“Everyone wants a little bit of volatility to make some money.”
Natural gas is historically volatile in price, which has always been a natural advantage to wind and solar, which can readily sign 20 year contracts at predictable prices.
In keeping with the colossal record of incompetence and ignorance of the Trump administration, the utterly predictable damage to Persian Gulf infrastructure, as well as permanent uncertainty about reliabilty of supply from the region, add new uncertainty costs to renewable’s biggest competitor.
Fracking Grifter and Energy Secretary Chris Wright no doubt thought, when he bought his cabinet seat with huge donations to the Trump campaign, that his vision of locking the world into US LNG contracts and massive infrastructure investments was secure.
One wonders what he is thinking today.
“This will bring down the economies of the world,” warned Saad al-Kaabi, Qatar’s energy minister, on March 6th. It was not hyperbole. Days earlier QatarEnergy, which makes a fifth of the world’s liquefied natural gas (lng), shut down its production and export facilities after some were hit by Iranian strikes. Unable to extract, process and, because the Strait of Hormuz is blocked by the fighting, ship its lng, the firm has declared force majeure on its contracts. The price of lng has ballooned on world markets. Customers around the globe, who use it to generate electricity, heat homes and make things like fertiliser, are scrambling to respond.
Rystad, a consultancy, reckons that if Qatari infrastructure suffered little damage and exports resumed after 15 days, annual global lng output would fall by 4.3% this year. If this stretches to a month, the loss would be over 14%.
Last year the Oxford Institute for Energy Studies, a think-tank, modelled a 12-month blockade and found that even accounting for extra production spurred in other places by high prices, annual output would fall by 15%. This at a time when lng demand was forecast to rise by nearly 8% in 2026.
