mid-2020s by around 2 exajoules per year on average to 2050, an annual reduction roughly equivalent to the lifetime output of a large oil field”

— IEA, World Energy Outlook 2022

This will obviously have significant impact on the energy transition as governments shift to green energy, including:

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Control Risks flags biggest business risks for 2023

The biggest risk for business in 2023 is the geo-political volatility in the US-China relationship.

US-China conflict remains very unlikely in 2023, but competition and confrontation are moving from the trade and technology realms into the military domain. Neither side seeks nor is prepared for a military conflict in 2023, but both are striving to be ready for when a crisis comes”

— Control Risks, RiskMap 2030

Security, cyber, operational and regulatory risks are also included in the report.

This builds on our analysis for some of the biggest risks and volatility for investors, including:

Apple shifting supply of semiconductors to US

Bloomberg News reporting Apple to buy some of its semiconductor chips from a factory under construction in Arizona.

This is part of an industry trend highlighted in our recent analysis for investors: semiconductors are going global.

Apple currently sources all its chips from Taiwan.

The Arizona plant, being built by the Taiwan Semiconductor Manufacturing Company (TSMC), is still under construction and plans to be operational by 2024. TSMC have also recently announced they plant to invest US$12 billion in a second chip factory in the state.

This will have significant knock on effects to the US economy, but also Taiwan, China and Europe who are now all competing for semiconductor investment and knowledge base.

“We’ve already made a decision to be buying out of a plant in Arizona, and this plant in Arizona starts up in ’24, so we’ve got about two years ahead of us on that one, maybe a little less… And in Europe, I’m sure that we will also source from Europe as those plans become more apparent.”

— Tim Cook, CEO of Apple, at meeting including Apple services chief Eddy Cue and Deirdre O’Brien, its head of retail and human resources.

The announcement comes just as Warren Buffett’s Berkshire Hathaway announces it has purchased US$4.1 billion stock in the Taiwan Semiconductor Manufacturing.

Temperatures forecast to “mild” for Europe in November, easing natural gas prices

A black swan to gas markets after the start of the Ukraine war was a mild winter, but Europe is experiencing a record mild winter – so far. This has eased natural gas prices as people have not yet needed to switch on their heating. Gas storage is full and LNG vessels are sitting off the coast of Europe.

But prices are still at record highs and this is having a significant impact on Europe’s heavy industry which can no longer afford to pay their bills. For example, aluminum plants are shitting across the continent.

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And if/when winter does set in, Europe will expend its gas reserves and next year gas prices will rise again. Meanwhile places like Pakistan and Bangladesh cannot afford natural gas to keep their energy going.

This crisis still has legs. Read more on our story on how the LNG gas market is being overhauled.

REDD+ Carbon Credits equivalent to 50% of all emissions from commercial flights in single year

Not sure why this was all the way down on page 14, but new report from Sylvera states for the 78 registered and issuing REDD+ projects, there are a total of 397,324,507 issued credits in the VCMs. If every REDD+ credit did legitimately equal one metric ton of carbon dioxide (tCO2) or other greenhouse gases (GHGs) being avoided, then the avoided emissions would be equivalent to: 50% of all the emissions from commercial flights in a single year.

(REDD+ is a type of avoidance credit that finances activities that focus on the sustainable management and conservation of at-risk mature forests. Sovereign carbon credits, or Jurisdictional Nested REDD+, are not included in the scope of this assessment.)

You can download full report here.

Voluntary Carbon Credit prices are down right now, but this shows the importance of them to big companies trying to reach their net zero targets.

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Exclusive early access to our uranium bull market report

Uranium is at the start of a 10-year bull market, according to our upcoming report. We forecast the uranium market will be positively impacted by a large net increase in global nuclear reactors, which require uranium as fuel.

440 nuclear reactors provide 10% of world’s electricity, preventing emission of 2.1 billion tonnes of CO2 equivalent every year. Another 156 reactors are under construction or planned and a further 332 are in the proposal stage.

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The report examines key drivers behind this growth, including decarbonization, commercialization of small modular reactor technology, and energy security. Additionally, analysis of the uranium market points to a major reduction in current global stockpiles, a lack of near-term uranium production, and the potential for a supply crunch. 

For early access, Cigar Lounge can download it here: The Uranium Bull Market and the Coming of the Second Atomic Age.