This is the time of year when liberal news outlets warn of irreversible climate change. We spent a couple of days in Naples, FL which was, unusually, cooler than New Jersey. The daily afternoon thunderstorms that accompany hurricane season moderate the heat. When I first moved to New York from London in 1982 I remember being amazed at how on very hot days the tarmac on the streets felt soft underfoot.

PJM Interconnect, which operates the grid for mid-Atlantic states and as far west as Illinois, issued an order for Maximum Generation. New Jersey electricity prices are rising by 17%, which PJM blames in part on declining supply.  Only self-flagellating Democrat energy policies could engineer such an outcome. State policy is to move to 100% renewable power by 2035.

Coal plants are being closed but solar and wind are inadequate – especially since offshore wind projects have been canceled. The policy is a virtue-signaling goal that is expensive, irrelevant and risks leaving the state short of power at peak times like these. Let’s hope there’s enough available to avoid power losses during the summer.

This blog shares with Energy Secretary Chris Wright a belief that climate change is real. Left wing policy prescriptions have failed to make much impact, because they favor intermittent energy instead of pushing for worldwide displacement of coal with gas.

Emissions growth in the developing world is far too much to be offset by even the most draconian energy policies promoted by rich world liberals. In the UK, industry has complained about the prohibitive cost of electricity as the country has shifted to windpower.

Britain has been reducing its emissions at the cost of jobs. The government recently announced plans to cut prices for industrial users, which means they’ll be subsidized by taxpayers. Once again, renewables are not cheap.

Data centers are the main source of demand growth in the US, and they are also being blamed for the jump in New Jersey electricity prices. But at a global level, increased air conditioning is more impactful than AI.

India’s Centre for Science and the Environment claims that, “A single heatwave – even one lasting just a few days – causes tens of thousands of excess deaths in India,” Global warming and rising living standards are driving energy demand up. Coal provides 75% of India’s electricity. For all non-OECD countries, it’s 45%. The US is 16% and the EU is 13%. The number of air-conditioning units in India is expected to grow from 110,000 today to almost half a million within the next decade. That’s where emissions are going up.

India imported 26.1 Million Tons (MTs) of LNG last year, equal to around 3.5 Billion Cubic Feet per Day (BCF/D). This was up from 21.9 MTs in 2023. The US provided almost a fifth of this. We were their second biggest supplier, behind Qatar which is a much shorter trip.

India plans to double its imports of LNG by 2030. They’ve signed contracts with ADNOC and TotalEnergies, two companies that have in turn contracted to buy LNG from NextDecade’s Rio Grande terminal in Texas once it’s completed.

Since gas generates around half the emissions of coal when used to produce electricity, investments in growing our LNG export capability are helping keep Indians cool in the summer and reducing their emissions.

The last few days illustrate how hard it is to trade any market, including energy, based on developments in the Middle East. But on balance, even when oil prices drop sharply and erase prior gains, the net effect is to highlight the security in America’s supply of oil and gas both for our domestic market and overseas buyers. Qatar easily fended off Iran’s missiles, whose delivery was in any case well telegraphed.

But America’s LNG shipments do not leave ports at risk of attack. We don’t have to ask arriving tankers to wait miles away to avoid creating a concentrated target at the shipping terminal. They don’t have to pass through a narrow strait of water that might be closed during a war.

Because LNG contracts are often ten years or more, buyers need to consider a range of possibilities.

Venture Global (VG) was a brief beneficiary of the fears around shipping access through the Strait of Hormuz. This is because they have the most uncommitted capacity of any LNG exporter, so would have been able to profit from a short term spike in global LNG prices.

This is what they did in 2022 when Russia invaded Ukraine, earning an estimated $3.5BN along with the ire of customers who believed those deliveries should have gone to them under existing contracts. VG’s slide on Monday mirrored oil, as markets priced in reduced tensions in the region.

Other positive LNG news came from Cheniere. They announced Final Investment Decision on Trains 8 and 9 at Corpus Christi, and plan to spend $25BN on accretive growth projects, buybacks and debt repurchases through 2032, by which time they expect to reach $25 per share of Distributable Cash Flow. They also raised their dividend by 11%, although at 0.94% it won’t draw income-seeking investors.

We were also happy to see that TD Cowen raised NextDecade to a Buy, which boosted the stock yesterday. We continue to think it’s attractively priced.

We have two have funds that seek to profit from this environment:

Energy Mutual Fund

Energy ETF

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