Why I'm (finally?) making the leap

How I got here and what you can expect from this publication

As a gas market analyst, you learn pretty quickly about seasons. But more recently, as I struggled with the decision about whether to strike out on my own, a mentor gave me some good advice that I hadn't considered before: life has seasons, too. And at the end of the day, that’s what underpins my (finally?) striking out on my own: that it’s the right time in the natural gas industry, and the right time in my life.

Why it’s the right time in the gas industry

Needless to say, I’m not breaking any new ground when I say that the gas value chain is undergoing rapid change. Both the power and LNG industries are counting on strong gas supply growth—but low-cost inventory is running thin, and the commercial model for pipeline development is broken.

More to the point of this publication, the industry will need new tools to answer new questions. When the first wave of LNG projects came online, surging Haynesville productivity, booming associated gas volumes, and Appalachian pipeline reversals all kept the market well-supplied. Gas-fired generation grew quickly, but with minimal capital expenditures, due to underutilized combined-cycle capacity.

Now, none of those conditions are in place, which is going to create all kinds of stresses through the gas value chain: volatility in gas-fired generation compounded by volatility in heat rates, new null points and constraints on existing gas transmission systems, new pipeline and LNG capacity development, and most significantly, an enormous call on higher-cost gas supply.

Why it’s the right time in my life

When I started college in Houston in 2002, oil was ~$30/bbl, horizontal drilling was in its infancy, and the job market was reeling in the aftermath of Enron. By the time I graduated in 2006, oil was ~$70/bbl, the Barnett alone produced more than 1 Bcfd, and finding a job was much easier. Now, Baby Boomers in the oil and gas industry have mostly retired, and few Gen Xers were ever hired, so we elder Millennials, now in our early to mid-40s, have as much experience as anyone.¹

For me, that has been several challenging roles that have given me insight into the North American gas industry and everything related to it.² I’ve used and developed all kinds of models and tools to capture dynamics across the value chain.³ And I’ve translated that expertise into market insights and, later, into relationships as a trusted advisor and thought leader.

In 2017, I toyed with the idea of doing something like this. I’m glad I didn’t, because in retrospect, I lacked both the expertise and the capability to build an independent business. At WoodMac, I had the great fortune and privilege of learning from the world’s best analyst, teacher, and mentor, as well as a range of experts in oil, power, coal, and LNG. But I didn’t know nearly enough about Lower-48 E&Ps, and I didn’t have strong enough relationships to launch a business from scratch.

I believe five years at RSEG/Enverus and Rystad have addressed the former, and I’ve tried to focus more on the latter. But the equally big enabler is technological: Substack for distribution and AI for technical guidance.⁴

I’m also more humble—partly from aging, and partly from some misses. Small ones, like thinking VentureGlobal wouldn’t renew enough SPAs to take FID on CP2.⁵ Bigger ones, like building many viable product proofs-of-concept but not any comparably successful capital-P Products, despite working at the three best places to do it. Perhaps that was because I joined the company too late (or too early) in its investment lifecycle. But maybe it’s because actually my core skill set is adjacent to but not actually in product development:

• digging into issues in the gas market

• writing and talking about it in a way that’s digestible and interesting

• identifying the algorithms and products that the industry could use to answer these questions

• thinking about and translating that analysis into both strategic and tactical advice for participants across the value chain

So, what exactly is it the right time for?

I’m hoping to answer a few questions with this publication:

• Whether the research alone is a viable business. I don’t need to match my W-2 income, but if hardly anyone wants to pay much for it, that’s a sign I should focus on something else. I enjoy writing more than most quantitative modelers, and I tend to delve deeper into the numbers than most writers, so I would love for this to be my vocation for the rest of my career.

• And if it is, whether subscribers would want something broader or deeper, whether they’d want more attention on production or power or LNG

• Which of my potential product ideas could have a market—more to come on that in a future essay

What you’ll get from me is the same thing you always have. The depth of analysis and experience, but also the more measured approach—hence the play-on-words name—that comes from almost 20 years doing this. I aspire to be someone⁶ who is:

• widely respected and read for original thinking and thought-provoking ideas

• willing to take risks at the expense of not always being correct and/or loved

I’ll miss being part of a team—the exchange of ideas, the collegiality, the way it sharpens analysis. I hope that this community will become a new kind of team.

1. In my first months as a gas analyst, I was responsible for tracking REX construction from west to east and Sabine Pass’s in-service as a regas terminal.

2. Oil drilling, power generation, LNG, etc.

3. LP models of the global gas market and of the North American gas and power grids; algorithms to estimate which gathering system a well is tied into; tools to calculate the supply mix at every point on the eastern gas grid; fundamentals-based models of prices and risks; a truly staggering—on some level, depressing—number of production forecast models and regional supply-demand balances

4. I joke sometimes that I can code just well enough to be dangerous

5. More on recent LNG FIDs soon!

6. I originally wrote “a Matthew Yglesias of the natural gas industry” before deciding that my readership probably doesn’t overlap much with his and therefore that the reference wouldn’t land!