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The argument about north america having natural gas is flawed, on several fundamental levels. Gas is traded internationally and north americans are generally no

The argument about north america having natural gas is flawed, on several fundamental levels. Gas is traded internationally and north americans are generally not insulated from global prices. The reserves being in north america has almost zero bearing on this. Second, natural gas is a finite resource and the vast reserves are vast… for now. What north america also has are vast tracts of land. The ideal place for nuclear reactors since large bodies of water are often close by. Same argument for wind turbines.

danenania 4y ago
"Gas is traded internationally and north americans are generally not insulated from global prices. The reserves being in north america has almost zero bearing on this." The difference when you have your own supply is that the price becomes a policy choice. The government can easily decide to prioritize the domestic market and limit exports.
- geertj 4y ago
  > The government can easily decide to prioritize the domestic market and limit exports. They can, and have done this in the past, e.g. the US ban on export of crude oil. But this does not change the point materially. Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice.
  - danenania 4y ago
    "Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice." I don't think it's so simple. Cheap energy can make entire industrial sectors viable that otherwise wouldn't be. You could easily end up ahead by putting that energy into production of goods that are higher up on the value chain rather than exporting it directly.
    - geertj 4y ago
      > I don't think it's so simple. There will be higher order effects, there always are. I don't think the second order you brought up above changes the argument either. If investing in a certain industrial sector is desirable, then why not sell gas at the international market price, and use the extra proceeds to do the investment at the level that makes sense. That way you can at least tune the investment to a level that makes sense, rather than having it depend on the delta between the local and global market price which will depend on a ton of other factors. Note that I'm not saying that's always bad to protect a local market. The assertion was that North America has enough gas causing it to be isolated from the global market pricing, and I'm still very skeptical about that claim.
- midoridensha 4y ago
  The other factor is that the price is necessarily much higher for exports than for domestic use, because converting NG to LNG and transporting it via ship is difficult and expensive. For domestic use, none of that is necessary. NG isn't like coal that you can just shovel onto a ship and haul across the ocean to burn somewhere else, it's a gas.
toast0 4y ago
> Gas is traded internationally and north americans are generally not insulated from global prices. It is traded internationally, but oceanic shipping of natural gas is expensive, and capacity is limited (export ports, import ports, vessels), so the domestic market doesn't see the full effect of international pricing either.
DennisP 4y ago
Gas is not a global market like oil. Gas is traded internationally only in two ways: one is if you have a direct pipeline, e.g. from Russia to Europe. That's a very localized market. The only real global market is liquified natural gas, transported by those ships with giant spherical tanks, requiring specialized terminals on both ends. That's way more expensive than pipelines. The US exports a fair amount of LNG, especially right now to Europe, but for its domestic gas it pays far lower prices than LNG, and significantly less than most countries with less abundant gas resources. I wish we would move from gas to nuclear since gas has a major climate impact, but low US gas prices do make that more difficult. The US also happens to be especially well situated for solar and wind, making life even harder for nuclear. That comes with some bad news too, because we don't really have great storage solutions yet and we're terrible at building long-distance transmission.
- idiotsecant 4y ago
  It's not as clean as you describe - natural gas is certainly a global market, as demonstrated by the price correlations: futures in the united states are typically based on the henry hub price, as determined by the price at the henry hub located in Erath, Louisiana. If we compare this to rates found at, for example, the UK national balancing point, we will find that there is a definite correlation. The international trade in natural gas is definitely non-trivial. Grandparent post is making the claim that gas is traded internationally and north Americans are generally not insulated from global prices. This is demonstrably true. https://www.theice.com/products/910/UK-NBP-Natural-Gas-Futures/data?marketId=5351150&span=2 https://www.theice.com/products/910/UK-NBP-Natural-Gas-Futur... https://ycharts.com/indicators/henry_hub_natural_gas_spot_price https://ycharts.com/indicators/henry_hub_natural_gas_spot_pr...
  - DennisP 4y ago
    Sure, I'm not saying they're completely separate. If demand for LNG increases a lot (as happened recently) then some US gas is going to go that way. But a country like Japan, subsisting on imported LNG, is still paying way more for its gas than domestic consumers in the US, and that's the point that matters if we're discussing nuclear's market challenges in Japan vs. the US.

danenania 4y ago

"Gas is traded internationally and north americans are generally not insulated from global prices. The reserves being in north america has almost zero bearing on this." The difference when you have your own supply is that the price becomes a policy choice. The government can easily decide to prioritize the domestic market and limit exports.

geertj 4y ago
> The government can easily decide to prioritize the domestic market and limit exports. They can, and have done this in the past, e.g. the US ban on export of crude oil. But this does not change the point materially. Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice.
- danenania 4y ago
  "Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice." I don't think it's so simple. Cheap energy can make entire industrial sectors viable that otherwise wouldn't be. You could easily end up ahead by putting that energy into production of goods that are higher up on the value chain rather than exporting it directly.
  - geertj 4y ago
    > I don't think it's so simple. There will be higher order effects, there always are. I don't think the second order you brought up above changes the argument either. If investing in a certain industrial sector is desirable, then why not sell gas at the international market price, and use the extra proceeds to do the investment at the level that makes sense. That way you can at least tune the investment to a level that makes sense, rather than having it depend on the delta between the local and global market price which will depend on a ton of other factors. Note that I'm not saying that's always bad to protect a local market. The assertion was that North America has enough gas causing it to be isolated from the global market pricing, and I'm still very skeptical about that claim.
midoridensha 4y ago
The other factor is that the price is necessarily much higher for exports than for domestic use, because converting NG to LNG and transporting it via ship is difficult and expensive. For domestic use, none of that is necessary. NG isn't like coal that you can just shovel onto a ship and haul across the ocean to burn somewhere else, it's a gas.

toast0 4y ago

> Gas is traded internationally and north americans are generally not insulated from global prices. It is traded internationally, but oceanic shipping of natural gas is expensive, and capacity is limited (export ports, import ports, vessels), so the domestic market doesn't see the full effect of international pricing either.

DennisP 4y ago

Gas is not a global market like oil. Gas is traded internationally only in two ways: one is if you have a direct pipeline, e.g. from Russia to Europe. That's a very localized market. The only real global market is liquified natural gas, transported by those ships with giant spherical tanks, requiring specialized terminals on both ends. That's way more expensive than pipelines. The US exports a fair amount of LNG, especially right now to Europe, but for its domestic gas it pays far lower prices than LNG, and significantly less than most countries with less abundant gas resources. I wish we would move from gas to nuclear since gas has a major climate impact, but low US gas prices do make that more difficult. The US also happens to be especially well situated for solar and wind, making life even harder for nuclear. That comes with some bad news too, because we don't really have great storage solutions yet and we're terrible at building long-distance transmission.

idiotsecant 4y ago
It's not as clean as you describe - natural gas is certainly a global market, as demonstrated by the price correlations: futures in the united states are typically based on the henry hub price, as determined by the price at the henry hub located in Erath, Louisiana. If we compare this to rates found at, for example, the UK national balancing point, we will find that there is a definite correlation. The international trade in natural gas is definitely non-trivial. Grandparent post is making the claim that gas is traded internationally and north Americans are generally not insulated from global prices. This is demonstrably true. https://www.theice.com/products/910/UK-NBP-Natural-Gas-Futures/data?marketId=5351150&span=2 https://www.theice.com/products/910/UK-NBP-Natural-Gas-Futur... https://ycharts.com/indicators/henry_hub_natural_gas_spot_price https://ycharts.com/indicators/henry_hub_natural_gas_spot_pr...
- DennisP 4y ago
  Sure, I'm not saying they're completely separate. If demand for LNG increases a lot (as happened recently) then some US gas is going to go that way. But a country like Japan, subsisting on imported LNG, is still paying way more for its gas than domestic consumers in the US, and that's the point that matters if we're discussing nuclear's market challenges in Japan vs. the US.