Home » Economics » Energy Demand Destruction Will Lead To Global Recession, Tellurian Chairman Warns

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

Energy Demand Destruction Will Lead To Global Recession, Tellurian Chairman Warns

Energy Demand Destruction Will Lead To Global Recession, Tellurian Chairman Warns

One month ago, Goldman said that the one thing that could accelerate the resolution of Europe’s energy crisis was plain, simple “demand destruction” – i.e., a plunge in demand due to prices that were too high until the reduced demand leads to less supply and a lower price. Specifically, Goldman estimated “that the potential capacity for gas-to-oil substitution could be larger should gas rally further, of up to 1.35 mb/d in power and 0.6 mb/d in industry (in Asia and Europe), although such a large demand boost would prove too large for the oil market to absorb, leading to a spike in prices to in turn achieve oil demand destruction, the ultimate solution to widespread energy scarcity.

There is just one problem with this: “demand destruction”, i.e., forcible shutdown of manufacturing facilities has direct cost on output.

And as Charif Souki, Executive Board Chairman at U.S. LNG developer Tellurian, said at the online IEF gas forum, the demand destruction that results from high natural gas prices could lead to global recession.

“We are dealing not with a gas crisis, the gas is simply the leading horse, but we are dealing with an energy crisis”

Echoing what Goldman said a month ago, Souki said that the first manifestation of demand destruction is a switch from one fuel to another.

But if all fuels become too expensive then you ask people to start changing their lifestyles, start driving less, turning off the lights more often, not putting the air conditioning on, not heat your home.”

My great fear is the lack of planning is going to lead us to global recession.” He also added that having adequate gas storage is “critical” as is investment in infrastructure.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress