Finance

Hedge Fund Billionaire Warns Biden's Green Policies Could Spark “Train Wreck” For Natural Gas

Hedge Fund Billionaire Warns Biden’s Green Policies Could Spark “Train Wreck” For Natural Gas

Another US billionaire in the oil/gas industry (or in commodity markets) blamed the Biden administration’s energy policies for soaring fuel costs and said it would magnify the current crisis. 

John Arnold, former Enron trader and hedge fund manager, known as the “king of natural gas,” unleashed a tweetstorm Tuesday directed at Biden for the worsening supply outlook that sent natgas futures to 13-year highs. 

US Natgas supplies are trending below a 5-year mean. 

Source: Houston-based energy firm Criterion Research

He said the federal government should invoke the Defense Production Act to spur increased production, or prices could rise even more and cause economic turmoil. 

Arnold said natgas prices are up 300%, reaching record highs in shale gas areas, though with a flood in new supplies, regulatory woes have capped growth. 

He said gas production in Appalachia (Marcellus + Utica) is one-third of US gas production and has massive reserves, though environmental regulations have delayed new pipeline development. “Gas is only useful if it can be piped,” he said. 

Adding to the regulator chaos unleashed by the Biden administration to restrict American energy, Arnold points out an NYTimes article explaining how “Biden made it even harder to acquire permits by restoring state and tribal rights to veto energy infrastructure.” 

“Without the ability to build, demand destruction is the only way to balance the market,” he warned. Noting, “if Appalachian supplies have permanently plateaued, we’re looking at structurally higher gas prices.” 

Arnold said soaring natgas prices would “affect utility bills, it raises the costs of most domestic manufacturing, especially intermediate goods like steel, glass, chemicals, fertilizer, & refining.” 

He then notes the troubling export issues of the US shipping LNG to European countries to help them transition from Russian gas supplies. He said if regulatory hurdles were lifted and new Appalachian production could be piped, then “we can both supply our allies and keep domestic gas prices low. If the most prolific gas field is essentially off-limits for growth, we cannot.” 

Arnold said Biden’s regulatory mess has produced “$5 gasoline, $9 nat gas, $100+ kWh power.”  

If nothing changes, “this is a train wreck in slow motion,” he warned. 

Arnold’s tweetstorm comes one day after New York City billionaire and oil refiner John Catsimatidis said Biden needs to “open up the spigots” as Americans are crushed by energy inflation. He also pointed out the president has an “obsession” with hurting America’s energy independence, explaining if energy production doesn’t increase, the fuel crisis “will worsen.” 

If Biden doesn’t change his energy policies and prices at the pump and power bills and food prices continue to rise ahead of the midterm elections this fall, Republicans could win back the House. 

Tyler Durden
Wed, 06/08/2022 – 18:00

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