On today’s show we talking about the impact of energy policy on housing. The fact remains, the US has underinvested in oil and gas since 2015. Despite the high prices currently in the market, the number of new wells being drilled is not quite enough to keep production levels constant on a year over year basis.

The US currently produces about 20% of the world’s LNG, and over the next 6-7 years that will increase to producing about 30% of the world’s LNG. That will make the US the dominant player. Even with that, the US will still keep the majority of it’s natural gas for domestic consumption. The constraint on liquefaction capacity will ensure that domestic prices for natural gas will still be lower than global prices for natural gas.

We still have 40% of the world’s energy being consumed by 15% of the world’s population. As emerging market economies grow, so too will their demand for energy.

There are a lot of movements across the political spectrum to invest in green energy technologies. I’m here to tell you that these will only truly win when the economics of energy efficiency.

When you can convince the guy on the streets of New Delhi with two bricks of coal that there is a cheaper alternative than cooking on two bricks of coal, then you have a realistic shot at true improvement of greenhouse gas emissions.

We don’t have viable sources to make up for the structural shortage we are experiencing globally at the moment, let alone displace oil and gas with green alternatives at a rate that will replace expansion of emerging market economies like China and India.

Energy prices have the makings of protests in Europe and these are spreading all over the world.

North Americans are the largest consumers of energy per capita in the world.

While the pain of $7 a gallon of gas is real in many parts of the US, we have not seen riots over this yet. But it’s possible. I believe that higher energy prices are here to stay for the foreseeable future.

Much like in the 1970’s when the US lost its dominance of the auto industry by resisting energy efficiency, we are at another inflection point where energy efficiency and energy transitions become important.

In the world of real estate, this is best addressed through design in new construction, but is difficult to retrofit to existing buildings.


Host: Victor Menasce

email: podcast@victorjm.com