Cramer: A true believer in natural gas
Jim Cramer | [email protected]
Right now, with the plant 30 percent built, Souki's brimming with optimism about the demand and laughing at stories about how we are running out of natural gas far sooner than anyone realizes, as a piece in the Financial Times said last week.
In fact, he goes a step forward. He says we better hope more terminals open because right now we are flaring off so much natural gas in the process of drilling for oil that it's an environmental hazard. He says if you fly above Texas you see bright lights where there aren't any cities and that's because of all of the flaring from the Eagle Ford.
We have ethane and methane that we can't use as the big chemical companies aren't building enough and fast enough to take advantage of it. That's got to be sent away too.
And in a couple of years we will become one of the world's largest exporters of crude because we have the wrong crude here, the light sweet crude that is easily refined elsewhere while we import the kind of crude from Saudi Arabia that's easy for us to process and refine.
It is easy to dismiss Souki. He's the only one saying that we have a surfeit of not just natural gas but oil coming. But five years ago when he predicted the surge in natural gas everyone had a good laugh, in part because he, at one point, was attempting to be a huge importer of natural gas because it looked like we didn't have enough. His direction switch made people uneasy.
It turned out to be right.
Now, while no one was predicting a nat-gas surplus, Souki was able to use his facilities to get first-mover advantage to switch direction. He said he believes that those protesting the export of natural gas don't understand that we have so much of the stuff that we are only drilling the minimum right now because of the lack of storage.
Plus, he says there are plenty of chemical companies that understand that it should be shipped because they are free traders and that the whole brouhaha about the shipping of nat gas is truly overdone, given how few plants will actually be built.
But he envisions a world where the United States is about to become a global power in energy that very few companies and politicians are ready for because they don't understand how truly plentiful our oil and gas is.
Cheniere's had a big run. It is deserving. I think it should pause here. But when listening to Sooki's plans, you know that ultimately his company's the winner if the surplus is true. And he's made me a believer for certain.
Disclosures: Cramer's charitable trust has no positions in the stocks mentioned.