Moratorium on New Turkey Deliveries

November 26th, 2019 |

As 2019 winds down and we begin to reflect on stories that shaped the natural gas market throughout the year, the struggle between The State of New York and National Grid resonates as particularly vexing. The State of New York continuously denies permits for new pipelines that would allow cheap and reliable natural gas to serve its residents, and then threatens National Grid with the revocation of its license to operate in New York if the company cannot provide more cheap and reliable natural gas to its residents. HMMMM…. a real head-scratcher.

But today, as is BTU tradition this time of year, we take a more whimsical look at the challenges faced by our friends in New York by analyzing* the impacts of a hypothetical New Turkey Delivery Moratorium (NTDM) in the Empire State.

According to the latest census estimates, New York is home to a little over 19.5 million people, trailing only behind California (~39.5 million) and Texas (~28.7 million). If we were to assume that only those who ate turkey in 2018 were going to be allowed to eat turkey going forward, also known as Proved Developed Eating (PDE), we see a divergence of nearly 34 million pounds of turkey consumed annually by 2030. This is based upon the average consumption of 16.3 pounds of turkey annually per person and an average population growth rate of 1% as shown in the chart below. BUT…don’t forget your natural decline rate of ~165,000 turkey eaters / year in a NTDM scenario. Considering the average turkey weight is now topping 30 pounds, this equates to ~1.1 million surplus turkeys in 2030. What’s the marker on the overseas, liquefied turkey market these days anyway???

While we don’t have to worry about this hypothetical turkey shipping arbitrage opportunity, I’m guessing the National Turkey Federation (which is the source for many of the statistics in this piece) is keeping an eye on the recent popularity of lab-grown or vegetable-based meat substitutes.

And as pleasing as commenting on Turkey Train 2 expansions along the East Coast would be, BTU will stick with energy analysis for the time being.

Happy Thanksgiving from BTU Analytics!

 

*analysis not reliable in any way

 

Author: Mason Ender

Mason Ender is a partner at BTU Analytics, LLC and managing director of business development overseeing client relations, marketing, and sales. Prior to joining BTU Analytics, he was the Manager of Sales for Bentek Energy, a division of Platts. Mason has worked with energy companies both domestically and internationally to implement effective fundamental energy analytic solutions. Mason also routinely presents energy market dynamics informing the market of upcoming risks and opportunities.