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Cheap Natural Gas Heralds an Energy Revolution
American Thinker ^ | April 11, 2012 | S. Fred Singer

Posted on 04/11/2012 1:28:59 AM PDT by neverdem

All bets are off for the future of energy in the United States and, indeed, the world, as the price of natural gas plummets to ever-lower values -- thanks to the development of technology that can access gas and liquids trapped in hitherto inaccessible shale rocks. In 2011, shale gas accounted for a quarter of U.S. natural gas production. But this seemingly bright future may depend on a court decision (expected in June 2012) and, of course, on the outcome of the November elections.

The Economics of Natural Gas

Consider the history of natural gas prices just in the last few years. In mid-2008, the spot price (at Henry Hub) reached a peak of $13 per mcf (1,000 cubic feet, with a heat value of 1 million Btu -- denoted as 1 MMBTU) -- having doubled since mid-2007. Since then, the price has decreased sharply, dipping to $2 in mid-March, and it now stands at $2.30. If prices decline further, natural gas will be cheaper than the average steam coal, which up until now has been the lowest-cost fuel on a heat basis.

How realistic is such a price path? Operators drilling for gas are also extracting large quantities of natural gas liquids (NGL) as well as crude oil. As pointed out by Richard Trzupek, the profit potential lies in these liquids, as natural gas becomes simply a byproduct. It reminds me of the situation in the early 1970s, 40 years ago, when "associated gas" was so cheap, only pennies per mcf, that it was flared at the well-head. The problem then was the lack of pipelines to convey the gas to consumers in major cities.

Electric Power Generation

With the pipeline problem solved (at least in the Lower 48), consider the consequences...

(Excerpt) Read more at americanthinker.com ...


TOPICS: Business/Economy; Crime/Corruption; Editorial; Politics/Elections
KEYWORDS: energy; naturalgas; shalegas

1 posted on 04/11/2012 1:29:09 AM PDT by neverdem
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To: neverdem
Atomic Insights Blog: Beware of the purveyors of the “cheap gas forever” myth

Both John Rowe, the retired chief executive at Exelon, and Aubrey McClendon, the current chief executive at Chesapeake Energy, would love to create a situation where “everyone” believed that cheap natural gas is going to last for a long time. My assertion is that “cheap” natural gas – which is actually only available in North America – is just a transitory condition caused by a perfect storm combination of factors that include a warm winter, a still struggling economy, drillers whose current cash flows are buttressed by oil revenues, and financially stressed landowners willing to to mortgage their future in return for some quick cash from frackers.

2 posted on 04/11/2012 2:22:50 AM PDT by mvpel (Michael Pelletier)
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To: neverdem
Related:

A Strategy to Stop EPA Science Abuse
http://www.americanthinker.com/printpage/?url=http://www.americanthinker.com/articles/../2012/04/a_strategy_to_stop_epa_science_abuse.html




3 posted on 04/11/2012 4:36:02 AM PDT by preacher (Communism has only killed 100 million people: Let's give it another chance!)
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To: neverdem

Out in the sticks we will never have access to natural gas. I would love to see these corrupt propane people put out of business. :(


4 posted on 04/11/2012 4:40:37 AM PDT by central_va ( I won't be reconstructed and I do not give a damn.)
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To: mvpel
This Rod Adams is a nuclear-fuel advocate who says the gas bubble will begin to burst around 2014 ...the price of natural gas in the United States will exceed $10 per million BTU for at least one month by the end of 2014.

(Since 2007 gas started selling at 2.30 per million BTU.)

But why will the gas bubble burst?

natural gas is a volatile commodity with a volatile price history that is partially based on its gaseous nature. Since it is a gas that is not terribly energy dense, it requires significant effort to store it or move it from place to place. That leads to some very strange pricing patterns. In places where there is more gas than the market can absorb can quickly approach the situation where suppliers are willing to nearly give the stuff away.

In the meantime, there are us ...financially stressed landowners willing to to mortgage their future in return for some quick cash from frackers.

Hold on, there, Mr. Adams!

Selling mineral rights to gas companies has recently proved to be handsomely profitable for local landowners. All forecasts, even including the most pessimistic like Adams, predict an even greater, almost tremendous, yield for the landowner.

"Mortgaging" our future for what?. A tremendous profit

5 posted on 04/11/2012 5:12:18 AM PDT by Rudder
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To: neverdem

This is also opening a new fault line in the Democrat Party.

Obama feels the need to kowtow to his Envirowhacko base.
Yet at the state and local level Democrats are having multiple orgasms over the new revenue streams, and, in fact, have already spent them.

Grab the popcorn.


6 posted on 04/11/2012 6:11:02 AM PDT by Buckeye McFrog
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To: Rudder
"Mortgaging" our future for what?. A tremendous profit

While it's true that fracking is well below the water table, there's not always an impermeable stratum between the shale and the water table, and the wells are being built by the same sort of people who used six centralizers instead of 21 on Deepwater Horizon.

Will the tremendous profit offset the costs of a damaged water table? Probably so, I suppose. You can buy a lot of filtration systems with that kind of money.

7 posted on 04/11/2012 6:35:50 AM PDT by mvpel (Michael Pelletier)
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To: neverdem

Have been working the oil industry for 40 years, and this is the biggest game changer I have ever seen in that time.

With abundant supplies of natural gas available to us, we have the potential to completely alter how we live by having a bountiful supply of energy that will raise our standard of living, ensure we cut ties with Middle Eastern Governments and provide cleaner emissions for many generations.

Using a method like Fisher-Tropsh (http://en.wikipedia.org/wiki/Fischer%E2%80%93Tropsch_process), we can even manufacture oil out of gas molecules to power our cars.

All we need is to rid ourselves of the enviro-wackos who dream of a utopia of wind, solar and biomass energy production. This utopia will not happen.

God gave us favor by giving us oil and gas which are more natural to this earth than any of this stupid “alternative” fuel.


8 posted on 04/11/2012 6:39:54 AM PDT by bestintxas (Somewhere in Kenya, a Village is missing its Idiot.)
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To: mvpel

Really? What depths are we talking here between the bottom of the wt and tracking?


9 posted on 04/11/2012 6:53:40 AM PDT by VeniVidiVici (The Democrat Ku Klux Klan is alive and well as the New Black Panthers, CBC and the NAACP)
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To: mvpel
I can buy water from another source...if need be.

My water table is very shallow, with gas wells and oil wells now beneath my water table. I have tons of water, springs, on my property---in fact I always say I have too much water. And, it's tested annually and always it's the same and good.

In fact I have been exploring selling my water and it all looks good.

Of course fracking may pose a risk like you say, but the depth of the fracking here makes it quite unlikely.

10 posted on 04/11/2012 6:56:13 AM PDT by Rudder
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To: neverdem

**Cheap Natural Gas Heralds an Energy Revolution***

Here is an interesting article on page 34 of the ARKANSAS LIVING April 2012

http://onlinedigitalpubs.com/publication/?i=105175
Go to page 34.

CAPITOL BUZZ by Carmie Henry

“A Question of Integrity”

It says that Chesapeake gas gave the SIERRA CLUB 25 MILLION DOLLARS to lobby against coal fired power plants.

Now that FRACKING is an evil thing they may have split, but SIERRA CLUB failed to give the money back.

ARKANSAS LIVING is a publication of the Arkansas Electrical co op.


11 posted on 04/11/2012 6:59:22 AM PDT by Ruy Dias de Bivar
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To: neverdem

For those who want to see a brief video of just how drilling and fracking is done:

http://www.northernoil.com/drilling


12 posted on 04/11/2012 7:09:13 AM PDT by Balding_Eagle (Liberals, at their core, are aggressive & dangerous to everyone around them,)
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To: neverdem
But wait, wait. Matt Damon is going to star in an anti-fracking movie and put an end to it.
13 posted on 04/11/2012 7:45:57 AM PDT by doug from upland (Just in case, it has been reserved: www.TheBitchIsBack2012.com)
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To: Balding_Eagle

Great video,I learned alot.


14 posted on 04/11/2012 7:45:57 AM PDT by painter (Rebuild The America We love!)
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To: mvpel
Check out the keyword abiogenichydrocarbon.

You'll find two articles that stand conventional thinking on its head, in particular the hypothetical notions of fossil fuels and peak oil.

15 posted on 04/11/2012 11:27:52 AM PDT by neverdem (Xin loi minh oi)
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To: central_va
"Out in the sticks we will never have access to natural gas. I would love to see these corrupt propane people put out of business. :(

Maybe not....my home town (rural area) "got access" to natural gas piped to individual homes...so your area may not be as bad off as you think. Even if not, propane itself comes from natural gas....so increasing the supply of natgas WILL drop the price of propane.

16 posted on 04/11/2012 11:59:06 AM PDT by Wonder Warthog
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To: Ruy Dias de Bivar; Balding_Eagle

Thanks for each of your links.


17 posted on 04/11/2012 12:27:19 PM PDT by neverdem (Xin loi minh oi)
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To: neverdem
Natural gas actually dropped below $2.00 today. Lowest in ten years.
18 posted on 04/11/2012 1:41:20 PM PDT by hinckley buzzard
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To: Rudder
As some of the initial comments here illustrate, the natural gas boom is going to hurt a lot of people invested in high prices or other fuels. Like stock "analysts" who go short on a company then publish financial porn telling everyone how terrible the company is and why they should avoid it or sell it, they will say anything to talk down the prospects of long term inexpensive energy.
19 posted on 04/11/2012 1:47:21 PM PDT by hinckley buzzard
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To: VeniVidiVici
What depths are we talking here between the bottom of the wt and tracking?

In the Eastern gas fields being developed with fracking, the Marcellus shale is around 3000 feet below the water table. The Utica shale is 3000 feet deeper than the Marcellus. There is no way for a minimal amount of water to migrate upward this far unless you are talking geological time.

20 posted on 04/11/2012 1:53:07 PM PDT by hinckley buzzard
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To: mvpel
"My assertion is that “cheap” natural gas – which is actually only available in North America – is just a transitory condition caused by a perfect storm combination of factors that include a warm winter, a still struggling economy, drillers whose current cash flows are buttressed by oil revenues, and financially stressed landowners willing to to mortgage their future in return for some quick cash from frackers."

Ridiculous. Right now, the new tech is most widely used in the US, but I am sure that there are similar shale deposits in Europe and elsewhere which will be found and exploited. As to the other factors, they undoubtedly ACCELERATED the price drop(s), but the main driver has been and will continue to be the discovery of "new" gas.

21 posted on 04/11/2012 3:20:21 PM PDT by Wonder Warthog
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To: neverdem
The EPA's proposed regulation sets allowed CO2 emission levels at 1,000 pounds/megawatt-hour, which would stop the building of new coal-fired power plants. In Virginia, Dominion Power is already building a 1,300-megawatt gas-fired plant. Of course, it is quite possible that the EPA will try to extend their regulation to include all coal-fired plants -- and then perhaps lower their arbitrary 1,000-lb limit to go after gas-fired plants -- part of an ill-advised campaign against all fossil fuels, based on pathological fears of imagined climate catastrophes.

That's the key here. The EPA's limits on so many issues are arbitrary and anti-science.

22 posted on 04/12/2012 4:05:35 AM PDT by 1010RD (First, Do No Harm)
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To: neverdem

Great Article!!!


23 posted on 04/12/2012 8:41:24 PM PDT by CPT Clay (Pick up your weapon and follow me.)
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To: bestintxas; thackney; Smokin' Joe; geologist; cpdiii

Ping


24 posted on 04/12/2012 8:44:18 PM PDT by CPT Clay (Pick up your weapon and follow me.)
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks neverdem.


25 posted on 04/12/2012 10:07:27 PM PDT by SunkenCiv (FReepathon 2Q time -- https://secure.freerepublic.com/donate/)
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