 So, we've got, we've been told that there's a massive natural gas crisis. We've been told that this is going to be a disaster, that, you know, there's no way to solve it, there's been panic, people have been upset, people have been, I mean, it's typical of the media to blow this out of proportion, you know, people are going to die, Europe is freezing, energy crisis in Europe, we're totally dependent on Russia, we can't survive without Russia, if we don't sign a peace agreement tomorrow with Russia, and oil and gas supplies, gas supplies will come, you know, Armageddon is going to happen. And this is consistent with the general kind of, you know, general appetite for catastrophe that exists in the world in which we live. We're always seeing catastrophe, it's just around the corner, Armageddon is going to happen, maybe not this year but certainly next year, maybe not because of this thing but because of that thing. We are an interesting species that seems to believe that the end of the world in one way or another is always just around the corner, it's always going to happen, it's always in my life that I'm going to happen. So, the whole natural gas problem in Europe has been blown out of proportion and then of course there was the gas pipeline explosion and the conclusion from that was, well now, even if, you know, now the Europeans are finished because they can't get the natural gas from Europe and this is a massive horrific disaster and we should immediately beg Putin to be nice to us and to open up the spigots and provide us with natural gas because who knows what will happen if we don't have enough heating right now. So, that's the story. The reality is, of course, very different because once it became evident that there was going to be a natural gas problem, what do markets do when supply, you know, when a supply of a good we believe are going to shrink into the future yet demand is as high as ever. What happens to prices? Well, prices adjust. Prices start going up, not because right now there's a shortage of natural gas, not because right now there's a shortage, but because we have futures markets, because we can buy and contract natural gas or oil or pretty much any commodity today, we can buy it today but for future delivery, then people bid up the price of natural gas today because they're worried about their ability to purchase it in the future. So, what actually happened to prices of natural gas as this panic came about is the natural gas prices went up. What happens when natural gas prices go up? Well, demand for it goes down. So, people consume less of it. Energy prices went up. People consume less energy when energy prices go up. Consumption of natural gas went down. What European countries did with the fact that consumption went down because prices went up is they started to refill their storage. There was massive storage underground in, you know, in the ground. There are these massive capacity to store natural gas in Europe. And what has been happening is because demand went down because prices went up. European governments are being massively using opportunity, the additional supply of natural gas, funneling it into storage. So, one storage is at record highs. It's, you know, there's some capacity for the storage in Europe that can be filled with natural gas. I think with something like 94% of that, that's way above expectations. That's way above anybody predicted way above what Europe thought would be enough to survive the winter. That was around 80% and we're now at 94%. So, that's one thing that happened. Beautiful how markets work. It's beautiful how prices work. There's going to be a shortage. We raise prices. People start demanding less. That creates the potential for surplus. And that surplus gets driven into warehousing, right? Into inventory, into some kind of place where we can store this stuff. So, that has happened. The second thing that happens when prices go up. When prices go up, people become very, very creative in terms of fighting new sources of gas. Prices went up because the expectation was that gas from Russia would be diminished dramatically because of the war in Ukraine and the supply of gas from Russia declined significantly. So, we're now getting, we, Western Europe is now getting about 25% of the natural gas that it gets in a typical year. So, typically it's getting 75% less. So, what's happening? So, where's the rest of the natural gas coming from? Again, because prices went up, demand went down, that covers part of it. But as soon as it was clear that the supplies from Russia were going to be constrained because of the war in Ukraine, as soon as it was clear that Putin was playing games with the natural gas and it became clear that Europe is incentivized not to buy natural gas from Russia because it doesn't want to support the Russian war machine. Remember, Germany was, I'm not sure what the number is today, but at the beginning of the war was sending $1 billion a day in cash and dollars to Russia in exchange for the natural gas and the oil it was receiving. As soon as it became clear that they didn't want to continue doing that, Germany and other countries immediately start looking for alternative sources of natural gas. It turns out there are other players in the marketplace who have natural gas that challenges how do we get it to Europe. So, for example, the United States has plenty of natural gas because of fracking. We have, in a sense, more natural gas than we consume in the United States and as a consequence, we can export natural gas. Qatar, because it is in the Persian Gulf, it can access natural Gulf from the entire Arabian Peninsula. It has massive quantities of natural gas. Kazakhstan has natural gas. Israel has natural gas. Egypt has natural gas. Norway has natural gas. So, the first thing is increase the purchase of natural gas from these alternative sources. Now, the problem is, as you might know, how do you get the natural gas to Europe? Now, some places have pipelines. Kazakhstan actually has a pipeline that goes through Turkey that comes through the Balkans and actually can access places like Bulgaria and Eastern Europe and supply natural gas to those places through a pipeline that can replace the natural gas that they lose from Russia. But how do you get natural gas from the Persian Gulf? How do you get natural gas from the United States? Well, it's called liquefied natural gas. I mean, it's a pretty amazing technology and pretty stunning, after all. If you think about, I mean, we take these things for granted, we always do, but what happens is that you have these terminals at a port and what they do is they turn the gas into a liquid. They turn the gas into a liquid I assume through high pressure or through massive cooling, but they turn the natural gas into a liquid. They then pipe the liquid onto a ship, a special LNG ship that has the equipment to hold and maintain the natural gas in liquid form. I think it's under pressure, right? In liquid form. Then the ship travels to an LNG port, let's say in Europe, let's say it gets loaded up in Houston and then a ship to Europe where they unload the liquid, turn it back into natural gas and use the pipeline to pipe it to wherever it's needed. So what has happened is that Europe has become much more reliant on LNG terminals. And at the beginning of the crisis, the idea was that not enough of them, but it turns out that there might be enough, I think more being built. Spain, where I am right now, I think has about five LNG terminals, maybe six LNG terminals, and it has pipes where they can pipe it into Europe, into parts of Western Europe. Portugal, where I was yesterday, has a number of LNG terminals, and again they can pipe it into the rest of Europe. American ships have been just back and forth between America and Europe with LNG ships. Now it's interesting, it just doesn't aside. You can take a ship from Houston, Texas, or from Baltimore using an LNG terminal and ship natural gas to Europe, but you cannot take the same ship and ship that natural gas to Puerto Rico or even to Boston because of the Jones Act. The Jones Act actually prohibits using LNG ships, which are not US flagged and not US owned and not US built. There's only one such LNG ships that qualify by all those standards to actually ship natural gas to other ports in the United States. So we can ship gas to Europe, we can't ship gas within the United States using LNG. So stupid. Well, stupid is like too mild of a term, so evil, so anti-progress, so anti-flourishing, so anti, so debilitating for the United States, particularly for places like Puerto Rico, but even for Boston, which in some years was importing gas from Russia because they could get a ship from Russia to come to Boston, but not from Baltimore. Even though Baltimore would be dramatically cheaper because there are no ships that can travel from Baltimore to Boston according to US law. It's moronic. Thank you, spiral days. Moronic is exactly the right. It's evilly moronic. There needs to be a word that combines evil with moronic. It's stupid, a word that combines the two. Anyway, Europe has accelerated the amount of LNG supplies that it is getting, and indeed right now, last I read, there are 34 LNG ships outside European ports waiting to unload the natural gas that they have, and there's so much natural gas flowing into Europe right now that so much natural gas flowing into Europe right now, that there was a day, I think this week, earlier this week, where prices went negative. That is, don't, I pay you not to give me natural gas. I pay you to take the natural gas off my hands because I don't have any way to store it. I don't have any way to put it. Natural gas prices in Europe are plummeted. They are way, way, way down. Energy prices should follow unless, of course, they are being manipulated by governments to keep them high to suppress demand, which is quite possible. But I was shocked when I read this article, but then once the shock went away, I said, I'm not surprised at all. I know, you know that markets work. And when you get a shock like the Russian shock, yes, prices will go through the roof. But what happens when prices go through the roof, in a global market like the market for natural gas? Supply increases. People take the opportunity when prices are high to produce a lot of it and to ship a lot of it so they can get lots of money. They can make a huge profit. Now prices are lower right now, so that's going to go away for a while. The incentive not to ship that natural gas is very low, but the stockpiles are full. All the backup channels for Europe are full. If prices start going up again, as the weather becomes colder and demand increases, those LNG boats can get back in the water because prices will be higher. Again, there are 34 such ships waiting to unload in ports in Europe. They will all be going back to Qatar, the USA, or wherever they came from. Finland has increased the amount of natural gas they are pumping to Europe. Again, other countries like Kazakhstan, Azerbaijan, I think, have increased the supply. I suspect that all the fear among going, all the complaining, all the talk, all the Armageddon, all that, I think Europe is going to be fine this winter in terms of natural gas. I think we're heading towards a recession. It has nothing to do with this, but so we're not going to be fine economically. But from the perspective of people freezing, that's probably not going to happen. Everybody's probably overreacted, probably too much fear. One other thing has happened and I don't know what you want to attribute this to. You could, if you really wanted to, attribute this to climate change or really to not so much to climate change, but to global warming. But the fact is that they fall so far to my immense benefit has been very mild. It's been a warm fall. At least this is what I read. And as a consequence, what happens when the fall is warm? People use natural gas and again, another driver for demand to be low, for those increased supplies to be pumped into reservoirs, pumped into storage. And again, we're going to be fine. You know, all the stories, the constant stories about Armageddon and everything to justify appeasement, everything to justify compromise, anything to justify getting along with Putin. Just we want to fear, fear, fear, fear, fear. The latest, of course, and this will be my transition into, I guess, the discussion about kind of the war update. The latest, of course, is the idea that nuclear war, they're going to bomb, you know, Russia is going to start a nuclear war, we're going to die from radiation. Europe is toast. We should, you know, Jordan Peterson is very good at this. We need to appease the Russians. We need to compromise them. We need to give Putin what he wants, because Putin won't lose. Putin not losing might be nuclear war, or it might mean all kinds of dark things that are not always mentioned exactly. But just fear, the idea of fear, we need to fear the Russians. We need to fear, you know, the winter, we need to fear climate change. And fear is an unbelievable motivation, it turns out. And people are, usually motivated by fear, and they write checks because of fear, they get excited because of fear, they certainly vote over fear. And the consequence of all of that is that, you know, bad policy is enacted, because it's enacted not out of thought, not of reason, not of actually assessing the dangers and the probabilities and the risks involved, but out of just pure fear. So we see, I don't know, Jordan Peterson, we see a long mask, and even Biden himself talking about the brink of Armageddon. Thank you for listening or watching The Iran Book Show. If you'd like to support the show, we make it as easy as possible for you to trade with me. You get value from listening, you get value from watching. Show your appreciation. You can do that by going to iranbrookshow.com slash support, by going to Patreon, subscribe star locals, and just making a appropriate contribution on any one of those, any one of those channels. Also, if you'd like to see The Iran Book Show grow, please consider sharing our content. And of course, subscribe, press that little bell button right down there on YouTube, so that you get an announcement when we go live. And for those of you who are already subscribers and those of you who are already supporters of the show, thank you. I very much appreciate it.