Consider that a million btu in oil costs $16.37 (average of $95 dollars a barrel, divided by 5.8 million btu). This means that Americans, who enjoy low NG prices in part because the resource is not exportable (yet) from the lower 48, can take their btu from natural gas instead of oil at a 75% discount. Exciting yes? Well, sort of. The problem is that the United States doesn’t know, just yet, what to do with its natural gas. In addition, the US economy doesn’t have enough growth in its power and manufacturing sectors to demand more natural gas, that would spur a faster transition away from oil. The result is a kind of stasis, in which a consumption-led economy is still trying to operate with oil. Previous energy transitions, on a historical basis, are instructive here. For example, it took Britain decades to transition from Wood to Coal–even though coal was cheaper on a btu basis. Sound familiar? The same analytical error that I made in 2007–that the price spread to oil would force more rapid natural gas adoption–is made now, routinely, in investment circles. But the problem of energy transition is a problem of the built environment. Europe and Japan are in position to uptake more NG as their transport sectors also run on power. The United States, however, is not. A revolution–not a thoughtful and slow transition–would be required to shift the gargantuan btu the US uses in oil, over to natural gas. I’ll make an easy prediction: exports of LNG volumes from both Sabine Pass in Louisiana, and from Kitimat, British Columbia will be well underway before the United States–either through public policy or the free market–has transitioned any meaningful new demand to natural gas.