The past 12 months, prices have been $10 to $20 higher, and we haven't been adding to our inventory of drilling locations that we could go into. Maybe it will happen 3-5 years down the road, but anything inside of 24 months is going to be economically driven.
Anything threatening the US LNG investment cycle?
Prices in the US are roughly a $4 per MMBtu. Ten months ago, we were at $2 and struggling to stay above that. In relative terms, when you look at Europe and Asia, our prices are too high for Asian gas demand growth. One reason US gas prices have risen is reduced imports from Canada, which typically supplies 6% to 8% of the US gas market. Tariffs have probably lifted those prices about 10%. Tariffs have also led to China reducing LNG imports from the US by 40%. Meanwhile, Trump is also undermining some of the long-term relationships with Europe, which is pushing the continent closer to gas suppliers like Qatar. The global LNG market looked relatively stable 12 months ago – today, it’s very unstable.
Is Trump’s oil price policy confusing to the domestic industry?
If you look back to the financial crash of 2008, one of the key economic drivers for the US was the oil and gas sector, which really took off with the shale revolution. Between 2008 and 2014, there was a massive build-out, and the industry has continued to improve over time. Trump once said he favored low gasoline prices, but the economics have shifted. The US economy is now driven significantly by exploration and exports. A decade ago, we did not export LNG or crude oil, but now we do. It seems Trump’s North Star for lower prices is shifting.