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TLDR: Water shortages are proliferating because soil depletion accelerates under a carbon minimization regime and this impact is felt across soil fertility and more. My thoughts will appear in disarray because I'll do my best to link geopolitics, with chemistry, with energy grids and for all practical purposes, my thoughts are in a disarray.   This is going to feel a bit like reading two Kurt Vonnegut books simultaneously, but I demand that I deliver blog posts on some reasonable schedule, even if the formatting be damned. [Water is complex my friends.] I see nothing positive about future scarcities and their impacts on natural gas+coal consumption, security, and infrastructure. Healthy soil absorbs more water, tilled soil does not. Here's a good video on tilled vs. non tilled soil. When you proliferate renewables, you generate more air, water, and soil pollution per kilowatt hour and you consume more water from farm to fork. This has been a core part of my thesis. I monitor the natural gas markets quarterly as you all know and intensely from 2016-2019. It takes 10-14 kwh to desalinate 1000 gallons of water and this reality puts us in an aggressive doom loop of a scenario primarily because for every 1 unit of desalinated water your produce, you produce 4 units of briny water. I also want to reiterate - Israel has done nothing notable or novel or groundbreakingly phenomenal on this front, I've been swatting and dismissing desalination innovations out of Israel for over a decade. The problem is unsolved on any reasonable economic evaluation.  Desalination problems contribute to the doom loop whereby mankind must spend more to purify water as time goes on.  Areas of the world to watch right now that will become chronic problems in <48-96 months.  • Colorado River System - supplies 70M Americans west of San Antonio with water. It seemes unlikely they'll come to a consensus on how to manage the water.  - I write about this here. It provides a good institutional fodder for never buying anything for the long term west of San Antonio in the USA. The rate of mismanagement exceeds the rate of sustainability of aquifer and river resources.  • [image.png] • [I wage war on the weak STEM folks that have gotten to allocate all the pension money. Planet earth will ignore its chemical, petroleum, and polymer engineers at its own peril.] There will be those renewables ayatollahs that will claim renewables use less water, but my staunch backlash is that they actually use more water per kwh if you look at how those kilowatt hours are created from farm to fork, you analyze the geological-industrial-chemical footprint, and the manner in which the energy grid stomachs stress(how we phase the voltage with the grid, energy generators, etc...). On a final note.... I sometimes have a hunch on materials because it's far too big of a market to understand all of it, but certainly when history doesn't repeat itself, it rhymes. [Will our desire for viable construction sands drive an acute squeeze on water supplies globally?] One of my "gut" hunches that's worth digging into when I get the time is that the sand shortage coming to all construction processes will be acutely felt and our hunt for it will be like sacrificing altitude to gain air speed. It is our "spice" in a sense and we can only get the ideal modalities of high-demand salt by eroding our soils and salinating our waters. This is probably the least well structured of my blog posts and I realize it comes out like a cacophony of thoughts and random evidence. As always if you want to discuss these things, feel free to ping me via twitter or holler via signal. 

I'm writing here from Spain.  TLDR: Mankind won't spend hundreds of billions for a ~10%-20% gain in specific energy over a fission plant, removing radioactive isotopes from lithium reactor jackets is onerous, and dispatch & transmission of energy always have costs.  A lot of friends ask me "Will fusion save us?"  The answer is quite a simple no, it's a marginally improved exorbitantly priced improvement of Plutonium/Uranium based fission plants.  Fusion, if successful, only gives you a 6% to 13% gain in specific energy over a fission plant.  Which means, even after what is likely tens of billions spent on research, the Fusion plant is only slightly smaller than the fission plant.  Some people may tell you that we can rely on Deuterium-Tritium based fusion plants. ["The ''closed DT loop'' fuelling cycle of ITER. Stored deuterium and tritium are introduced into the vacuum chamber where only a small percentage of the fuel is consumed. The plasma exhaust is removed and processed through an isotope separation system that extracts out the fusion fuels for reinjection into the fuelling cycle." - Source: ITER] There's some flaws with that thinking.  The feedstock mechanism for Tritium is having a burning fission plant that relies on Plutonium and Uranium.  I remember reading somewhere that the USA has produced under 400 kilograms of Tritium....in its entire lifetime. (I'm rusty so my number here might be off by a few hundred kilograms)  Fusion: Tritium costs ~$35,000 per a gram.  Fission: Uranium costs $8/gram  If we increase tritium production capacity, the price might drop, but it is very unlikely to drop by ~4300x.  Designing Tritium breeder reactors is extremely hard and requires a vast amount of over-engineering in comparison to building a fission plant.  In the designs I've seen thrown around, you end up generating tritium and helium inside the lithium reactor cover. [Every few years, some crackhead is peddling fusion to me.] Have you ever tried removing Hydrogen isotopes from the lithium blanket? Have you ever engineered a neuron multiplier into a lithium blanket?  Am I missing something here? I'll leave this post scratching my head and also declaring that Fusion might be worthy of random research dollars but there's lower hanging fruits in terms fo energy returns on investment. I'll also add that even if the cost of electricity generation goes to zero, there's always a cost to transmission and dispatch of energy. Those costs are rising with the squeeze on transformer infrastructure caused by EV(Electric vehicle) and renewables proliferation. [Image] In conclusion, anytime someone tells you about fusion and how groundbreaking it will be, please approach it with great skepticism as it relates the feedstock pricing, reactor jacket engineering, and transmission of energy. 

I got way more subscribers than I expected doing this. I've been work-cationing in Europe for the past 6 weeks spending a few weeks with my business partner here in Lisbon and also spending time in Spain.  Next up on the plate in the next 4-8 weeks, I'll be writing about:  • Why Fusion is Irrelevant and Unlikely  • What the World's Transformer Shortage Means for Natural Gas • Water Shortages - Why are they actually occurring at an increasing pace? • Repositrak - This one is ~4.5 years of time I've spent researching, diligencing, and compiling.  You might be curious to know what types of people subscribe to this newsletter. I  downloaded the list and ran it through clearbit.com to give me some clarity.  • Tech Founders (~30%) - Founders from all over.   • VC, PE, and Real Estate Fund Managers (~45%) - I suppose this number surprised me and I'm flattered given how many shots I take at y'all's tribe.  • Angel Investors (~10%)  - Some of them I've invested in and some I've never met.  • Tech Employees and Miscellaneous (~5%) - FAANGN + other startups  • Energy and Macro Fintwit Enthusiasts (~10%) - Some of my folks from Houston and random array of people.  As always, feel free to ping me via twitter or dm me on signal or whatsapp if you want to discuss any of these topics or the previous writings. 

TLDR: American Dynamism or American reshoring isn’t coming to a city near you at any level of real big scale. [Taken from google images - from A16Z's marketing materials.] I’ll keep updating this post with more reference data as it arrives. There’s been much ado about American Dynamism’s announcement with numerous videos and blog posts and much fanfare on twitter. https://www.youtube.com/watch?v=fp8gAbwhPnk&t=39s Some will claim later that they only meant the top 10-20% of the most advanced manufacturing that matters such as electronics, advanced materials, aviation, and defense. It is an anemic pivot.  There’s a complex and never-ending set of modeling variables for how to decide where to put a manufacturing facility. I trained at the top institution on the planet for Operations Research and Industrial Engineering so I’ve had an insane amount of exposure to this problem at the terawatt hour scale. I outline principles of engineering in another post on this blog. Without modeling everything out and simply using a few basic “heuristics” we save ourselves time and can know that manufacturing won’t come back to the USA at any relevant scale. [In one city in China, they allocated almost $1T to build out infrastructure.] I intend to dive into the tenets of why I don’t believe manufacturing will relocate and as well why there will be many failures and countless delays.  We used to build things in this country…. [Got to put my hands on this one with a fellow lacrosse teammate who became a NASA mechanical engineer. ~$500k+ motorcycle with carbon fiber. Oh the good old days….] The America you Know is Shifting and 50%+ of GDP will Become Gov’t Expenditure[Image]The tribe and crowd of folks hyping American Dynamism comes at a time when 50%+ of GDP will become government expenditure. “Government spending in the United States was last recorded at 37.0 percent of GDP in 2022 . Government Spending to GDP in the United States averaged 25.66 percent of GDP from 1900 until 2022, reaching an all time high of 47.66 percent of GDP in 2020 and a record low of 6.55 percent of GDP in 1907.” I’ve stated over the past 5 years quite publicly that America’s burgeoning infrastructure, healthcare, and pension debt/taxpayer will become onerous and leech into quality of life. A few good data sources to dig into some of this are TruthinAccounting, OpenTheBooks, Adam Michel at Heritage foundation writes, and of course my friend and mentor Adam Townsend.  I believe that Ferguson, Missouri Riots Were Partially a Symptom of America’s Burgeoning Localized Debt[Image] https://www.youtube.com/watch?v=QYszZZg7yxA What rarely gets discussed is the relationship between the region’s debt and how the city got 30% of its tax revenue from ticketing and how that made policing and life onerous in the city. Debtors prisons, municipal violations, etc…. Ask yourself, why would you put your manufacturing facility here in the USA when you know there's a thermonuclear tax bomb headed your way?   Anyhow, I digress. Reasons America Won’t Reshore Manufacturing Anytime SoonLet’s dig into the tactical reasons why American dynamism won’t happen at any relevant scale anytime soon. I’ve espoused this viewpoint aggressively here, but I’ll summarize and try to add more color here.  1. EEOC(Equal employment opportunity commission) overreach  2. Healthcare costs...diabetes hurts all.  3. Pension and Infrastructure risk 4. Materials Energy Balance 5. Onerous Occupational licensure  6. No federal budget  7. Strong USD  8. STEM Talent shortage 9. Asymmetric trade agreements EEOC Mandates & Directives[image.png] Employing, hiring, firing, and the associated junk fees in the USA of getting labor to complete a job are onerous. We’re becoming Germany where employing people is a labor of dealing with labor despots. The latest set of EEOC mandates are a pile of risk rife with lawsuit issues, and the American manufacturing sector is the last area where capital will want to be deployed.  Healthcare Debt[Do you recognize this man? He's more powerful than you know. Most of you have never seen a photo of the man above and have no idea who he is. Some of you will google him but there’s more to him than meets the eye.] America is the only healthcare insurance system on the planet whereby the healthcare insurance companies make money every time you’re prescribed a drug, therapy, or treatment. Full cartelization exhibited by raw complexity. [image.png] The point here is that America’s healthcare system is fully cartelized and a burden on anyone with full time employees. [Image] Adam in his brilliance reminds us that diabetes blows up actuarial tables. He’s likely one of the few people I know who knows the art and science of Obamacare.  I remember hearing that about 2/3rds of Californians cannot afford health insurance and subsist on medicare and medical, need to go dig the figure up. (Please do tweet it to me if you see it)  Pension & Infrastructure Risk [Image] There’s a nurse in the California public medical system that makes $500k/yr and lifeguards who make $300K+/yr. I could go on and on about this but you can read more here, here, and here. Why California Is In Trouble – 340,000 Public Employees With $100,000+ Paychecks Cost Taxpayers $45 Billion “Here, in part, is why California is asking for taxpayers help. Our auditors at OpentheBooks.com found truck drivers in San Francisco making $159,000 per year; lifeguards in LA County costing taxpayers $365,000; nurses at UCSF making up to $501,000; the UCLA athletic director earning $1.8 million; and 1,420 city employees out-earning all 50 state governors ($202,000).”  The TLDR here is that there’s a growing “caste” system in the USA and it is bifurcated by the following:  • Licensed vs. Not • College debt vs. Not  • Hard Assets or Not • Pension/Gov’t Employee/Contractor or Private Sector  • 1099 or W2 • Blue state vs Red state  • Nuclear vs. Joint family structure  Adam does the best job of paraphrasing America’s infrastructure reality, you can enjoy it here and here. Why would a competent manufacturer want to take on these labor inventory risks? (Hint: They don't.)  Materials Energy Balance [Entire novels can be written on the art and science of materials and energy balances. At some point in the future, I will write on how the St.Louis federal stress index and the econometrics of energy and materials balances can be used to predict wars amongst humans.] All systems of energy can be evaluated in terms of the following:  1. Farm to fork cost/kwh  2. Chemical, Geological, and Industrial Process footprint  3. Energy Grid Stress  On the 3rd component of the systems energy evaluation - we must evaluate how generators a. synchronize voltage b. phase with the grid c. storage When you factor in how all of these work, the net conclusion is that it will cost too much energy to dislocate manufacturing systems and move them to the USA in terms of kilowatt hours at any level of relevant scale in any reasonable amount of time profitably. It will be physically impossible with our energy math and as well with America’s energy grid infrastructure to do this in a timely fashion. On a side not, America will have more brown outs and black outs as its grid with its transformer architecture and proliferation cannot support the burgeoning burden of lithium batteries and renewables on the grid. [image.png] [Fixing America's grid is going to cost a lot of money and EVs are a sort of Hari Kari on American taxpayers. Utilities are gov't backed monopolies.] Occupational Licensure40-ish years ago, 1 in 20 Americans required an occupational license to do their job. Today, that number stands at 1 in 4 Americans. In California, that number is 1 in 3. Some attribute California's high recidivism in part to this licensure. [image.png] "66 occupations have greater average licensure burdens than emergency medical technicians. The average cosmetologist spends 372 days in training; the average EMT only 33. That’s a lot of licensing. In the 1950s, only one in 20 U.S. workers needed the government’s permission to work within their occupation. Today it’s almost one in three. [Image] Intrusive regulations, licensing and extraordinary bureaucracy and irrationalities are not a civic virtue, rather it is a lobbied effort to suppress competition, keeping a high barrier to entry for those aspiring to these occupations—minorities, those of lesser means and those with less education. Industry associations benefit by preserving an artificial scarcity, local government collects fees for licensing. It’s a win, win, lose The licensing of lower-income occupations is irrational and arbitrary." I've quoted the above from this post by Adam. I was aware of the problem, but not aware of its depth. The USA is the only country in the world where a plumber can become a multimillionaire. Why you might ask? Occupational licensure. [Image] My plumber in Texas sold his Bugatti car to Canelo, the boxer in Mexico.  No Federal BudgetA lack of a declared federal budget. Adam nails it again. [Image] Strong USD I could go on and on about why the US dollar reigns supreme and so could Adam and our dear friend Dr.Anas Al Hajji. I recommend reading their post on the US dollar and certainly following both.  Building manufacturing with a strong indigenous currency is like fighting gravity. Nonsensical move.  Some of the more blaring reasons it's difficult to dethrone the USD:  • Something like 95%+ of the world's commercial credit is issued in USD. (doesn’t have that stat, but some context) • This stat was originally shared with me by a friend who runs a fund that is a top 25 holder of US single family homes.  • SWIFT/ACH network enforcement via FBI is serious and banking insurance is serious  • Traded Globally[Image] I don’t believe given the other variables of the world, that it’s possible to have both of the above simultaneously for more than a few decades.  STEM Talent Shortage[Do you know the answer? Did you know it in High School?] The evidence is broad and far and wide on this one. We no longer have a technocratic school system in the USA, the evacuation of 60k factories from the USA led to more finance bros running the asylum. The number of CEOs of publicly traded companies who are bean counting CFO / Bookkeeper types would astound the most of you. The max intellectual output of most of them is paper pushing nonsense that is the opposite of the enterprising James Lapeyres of the world. (Go read on him…his story is riveting) In the words of Lee Iacocca, where have all the leaders gone? [1390043401061728 (1).mp4] I don't worship Lee the way he'd probably want to be worshipped, but he brings up a salient point here, we have a trade asymmetry that has to be addressed in the long run.    [The overwhelming Montaukification of our executive class is a problem.] Most American degreed STEM grads cannot pass a PE(professional engineer) exam. As a test to future employees in different companies, I’ve frequently given them JEE questions, they can’t pass and this is India’s college entrance exam to get into the top technical institutes. I’ve done this with students who are graduated from MIT, Google, Stanford, Harvard, etc…. Not all STEM programs are of equal caliber. You’re deluded if you believe otherwise. Asymmetric Trade Agreements All or most of our trade agreements allow other countries to dump goods on the USA. KORUS, NAFTA, CAFTA, TPP, TISA are all just basically acronyms for “let other countries achieve trade surpluses with the USA and they end up exporting way more goods to the USA than we export to them.” Closing Thoughts  The only way to address a problem is to frame it well. One of the mantras in engineering is that you’ll spend most of your time framing and measuring a problem before solving it. I think most of the American Dynamism crowd is well intentioned, but horrifically deluded about how the world works if they’re not talking about any of the above items. We have to reframe the conversation with hard STEM talent that has actually completed industrialist workflows in the past leading the charge.  If you're working on hard tech engineering, feel free to reach out to me. 

This post was originally written here and got bookmarked over 500 times, way more than I expected.  For the engineers who wanna build physical things at a large scale in the USA (not using pension money or gov't or VC money)/ ie - being resourceful, here's some brouhaha for ya...... For everyone else, this will put you to sleep........ I have had the privilege of working with squadrons of operations research, applied math, and materials engineering PHDs and more. I'm one of 60 engineers on the planet trained in my specialty (operations research + polymer eng.), 1 of 20 in the USA, and 1 of 3 that has designed, scaled, and optimized 100M+ tonne systems multiple times over. My predecessors in some of the companies were ex-CIA and some advised congress on issues related to nat sec. Learned a lot from them. Things to know/learn/be cognizant of: 1) Objective Functions - declare a specific objective(https://byjus.com/question-answer/what-is-the-objective-function-in-linear-programming-problems/#:~:text=The%20real%2Dvalued%20function%20whose,are%20constraints%20and%20are%20variables….) 2) Constraints (https://leanproduction.com/theory-of-constraints/…)  3) How do you measure reality? (read the book "A measure of reality")  4) Local operating environment variables -- you will always unravel the taxonomy and schema of both competitors benchmarking and the environments themselves iteratively. ie leave room to add more columns of data to your modeling and repeat til you have a full picture of the data model and operating environment.  5) Model for weather, breaks in transportation, and feedstock volatility. (Example, I designed a facility that utilized liquid nitrogen to make a byproduct of a polymer --- the O&G prices and futures and quantity I could buy in influenced the viability of the overall polymer's end use case)  6) "Only the paranoid survive." - You need to have a working memory of thousands of real world technologies and a benchmark of their EROI (Energy return on investment)  7) Always, always, talk to the people on the front lines and incentivize their participation in the outcome. Your models will improve.  8) Test your CFO on combinatorics and prob/stat - figure out of they're a glorified bookkeeper or an actual wrangler. (Can they do regressions?) etc.. 9) Deduce the cost of the Bill of Materials and its supply chain not in terms of dollar costs, but in terms of kilowatt hours - this gives you negotiating room with suppliers and service vendors as you can deduce their relative hard costs. Track back to costs. You'll have to put elbow grease into looking up prices on electricity across your forecasted locations in the supply chain. This one thing will give you a basis of measurement that others cannot wrangle.  10) Model feedstock volatility against the Federal Stress Indexes on the dollar.  11) Understanding feedstock volatilities will take you a lifetime, but you need to with relative certainty have low, medium, or high conviction and know where you sit in that chain.  12) Getting verbally violent pseudorandomly with suppliers when all things are calm will prevent headaches in the future. Keep them active, they will get lazy. This is the annoying cost of doing business. Also monitor their churn.  13) If a vendor is telling you that a machine has a max throughput, they're probably lying to you.  14) Throw anyone out of your org if they call themselves a polymath or obsess over the notion of IQ.  15) An engineer who does not break bread with their technicians or doesn't know them well enough is a recipe for danger int he facility, fix immediately.  16) if you want data across the org, assume you'll need a political or violent (not physically) trojan horse to obtain it.  17) if a data request takes longer than 3 days, then the org has to be ripped apart and fixed from the silicon up so to speak.

Kumar’s Natural Gas Sector Bull Thesis Disclosure: My gambles here from least risky to most risky were $FCG, $UAN, and $TELL. I now believe the nat gas bull thesis is strong, but I believe picking the winners is harder now and the thesis is now mainstream. This is not investment advice.  “"In short, China 1000x'd the number of compressed natural gas vehicles in their country in 15 years. They rely heavily on imported natural gas. America is the mecca of natural gas with 65M homes that have natural gas piped in. We often ask 'who killed the electric vehicle' when we should ask 'who killed the compressed natural gas vehicle."   - Me in early 2019” [Image]Not investment advice.  Tldr: My ongoing thesis is that natural gas consumption / kwh will go up for mankind as a %. Feel free to dm me at twitter.com/datarade or tweet to me there.  I began with this thesis in December 2019 and made my bets right around then to March 2020. Published here in mid-2021-ish.  • Nuclear power plant shut downs, delays, commissionings, regulations  • There are ~440 nuclear power plants on the planet.  • Currently it’s difficult to track, but I estimate that there’s ~40 that are being shut down and deactivated. Would love to get more accurate numbers on this.  • IAE.org OR World Nuclear.org  • Every plant shutdown creates an additional 100M-200M cubic feet of daily natural gas demand.  • 3.8% CAGR - https://www.alliedmarketresearch.com/nuclear-power-plant-and-equipment-market#:~:text=The%20global%20nuclear%20power%20plant,3.7%25%20from%202018%20to%202025 • I believe that regulatory power will act against nuclear energy across the world, everywhere except China.  • In the United States, Only 2 nuclear plants were built in the last 25 years. Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA) .  • Even if publicly gaining popularity, nuclear power plants have a strong NIMBY effect. Often localities do not wish to have nuclear power plants.  Air Quality Problems  • breezometer.com • Viable non-US nation states will provide increasing incentives to clean up air quality issues. Natural gas burns clean.  Natural Gas Vehicle and Station Proliferation  • Egypt • Egypt is going to 1k stations by the end of 2021. They currently have 200.  • Egypt is subsidizing the conversion of 400k vehicles, approximately 1 in 10 vehicles in the country.  • https://www.zawya.com/mena/en/business/story/Egypt_plans_to_operate_1000_natural_gas_fuelling_stations__Minister-SNG_218134824/ • All new cars sold in the country are mandated CNG: https://www.bloomberg.com/news/articles/2020-07-12/egypt-to-require-new-vehicles-to-run-on-natural-gas-sisi-says • India • India is going from 2500 stations currently to 10K in < 8 years.  • https://www.financialexpress.com/industry/govt-targets-10000-cng-outlets-in-five-years/2080336/ • India has 2,713 stations as of January 2021 • 60% of the gasoline and diesel prices are driven by tax.  • CNG is effectively 1.5x-2.4x cheaper than diesel and gasoline right now.  • China  • China went from 6000 CNG vehicles to 6M CNG vehicles from 2000 to 2017.  • 1000x multiple in 17  years. I don’t know the numbers right now on CNG vehicles and stations in China.  • By the end of 2018, ownership of motor vehicles in China reached 327 million units including 240 million cars, and accordingly there were up to 110,000 filling stations and at least 9,000 natural gas stations across the country, according to a new reports by Research and Markets. • https://www.petrolplaza.com/news/21890 • The South China Sea has 180T cubic feet of natural gas.  • China consumes 10T cubic feet of natural gas annually.  Natural Gas Peaking Plant expansion  • CAGR of ~5% • https://www.grandviewresearch.com/industry-analysis/natural-gas-fired-electricity-generation-industry Other • Fertilizer 2.5% CAGR for the next 5 years.  • Renewables Proliferation = more natural gas consumption/kwh • 36 states have substantial renewable goals due by 2025. State Renewable Portfolio Standards and Goals (ncsl.org) • Many states have renewable mandates due in 2025 and 2030. • For the grid to function in a way American’s expect, many states can not truly hit their Renewable mandates without relying on stable sources of energy (such as Nuclear or fossil fuel).  • Out of the big 3 fossil fuel, natural gas emits the least amount of carbon. • To fill in the gap between mandate and reality, states/regulatories may start redefining natural gas as green. • Natural gas could be a major player in the “renewable” space ie how the US’s oldest source of energy “Wood” has been redefined as a renewable source “Biomass”. Biomass explained - U.S. Energy Information Administration (EIA) • Because natural gas is simply hydrocarbon, there are already countless “green” ways to produce such as from food waste, anaerobic digestion etc even without a re-definition.  • Tax Policy - Governments provide discounts to Natural Gas adopters vs. Gasoline + Diesel adopters • Natural Gas Commercial vehicles have lower maintenance costs.  • Natural Gas Pipeline expansion • 3.4% CAGR • https://www.grandviewresearch.com/industry-analysis/gas-pipeline-infrastructure-market#:~:text=Report%20Overview,3.4%25%20from%202020%20to%202027 • The reason the USA has not adopted CNG vehicles at scale is completely politically driven and has little to do with economics or technicals of natural gas. https://news.ycombinator.com/item?id=1045211 • The median/general break even price for natural gas producers is $3.00 per MMBtu Are Natural Gas Prices Below $3 Sustainable? - Enerdynamics Added by people other than Kumar:  • For nearly 2 entire  years (2019 and 2020), natural gas was below the general break even price. And much so in certain months.  • Haynesville break-even is as low as $2.05 with median near $2.25  • Marcellus break- even is as low as $1.55 with median near $1.85 • For the past 6 years, natural gas prices have been near or the break even point. https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm • (opinion) To recoup past losses, suppliers will naturally increase price (or shut down) irrespective of many demand trends for a sustained period of time.  • Natural Gas supply (U.S.) • ~135 Bcf of supply from US (from Rystad Energy).  • Permian operators will be able to ramp gas production (+25 to 35% in next 3 years) with new pipelines going to Mexico, Corpus Christie (LNG export), and local markets • Haynesville operators have increased rig activity and location advantage to Gulf Coast LNG export • Marcellus and Utica (North East) will meet US demand but actively seeking ways to get to Gulf Coast via new gas pipelines • EQT largest independent natgas producer; using electric & dual-fuel fleets to complete wells and others watching to see how the company reduces diesel costs and increase use of “field” natgas • Global: 10 billion boe (barrels of oil equivalent) discovered in 2020  • Risk:  • FERC implementing new policies to restrict pipeline development;  • bitcoin and other crypto miners burning gas (first “stranded” or “to reduce flaring” in permian, perhaps ultimately gas that’d otherwise be economical to take away)  • US Commercial Vehicles, Demand • Logistics continue to grow to increased imports, ecommerce, and short-haul demand • LNG / CNG has better energy density and fits heavy-duty long distance requirements • Dual-fuel engines from CAT are aggressively being adopted by oilfield companies. CAT is deploying across Mining and other industries • Fedex contracted CNG truck fleet for long-haul and electric fleets for short-haul • Top 3 commercial vehicle fleet have ~300,000 trucks/tractor-trailers • LNG Supply / Demand • LNG production is expected to reach 672 Mt in 2040 with US, Middle East, and Mozambique. Good graphic on gas markets supply/demand  • China adding 2-3 LNG terminals and currently has 22 LNG plants able to receive 81 Mt/y • CNPC expected China's pipeline gas imports to reach about 100 Bcm by 2025, nearly double from the 2019 level • Risk: US policy, if Biden limits export capability • Idiosyncratic market • Important to understand that natural gas/LNG market is not analogous to oil market • Difficult to transport and store; high fixed costs of midstream, floating and fixed liquefaction, regas, etc. infrastructure • Mostly producers and end-users drive the market; unlikely there will be a “global benchmark price” or hyper liquid spot/derivatives market that resembles Brent or WTI • Risk: US policy, if Biden limits export capability • Global Natgas Demand • S&P estimates ~5% increase in 2021 • Shell demand estimates • 1% global CAGR in • Asia  • 3% CAGR gas demand • 4% CAGR lng import (600 BCM by 2040; currently ~ 300 BCM) • BP  • statistical review of world energy  • https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-full-report.pdf • Renewable Natural Gas • Not sure if you include this but methane from landfills have lower carbon intensity • RNG primer - https://www.mjbradley.com/sites/default/files/MJB%26A_RNG_Final.pdf