Sunday, September 25, 2016

Taking (another) a short break - no post this week

I'm taking another short break. A temporarily overwhelming workload has prevented me from writing a post this week. I expect to post again on Sunday, October 2.

Sunday, September 18, 2016

Taking a short break - no post this week

I'm taking a short break and expect to post again on Sunday, September 25.

Sunday, September 11, 2016

Why 'overregulated' California is leading the way

Ideologues hate it when the facts get in the way of their theories. California's Gov. Jerry Brown signed trailblazing legislation last week that commits the state to audacious greenhouse gas emission reductions by 2030 of 40 percent below 1990 levels. Not surprisingly, longstanding critics from the business community were howling once again about how California's business climate will deteriorate as a result.

The law extended efforts under California's previous cap-and-trade bill which set emission targets for 2020 to match 1990 levels.

Predictions of doom for the California economy are a perennial staple of California politics. But is there any truth to them?

First, here are the bald facts. Growth of California's 'overregulated' economy has frequently exceeded the U.S. economy as a whole since 1998. Annual growth in gross domestic product shown in the linked graphs is not a perfect measure of economic vitality, but it shows that fears that California is somehow stunted by its so-called excessive regulatory and tax burden isn't supported by the growth numbers.

Moreover, states that rank highest in typical business-oriented think tank ratings such as North Dakota and Wyoming saw their economies shrink by 6.7 and 2.9 percent respectively in 2015 as California led the nation with an expansion of 4.2 percent. Of course, North Dakota and Wyoming were hit hard by the decline of oil prices as their economies are largely extractive. California's economy is far more diverse.

It's probably true that carbon emissions intensive industries will now think twice about expanding their presence in California. But those industries aren't really the future that California is seeking.

Instead, the state is becoming a leader in solar and wind energy and energy efficiency technology and policy. These are cutting edge industries that other states should envy California for. One has to look no further than the coal industry to see what's in store for the fossil fuel industry as a whole and the economies that rely on them. As carbon emission rules grow more stringent, the sun is setting on those industries that don't adapt.

That puts California in the vanguard of adaptation forcing California businesses to adapt and innovate--yes, innovate. Regulatory pressures actually spur business innovation and investment, creating jobs and new wealth. And, that innovation makes California a magnet for business investment as it extends its leadership as a worldwide provider of cutting-edge technologies, energy-related and otherwise.

The classic business example of regulation leading to leadership in the past has been U.S. government regulation of pharmaceuticals which made drugs developed by American companies acceptable worldwide because of the reputation of U.S. regulators. (That reputation has been tarnished in more recent times, but that's another story.)

So, it turns out that adapting to lower carbon emissions is moving jobs and investment into California and giving it an edge.

There are, of course, many reasons California has prospered so much despite its often cited reputation as anti-business. First, people like living in the state's pleasant climate. That attracts a lot of smart people who want to live someplace nice. Second, California has some of the world's top private and public universities at the center of technology research and development. Third, California's public services and infrastructure attract people who want to live in a state that values these. The state also attracts industries that need the well-maintained ports, roads and public services that make businesses prosper.

Fourth, the state's ethnic and cultural diversity is part of what attracts what researcher Richard Florida calls the "creative class" that drives innovation. This class is drawn to locales by his three "T's": talent, tolerance and technology. California has all these in abundance.

Success begets success. The factors that make California such an economic success story are not easy to emulate. A comfortableness with diversity is a cultural trait that develops over time, but only in areas that are open to newcomers who are unlike current residents. Top-notch universities and research cost money, often a lot of public money--as do infrastructure and public services. High taxes are required to support these public expenditures.

Some advantages, of course, can't be emulated. North Dakota can't offer the beauty of the California coastline, nor California's mostly mild winters.

There are certainly things one can complain about in California--the smog, the traffic in large urban areas and the regulation of many aspects of California life and business not found in other states. And, it is true that some of California's extensive public infrastructure needs repair, updating and replacement. But, that's true of every state in the union.

And still, people keep moving to California and entrepreneurs keep forming businesses there and prospering. They must see something that business-aligned think tanks just don't get.

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P.S. In what I believe is an emerging slow-growth or no-growth economy, it appears that those locales which emphasize meeting our climate and resource challenges head on with innovative social, political and technological measures are more likely to experience what little growth there is to be had.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, September 04, 2016

Hanjin shipping bankruptcy: 'Efficient' just-in-time delivery not so efficient after all

We are about to learn once again that lack of resilience is the flip side of efficiency. The world's seventh largest shipping firm, Korean-based Hanjin Shipping Co. Ltd., failed to rally the support of its creditors last week and was forced to file for bankruptcy.

Retailers and manufacturers worldwide are in a bit of a panic as the fate of goods on Hanjin ships shifts into the hands of courts and lawyers for creditors intent on seizing Hanjin assets in order to ensure payment of outstanding bills. Much of Hanjin's fleet is chartered, that is, owned by others, and those owners want to make sure they get paid their charter fees or get their ships back pronto.

The result has been that half of Hanjin's container vessels are currently blocked from the world's ports for fear that the ports will not be paid for their loading and unloading services. Other shippers which include trucking companies which carry containers to their final destination are reluctant to take on Hanjin freight for fear of not getting paid. (You are perhaps seeing the main theme here.) Meanwhile, the sudden drop in available shipping containers and ships has caused shipping rates to soar as businesses scramble to make other arrangements for items still to be shipped.

U.S. retailers are so panicked that they have asked the U.S. Department of Commerce to step in to help resolve the breakdown which is likely to hurt those retailers during the upcoming Christmas shopping season.

Let's take a step back to understand how this all happened. Clever business owners have learned to run so-called "lean" operations to compete with their equally lean competitors. One way to be lean is to reduce idle inventories which just sit in expensive warehouses by arranging to have what the business needs delivered practically every day. The approach is often referred to as a warehouse on wheels and also as just-in-time delivery.

With little or no inventory of essential goods and raw materials retailers and manufacturers are subject to disruptions all along their supply chains which reach around the globe. A breakdown at any step can quickly bring activity to a halt on the factory floor or on the sales floor.

Just-in-time is very efficient financially (until, of course, it isn't). Little money is tied up in inventories or the space to warehouse them. But just-in-time is not very resilient. It used to be that businesses stockpiled goods and critical resources to ensure against disruptions. But the advent of computerized tracking combined with more efficient shipping practices worked to end the stockpiling of inventories.

I wrote about the vulnerabilities of just-in-time delivery systems back in 2006, 2008 and updated the 2006 piece in 2011. My suggestion back in 2006 that just-in-time systems were likely to recede in the wake of repeated shocks has proven to be premature. But the wisdom of running hospitals, for instance, on just-in-time supply principles seems foolhardy. It seems logical for hospitals as emergency facilities to be prepared for a mass catastrophe (earthquake, hurricane, etc.) with substantial medical supplies. Along these lines, does a three-day supply of food now available in most metropolises seem like wise planning?

The Hanjin bankruptcy also calls into the question the wisdom of allowing so much freight--7.8 percent of all trans-Pacific U.S. freight--to be handled by one carrier. And yet large size and just-in-time systems create what economists like to call economies of scale. Goods and services are provided more cheaply.

But such systems are not resilient. Resilience often requires redundancy and that spells inefficiency in today's business climate. It is, however, what we see in nature. Humans have two kidneys, but can survive with just one. Some genes are redundant, able to perform the same functions. There are 4,186 known species of diving beetles, lots of redundancy to ensure survival and biodiversity.

Two organizations worldwide practice redundancy on a major scale. Space exploration agencies build multiple redundant systems, especially for manned flight, to ensure the survival of spaceships, probes and people. Space exploration is so hazardous that even these redundancies don't always ensure survival as the loss of two space shuttles has shown.

The world's militaries also practice redundancy to ensure survivability and deterrence. The United States, for example, continues to maintain a trio of nuclear armaments on land, on and under the sea and in the air at all times on the theory that in order to maintain a credible nuclear deterrent, the U.S. military must have nuclear arsenals that are difficult to destroy in a first strike. If some of those arsenals are deep in the oceans in nuclear submarines or on bombers in flight, some of those will likely survive to strike back--though sane people will ask what of human civilization will be left after such an exchange.

And when it comes to oil, the lifeblood of the world economy, countries across the globe now have what are called strategic petroleum reserves, oil reserves controlled by or mandated by governments to ensure against disruption of oil deliveries.

All of these redundancies would be considered "inefficient" in the business world. But they create much more resilient systems. Tightly networked systems with little redundancy such as the worldwide logistics system we now live under are highly efficient but vulnerable to widespread breakdowns from small hiccups. What seems rational on the surface is deeply irrational underneath.

The Hanjin bankruptcy is unlikely to bring down the world logistics system. At most it will shutter some factories temporarily and result in store shelves that are a little less diverse this fall. But the Hanjin affair will make clear that efficiency does not always come cheap, and that efficient systems are only efficient if they function continuously.

Should the pressures we saw in 2008 return, we may wish that just-in-time systems had been abandoned or least modified so as not to create the large and cascading disruptions that are an inevitable cost of such "efficiency." And should the financial uncertainty experienced at the end of 2008 after the financial crash return, we may find far more Hanjins filing for bankruptcy and far more serious disruptions occurring than we are experiencing today.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, August 28, 2016

Monsanto, temptation and some 'adolescent' farmers

"I can resist everything except temptation," one of playwright Oscar Wilde's characters tells us. But, the management of Monsanto, the agribusiness giant, must not be fans of the theater. As a result Monsanto has done the equivalent of giving a teenage boy the keys to the family car and then telling him that he can't drive it. We know what comes next.

The way this has manifested itself is widespread damage to soybeans, peaches and other crops from drifting herbicide. The problem has gotten so bad that the U.S. Environmental Protection Agency (EPA) has issued an advisory reminding farmers that the offending herbicide, dicamba, is not yet approved for spraying on dicamba-resistant soybeans and cotton (produced by Monsanto). That approval is under review, but only for a special dicamba formulation from Monsanto which supposedly reduces drift.

In the meantime, state agricultural officials in Arkansas have become so alarmed they've banned dicamba for use on row crops.

To understand how this happened, first we need some background. Monsanto is famous for its genetically engineered crops that resist its Roundup Ready brand herbicide. The herbicide can be sprayed on a resistant crop such as soybeans or cotton, and it kills unwanted weeds in the field while sparing the crop.

As weeds have evolved to resist glyphosate--the generic name for Roundup--Monsanto realized that it would have to engineer its crops to resist another herbicide or lose business.

Because new agricultural chemicals must be reviewed for approval through a lengthy and costly process, Monsanto decided to add resistance to the old, already approved herbicide dicamba which has been in use since the 1960s.

Dicamba is good at killing certain kinds of plants, the kind that farmers don't want in their fields. But it can also harm crops. Here is an explanation from the directions for using Banvel, a brand of dicamba:

BANVEL may cause injury to desirable trees and plants, particularly beans, cotton, flowers, fruit trees, grapes, ornamentals, peas, potatoes, soybeans, sunflowers, tobacco, tomatoes, and other broadleaf plants when contacting their roots, stems or foliage.

It's a pretty long list. The trouble is, dicamba can drift and affect crops on other farmers' property.

The next thing you need to know is that Monsanto began selling its dicamba-resistant soybean and cotton seeds last year. It told farmers that the special dicamba formulation which the company designed to minimize dicamba drift would, however, be unavailable since the EPA had yet to approve it. (Approval is still pending.)

Some farmers decided not to wait for that special formulation and have used other dicamba products illegally which are prone to drift and with predictable results. (The kid, the car keys...you get the analogy.) The mess has cast a cloud over the farming community and supporters of the latest generation of herbicide-resistant crops.

Keep in mind that it is practically impossible to prevent all drift from a pesticide applied to an outdoor field. And, even if Monsanto gets approval for its special dicamba formulation, that doesn't mean that all farmers will use it when cheaper formulations may be available. Moreover, because drift may be impossible to stop, farmers growing soybeans or cotton may be forced to buy Monsanto's dicamba-resistant seeds to protect themselves from damage. Farmers raising other crops that have no resistance may be faced with widespread damage to their fruits, vegetables and other crops.

On an analogous topic I wrote previously that Monsanto and other companies producing genetically engineered crops do not take genetic contamination of non-engineered crops very seriously. After all, if these companies can inflict enough contamination on other crops, they will be able to make it impossible to grow non-GMO (genetically modified organism) crops--which are becoming a threat to their market share. I would style this strategy as contaminate and conquer.

Likewise, if these same companies get their new herbicide-resistant crops and herbicide formulations approved, this could become yet another way to frighten farmers into their customer base and eliminate the competition.

And, yet I don't think this latest misstep will turn out quite the way the industry wants it to. As long as there continues to be significant drift, there will be significant damage. The stories we see today come from only a relatively small number of acres compared to the 15 million acres of Monsanto-produced dicamba-resistant soybeans for which the company hopes to sell seed in 2017. And, that acreage number doesn't include the dicamba-resistent cotton seeds the company hopes to market as well from which we can expect more drifting herbicide.

If there is enough damage, the whole dicamba project may have to be withdrawn as the courts sort out who is responsible for all the damage and how much they must pay. That might put the damper for some time on the idea that farmers can trust the judgment of GMO seed companies.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, August 21, 2016

Limitless imagination and physical limits

Humans can imagine lots of things. They can imagine angels and demons. They can imagine whole worlds unlike ours with beings unlike us. They can convey these products of imagination in art, in literature and in film.

They can imagine flying machines, armored cars, diving suits, machine guns and human-like robots. Leonardo da Vinci imagined all of them hundreds of years before they became everyday reality. Hero of Alexandria, a Roman citizen and engineer, described a steam engine 1700 years before Thomas Savery obtained the first patent for one.

It didn't occur to the ancient Romans to refine the idea of the steam engine for transport or industrial work. They lacked the imagination for such a move and perhaps the necessity. After all, they had built a thriving empire without the steam engine, and the Mediterranean already offered quick, wind-powered transport to practically any part of the empire.

How do we distinguish those ideas that are forever going to remain in the realm of fiction and those that can become concrete reality? Of those that are possible how do we determine which won't destroy us? Both questions are very difficult ones indeed.

We are "moderns". We believe we have thrown off the burden of superstition and can now see in the clear light of day all the rational possibilities in the world that were previously hidden from our understanding. In this era of enlightenment the rush of invention and the power it has given us have resulted in the conceit that there is no limit to the power we can ultimately have.

That has given rise to an entire genre of fiction we call science fiction. Much of it concerns itself with space travel, particularly encounters with faraway alien civilizations. And, there is some reason to believe, just based on the immense size of the universe, that such civilizations exist even though we have never heard from them.

The science fiction genre and the enormous technological flowering of our age has encouraged the notion that anything we can imagine, we can achieve or invent. With regard to invention, the trouble with imagination as prediction is that if our imagination were vivid enough to detail the workings of a futuristic invention, those details would be tantamount to having created the invention itself.

All too often, we have objects with mere capabilities, but with no specifications. We have energy-matter transporters, but no specifications and no reason to believe based on the laws of physics that there could be any. We have ships that travel faster than the speed of light. There are theories about how to achieve such speeds. But, the amount of energy required is so enormous--by one calculation the energy contained in all the matter of the planet Jupiter to propel a 1,000 cubic meter ship--that it is hard to imagine how such an energy burst, if achieved, would not destroy the object it was trying to propel.

And, here we get to the crux of the matter. The above illustration is probably the most extreme one we could conjure of what actually constitutes technical prowess. Technology requires energy to run. What we've essentially been doing so far is substituting fossil fuel energy for human labor to run the technology that makes us feel so powerful. This has allowed productivity per person to skyrocket in the industrial age, but at a cost. That cost is the rapid depletion of fossil fuels and the climate effects of burning them.

Technology has given us the illusion of increasing "efficiency" in labor, when, in fact, this "efficiency" has been achieved through the wildly inefficient use of energy from the burning of fossil fuels. That inefficiency is the reason we are burning through so much fossil fuel so fast and creating climate change and depletion problems. (I am indebted to Nate Hagens for this insight.)

So, here I would like to propose a check on every "miracle" technology we are expecting in the future to do everything from making work optional (robots) to solving the climate problem (scrubbing the air of carbon dioxide). If the proponent of any yet-to-be-invented or yet-to-be-widely-deployed technology cannot explain where he or she will get all the energy needed to run it at scale in ways that 1) won't destroy the climate and 2) are in accordance with the known laws of physics, you should be very skeptical that it will ever be widely used.

A society that is ruined by climate change will cease to be technologically adept. So far, the best information we have about how to avoid a climate catastrophe is summed up in two principles: 1) Stop emitting greenhouse gases and 2) stop destroying things such as forests which absorb them.

Many of the technofixes which I've seen such as scrubbing the atmosphere of excess carbon involve enormous energy use. I know that the fantasists will protest that we will do all the things we want to do with "clean" energy. They must believe we have a lot longer for such an energy transition than we actually do. And, they likely don't understand the vast differences in energy density between fossil fuels and renewable energy. So far, "clean" renewable energy is only adding to our capacity rather than replacing our existing fossil fuel infrastructure.

The human imagination is an amazing thing. Its expression in literature, music and art can delight us and also be a mirror for our deepest selves. But it can lead us as well to mistake all our internal yearnings--for love, power and excitement--for external possibilities that have technological solutions which may not be possible or which may have serious downsides.

I am not trying to stop innovation. I am only trying to distinguish helpful innovation that betters our chances of survival and increases our overall quality of life from that which only sends us further down the road of climate instability and resource depletion and thus puts our very survival as a species at stake.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, August 14, 2016

Cheniere's first LNG export cargoes: A contrarian indicator for U.S. natural gas prices?

Cheniere Energy has long been my favorite contrarian indicator in the U.S. natural gas market. For those unfamiliar with the term, a contrarian indicator is an event which suggests that a broadly and firmly held view--in this case, the view that U.S. natural gas supplies will grow and remain cheap for decades--is about to begin a reversal.

As the company shipped its first cargo of U.S. liquefied natural gas (LNG) for export earlier this year, the glut of cheap U.S. natural gas seemed to vindicate Cheniere's plans. I, on the other hand, imagined that the shipment was not confirmation of Cheniere's assumptions, but a contrarian signal that natural gas production was about to dip and that prices were finally going to turn higher in a sustained way.

I say this based on the timing of Cheniere's last scheme, a U.S. natural gas import terminal that now sits unused next to its newly built LNG export terminal in Louisiana. The import terminal received its first LNG shipment in April 2008 just two months before U.S. natural gas prices peaked around $13 per thousand cubic feet, collapsing to a low of $2.06 by September 2009. For comparison, last week U.S. natural gas futures for September delivery closed at $2.59.

Cheniere's stock price went from above $40 in 2007 to around $3 by September 2009, having gone below $1 at one point. When Cheniere planned and built the import terminal, most everyone believed that U.S. natural gas production would soon go into decline. But, only months after the terminal was operational, there was no longer any reason to bring LNG into the United States. It was just too expensive to compete with cheap domestic production which continued to grow.

So, Cheniere got the idea that it would reinvent itself as an LNG exporter. After all, because of the so-called shale revolution U.S. natural gas production was supposed rise for decades keeping U.S. domestic gas cheap. The rest of the world, Europe and Asia especially, would be hungry for LNG supplies and would pay dearly for them.

That was then. Now, of course, LNG prices have collapsed because of worldwide overexpansion of LNG capacity and flat demand in a world struggling to grow. Prices which had been above $11 in Europe and between $15 and $18 in Japan in 2012--while Cheniere was building its export terminal--have now swooned to $4.51 in Europe and $6 in Japan. Even back in 2012 Cheniere's foray into LNG exports seemed like a risky proposition to me.

What's worse for Cheniere is that the first signs of a U.S. natural gas production decline have appeared. Shale gas, the main driver of U.S. production growth, is expected to decline. That means that at some point supplies will shrink enough that U.S. prices will rise and likely make the margin between the U.S. price and European and Asian prices even smaller. And, as it turns out, the peak in U.S. natural gas production may arrive by 2020 if it hasn't already.

I have not scrutinized Cheniere's financial statements. I do not know the structure of its debt. Nor have I studied the arcana of the company's existing contracts for delivery of LNG cargoes. Cheniere reports that 87 percent of its capacity is under long-term contracts where all the price risk is taken by the buyer. If Cheniere makes money, it will make money based on service fees.

With LNG prices as low as they are and a glut of new LNG facilities still planned, will other buyers from other new facilities take all the price risk which seems only to the upside? Will they insist on a more equitable sharing of that risk? Will the low spot price of LNG lead to more short-term arrangements for the time being? These are all good questions for those contemplating an investment in LNG facilities.

An earnings report from Cheniere released last week missed estimates and may or may not indicate a problem. Famed short seller Jim Chanos--who has no doubt done all the analysis I've failed to do--thinks the company has many problems.

In December of last year I suggested that one possible surprise in the year ahead was that several approved U.S. LNG projects might be delayed or canceled, something that seemed unlikely at the time. In late July Royal Dutch Shell announced that it was delaying a decision on whether to build an LNG export facility in Louisiana. Earlier in the month, the company announced a delay for a similar project in British Columbia.

Just last week Sempra Energy announced a delay in further work on an expansion of its Louisiana-based LNG export operation.

Outside North America a cancellation in Australia and a delay in Cameroon show that the problem is worldwide.

Possibly making matters worse in the long run are planned natural gas deliveries by pipeline from Russia to China starting in 2019 that might sell for around $10 to $11. If that becomes the ceiling price in China, LNG from the United States will almost surely be unable to compete for the large Chinese market.

Because Cheniere is taking no price risk on almost all of its exports, the company may make out just fine no matter what happens to U.S. natural gas or world LNG prices. (I leave it to the financial analysts to figure out, for instance, whether Cheniere's arrangement with Britain's BG Group to supply gas at 115 percent of the Henry Hub price plus a $2.25 per million BTUs liquefaction fee will provide adequate cash flow.)

But, I'm guessing that Cheniere's first exports of LNG will in hindsight likely mark a bottom for U.S. natural gas prices--just as its first imports of LNG nearly coincided with the top of the gas market in 2008. U.S. natural gas production is likely to shrink in the coming years, and Cheniere is proposing to take more and more of that shrinking supply and export it. And, so are several other companies (though I doubt that many of them will complete their projects).

The question for investors is whether U.S. LNG operators will make money or simply destroy capital as Cheniere did in the past with its LNG import operations. The question for policymakers is whether shipping U.S. natural gas abroad is a good idea even as the country continues to import natural gas to meet its needs.*

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*It is a supreme irony the some U.S. imports continue to arrive in the form of LNG, almost certainly under long-term contracts. Some of those imports arrived through Sabine Pass, Louisiana just last year, the site of Cheniere's new LNG export facility. The lion's share of U.S. imports, however, come via pipeline from Canada.

Disclosure: I have no investments related to Cheniere Energy.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.