“Things are going to get a lot tighter around here,” a colleague of mine commented as he passed my desk this morning.
That may be an understatement.
Since 1990, the global population increased by nearly two billion people.
Even if the population growth trend slows, as the latest BP Energy Outlook to 2030 report suggests, we can still expect to see a billion and a half new faces by 2030.
And we can actually pinpoint where this increase will happen. According to that same report, approximately 96% of the world’s energy demand growth will be from non-OECD countries (think: China and India).
Furthermore, non-OECD countries will make up 80% of the natural gas demand growth.
As if becoming the second-largest consumer of natural gas wasn’t enough, China is also expected to account for half of the global liquids demand growth for the next twenty years.
But by that time, the energy landscape won’t be the same.
Of course, population is just one factor that will fuel future energy consumption.
BP’s report went on to explain why North America will be almost completely self-sufficient when it comes to energy by 2030, saying North America’s deficiency would become a small surplus.
Interestingly, this “surplus” has pitted the United States against Canada in a footrace to ship energy resources across the Pacific.
Race to Buy, Race to Sell
The U.S. and Canada are in a mad dash to tap into Asia’s LNG market… and in this race, absolutely nothing is off the table.
But to what lengths will the United States go to sell LNG to China?
Last month, Jeff Siegel told you U.S. LNG stocks were busy setting up long-term contracts. And that isn’t the only thing these companies have been up to…
Now they’re planning to widen the Panama Canal by 2014, which will give LNG tankers from the Gulf region quick access to the Asian markets.
The project should alleviate the major problem for modern LNG tankers, which are simply too large to navigate the Canal.
These figures should give you a better idea of just why tensions are growing in the battle over natural gas:
We’re talking about unconventional gas.
In 2030, more than half of North America’s natural gas supply is projected to be from shale gas and coalbed methane.
But if we had to bet on the outcome of this footrace to secure future energy supplies, there’s a clear-cut winner.
Canada has something of an ace up its sleeve in that they don’t have to deal with U.S. politicians.
More to the point, Canada has been looking to diversify its energy exports. As you read this, Canadian Prime Minister Stephen Harper is visiting China.
Despite the fact that Uncle Sam is willing to do anything to come out ahead, Canada may have an entire year’s head start over U.S. companies — with its first shipments expected to hit Asian shores by 2015.
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We also know that the Chinese are more than willing to pay top dollar for it.
That much has been evidenced time and again by news that they once more spending billions in North America’s shale operations.
Just a few days ago, my colleague Nick Hodge showed you the latest of those deals with PetroChina’s billion-dollar price tag for a stake in Shell’s Canadian shale gas project.
Believe me, dear reader, these dealings will only intensify going forward…
As the fourth-largest natural gas consumer in the world, China’s demand is expected to grow by 15% per year for the next decade. That alone will put them in second place within eight years.
And the Middle Kingdom has made it obvious that they prefer Canadian oil and gas to Russian resources.
Make no mistake; this game has just begun.
North American LNG export is in its infancy, a fact that my readers and I have been keenly aware of — and prepared to profit from — since the first drill bits struck Canadian soil to tap shale gas resources.
Right now, I’m putting the finishing touches on a report that details how you too can capitalize on this new opportunity.
So keep an eye on your inbox.
And later this week, we’ll talk more about this footrace to Asia. I’ll explain exactly how Canada has taken the lead and, more importantly, we’ll take a look at what stands in their way.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
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