Building better tools for gas market analysis
What you can expect from this publication
Understanding the North American gas market requires not only numerous models1 but a framework that connects them. And as many of you know, I’ve spent my career developing analytical tools that link quantitative modeling with a practical understanding of how industry decision-makers think.
With Measured Depth, I aim to combine commentary, visualization, and modeling to address the most challenging questions in the gas market — as clients have been trusting me to answer for many years. This post outlines the three main focus areas that will comprise this publication, as well as the types of analysis you can expect. Some of them I can address on my own, whereas others I’d need a partner or even a full team.
Market commentary
How I’ll be different: Producers, midstreamers, and consumers have numerous options for gas market commentary, many of which have been around since the deregulation of the gas market. And having worked at most of the best energy research firms in North America, I think they all would tell you that, if they were redeveloping their offerings today, the deliverables would look different. Selling research subscriptions for tens of thousands of dollars per year has always been difficult, and it’s only getting more so in the age of AI. At the same time, these offerings have a subset of clients to whom the PDF reports and Excel deliverables are valuable, such that the research firm can’t realistically discontinue them without compromising revenues. So their incentive, then, is to make the regular reports as formulaic as possible, at the expense of innovation or insight. My hope is that, with a much lower price point, I can focus on addressing the most difficult questions. I also hope to have a more diffuse customer base, such that I can be more direct and — when called for — critical.
Future topics: Broadly speaking, I think the issues of most interest fall into three categories: analyzing recent data, understanding the latest news, and taking an informed view on what comes next.
What does the latest data mean?
How mild was this summer really?
How is rising solar generation affecting how we should interpret the weekly gas supply demand balance?
What does the latest news mean?
Why have LNG FIDs been continuing? Who is on the hook?
What does the delay in gas CCs mean for gas demand?
What’s coming next?
What is going to happen to Coterra?
Will we have a global gas market?
Modern pipeline platform
How I’ll be different: Working at RS Energy Group and using the Prism platform was a life-changing experience — seeing how a team could transform market-leading intelligence into intuitive software that simplified clients’ workflows. In the early to mid-2010s, everyone knew that Ross Smith was the industry leader in onshore North America research. But no one outside of that team was thinking that what the industry really needed was another well data provider; we already had several of those. I feel similarly about gas pipeline data today. Yes, the market is mature, and everybody already has an EBB data provider (or two). However, despite the wealth of available data, the offerings remain essentially unchanged, even as modern computing power dwarfs what we had 15-20 years ago. I think the index of customers in particular is a rich dataset, but one that is difficult to interpret quickly or easily.
Future topics:
Where are the null points on Transco?
Who holds the most valuable capacity on TGP?
Why it’s so hard to build a pipeline, and what the latest news suggests about how this could be changing
Long-term supply modeling
How I’ll be different: The biggest question in the North American gas market today is a simple one: where will the gas come from? Everyone knows demand is growing, pipeline development is difficult, and well results are deteriorating in key gas basins. However, what that actually means in terms of which assets — both upstream and midstream — are best-positioned remains an open question. Broadly speaking, I think this is because the firms that have the best handle on inventory don’t have a comprehensive understanding of North American gas flows, while conversely, the companies that delve deeply into forecasting future flows lack the spatial inventory analysis needed to quantify the supply curve in sufficient detail. Of course, I can’t develop my own spatial inventory estimates. Still, I see an opportunity to leverage my background in gas supply and flow forecasting with a company that has expertise in spatial inventory.
Future topics:
Why there’s no such thing as a mid-cycle gas price
What gas price is needed to grow Haynesville production 1 Bcfd annually?
The Permian is going to be a non-associated gas play
If you're also asking these kinds of questions, please subscribe. I’ll return to this framework in future posts, as I use these analyses to qualify interest in these different topics, and for this kind of offering. I welcome any feedback in the comments section here, via email, or I’m happy to set up a call to discuss in more detail.
Company upstream coverage, future inventory by interval, a power dispatch model, daily pipeline scrapes and balances, an LP gas flow model, enough connections in the LNG world to know which projects are credible, a Monte Carlo view of weather risk, and (probably most difficult) a price-based forecast of upstream activity beyond the guidance horizon. Various energy software/research firms have different strengths and weaknesses along these dimensions; I think all of them would acknowledge that none has brought all these pieces together.
Re “daily pipeline scrapes and balances” I’m always baffled at how different providers report daily gas production numbers that can vary by a couple percent between the lowest estimate and the highest (usually Bloomberg). It would be interesting to know why it’s so difficult to estimate daily production.