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How long will natural gas be cheaper than oil?

Jean-David BeyerJean-David Beyer Posts: 2,649Member
I am not an expert tea leaf reader, but here is an interesting tea leaf:



<strong>The International Energy Agency (IEA) said on Monday June 6 that it

expects global gas demand to overtake coal before 2030, and come close

to oil around 2035, and that global gas demand to grow by an average of

2% a year, which will end the current gas glut by 2015, by when demand

would begin to outstrip supply.   </strong>

Comments

  • Tim McElwainTim McElwain Posts: 4,317Member
    I am getting ready to go out to dinner

    but would like to give a quick comment and then follow up later.



    As to availibilty there are areas capped off with no pipeline available to transport which could serve to last for the next 100 years at present rate of growth. There is gas in Russia (Siberia) which is supplying large parts of Europe so I am not sure where this international group gets their info.



    I personally having been involved with the gas industry for over 60 years do not think you are going to see any rapid rise in prices.



    Hydraulic Fracking if the environmental issues get resolved will add plenty of gas to the present supply at still reasonable prices.



    I have never seen nor have I been involved in cases that the utilities sat in some back room conspiring to raise prices. Hey on most local levels they have to request rate increases from a governing body. They are making their money on volume sales not price. The real problem with oil is poor service to customers and lack of high efficiency appliances to sell.
  • SteamheadSteamhead Posts: 13,515Member
    There is also a movement

    to convert coal and oil-fired power plants to gas. Nuclear is not an option and probably won't be for decades, if ever (see Fukushima, Chernobyl, Three Mile Island, Fermi One, Windscale etc) unless someone comes up with equipment that is more forgiving of design and human errors. With higher demand, the price of the gas will certainly go up.



    Then there are the expanding economies in India and China. These will consume more and more energy, both gas and oil, as pressure from the rest of the world causes them to switch away from coal. The Lovely Naoko was in China recently and says they have much air pollution there. Not sure how much nuclear they have in these two countries.
    All Steamed Up, Inc.
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  • Charlie from wmassCharlie from wmass Posts: 4,099Member
    I often think about which fuel

    is easiest to manufacture if whats in the ground is gone. Anyone who has worked with garbage, sewage, or farm animals knows it is methane. Nature makes lots of it we just need to collect it. Look what is being done with hog farms, for centuries the Chinese have been using hog waste to produce methane to cook with in rural areas, Funny how what is old is new again.
    Cost is what you spend , value is what you get.

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  • Tim McElwainTim McElwain Posts: 4,317Member
    Here is some information

    To see the charts and tables mentioned go to www.naturalgas.org/overview/resources.asp



    How Much Natural Gas is There?



    There is an abundance of natural gas in North America, but it is a non-renewable resource, the formation of which takes thousands and possibly millions of years. Therefore, understanding the availability of our supply of natural gas is important as we increase our use of this fossil fuel.

    This section will provide a framework for understanding just how much natural gas there is in the ground available for our use, as well as links to the most recent statistics concerning the available supply of natural gas.



    As natural gas is essentially irreplaceable (at least with current technology), it is important to have an idea of how much natural gas is left in the ground for us to use. However, this becomes complicated by the fact that no one really knows exactly how much natural gas exists until it is extracted. Measuring natural gas in the ground is no easy job, and it involves a great deal of inference and estimation. With new technologies, these estimates are becoming more and more reliable; however, they are still subject to revision.

     

    A common misconception about natural gas is that we are running out, and quickly. However, this couldn't be further from the truth. Many people believe that price spikes, such as were seen in the 1970's, and in the early to mid-2000s, indicate that we are running out of natural gas. The two aforementioned periods of high prices were not caused by waning natural gas resources - rather, there were other forces at work in the marketplace. In fact, there is a vast amount of natural gas estimated to still be in the ground. In order to better understand exactly what these estimates mean and their importance, it is useful first to learn a bit of industry terminology for the different types of estimates.



    U.S. Natural Gas Resource Estimates



    Below are three estimates of natural gas reserves in the United States. The first, compiled by the Energy Information Administration (referred to as the EIA), estimates that there are 2,587 trillion cubic feet (Tcf) of technically recoverable natural gas in the United States. This includes undiscovered, unproved, and unconventional natural gas. To learn more about these classifications, click here. As can be seen from the table, proved reserves make up a very small proportion of the total recoverable natural gas resources in the U.S. The most recent EIA data on proved reserves in the U.S. can be found here.



    The following table includes an estimate of natural gas resources compiled by the National Petroleum Council in its 2007 report, Facing the Hard Truths about Energy.  In its 2007 report, the NPC estimated total traditional natural gas resources to total 1,451 Tcf, and forecasted that advances in technology over the upcoming 20 years could bring natural gas resources to 1,887 Tcf. The National Petroleum Council has undertaken an updated analysis of resources, the “NorthAmerican Resources Study,” which is scheduled to be released in March 2011. 



    It is important to note that different methodologies and systems of classification are used in the various estimates. There is no single way that every industry player uses to quantify estimates of natural gas. Therefore, it is important to delve into the assumptions and methodology behind each study to gain a complete understanding of the estimate itself.



    Below is an estimate completed by the Potential Gas Committee. This estimate places total U.S. natural gas resources at just over 1,836 Tcf.  The PGC’s estimate classifies natural gas resources into three categories: probable resources, possible resources, and speculative resources, which are added together to reach a total potential resource estimate.  And when combined with EIA’s latest estimate of proved natural gas reserves, the Potential Gas Committee’s report said total available future supply is 2,074 Tcf, equaling about 100 years of supply at current rates of consumption.  (Americans consume an average 22 Tcf/year.)



    There are a myriad of different industry participants that formulate their own estimates regarding natural gas supplies, such as production companies, independent geologists, the government and environmental groups, to name a few. While this leads to a wealth of information, it also leads to a number of difficulties. Each estimate is based on a different set of assumptions, completed with different tools, and even referred to with different language. It is thus difficult to get a definitive answer to the question of how much natural gas exists. In addition, since these are all essentially educated guesses as to the amount of natural gas in the earth, there are constant revisions being made. New technology, combined with increased knowledge of particular areas and reservoirs mean that these estimates are in a constant state of flux. Further complicating the scenario is the fact that there are no universally accepted definitions for the terms that are used differently by geologists, engineers, accountants, and others.

    Source: Energy Information Aministration

    Historical Proved Natural Gas Reserves

    The graph, using data recorded by EIA, shows the change in proved natural gas reserves in the United States from 1977 to 2008. As can be seen, the levels of proved reserves in the United States have changed significantly over the past 10 years. If the additions to proved reserves in a given year are larger than the subtractions from production, then proved reserves will increase, and vice versa. Usually, however, the additions are close enough to the subtractions to maintain a relatively constant level of proved reserves. For the most recent reserve statistics, including more in depth-analysis, click here to visit the EIA's website.



    Where Are These Reserves?

    Dry Natural Gas Proved Reserves by State- 2008Source: EIA

    Most of the natural gas that is found in North America is concentrated in relatively distinct geographical areas, or basins. Given this distribution of natural gas deposits, those states that are located on top of a major basin have the highest level of natural gas reserves. As can be seen from the map on the right, U.S. natural gas reserves historically have been concentrated around Texas and the Gulf of Mexico.  With the recent onset of shale production the number of states across the U.S with significant resources has increased, with major shale gas-producing states including New York, Pennsylvania, Arkansas and Oklahoma, as well as Texas and Louisiana.  For more information about the importance and size of shale gas, please visit the shale section.



    The map above gives a general impression of where most of the proved natural gas resources are in the United States.  Visit the EIA for more in-depth analysis into natural gas reserves across the country and to access geographical natural gas data.



    World Natural Gas Reserves



    The EIA, in conjunction with the Oil and Gas Journal and World Oil publications, estimates world proved natural gas reserves to be around 5,210.8 Tcf. As can be seen from the graph, most of these reserves are located in the Middle East with 1,836.2 Tcf, or 34 percent of the world total, and Europe and the Former U.S.S.R. with 2158.7, or 42 percent of total world reserves. The United States, by this calculation, possesses 3 percent of the world total natural gas reserves. Source: International Energy 2010 - EIA

    For more information on international natural gas reserves, visit the EIA’s international data international data section.

    Now that the methods of reserve estimation and the most recent data concerning North America and the World's supply of natural gas have been discussed, proceed to learn about the many uses of this vital gas.



  • Tim McElwainTim McElwain Posts: 4,317Member
    This will drive the price

    of Propane down:



    U.S. propane stockpile shows 8th weekly build, EIA reports

    The country's total propane inventory showed a consistent build for eight consecutive weeks, adding another 1.1 million barrels last week to settle at 35.7 million barrels of supply, according to the Energy Information Administration. The Midwest gave the largest contribution with 0.6 million barrels, followed by the Gulf Coast region with 0.3 million barrels. The East Coast and Rocky Mountain West both contributed 0.1 million barrels to the stockpile. [u][color=#0000ff]Read the EIA's statement[/color][/u]
  • Tim McElwainTim McElwain Posts: 4,317Member
    This may drive the price of

    Natural gas up!



    Exporting natural gas would address supply glut, pump up prices

    The U.S. should start exporting natural gas to address the supply glut that drags gas prices down, argues Christopher Helman. Also, if domestic production of natural gas is limited by banning or regulating the use of hydraulic fracturing, that could reduce the excess supplies and pump up domestic gas prices, he adds. [u][color=#0000ff]Forbes/Fuel blog[/color][/u] (6/21) Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.image
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  • JackJack Posts: 1,044Member
    I've been watching this post...

    and cynically thinking the answer is, until someone figures out how to game the system. Todays Sunday NY Times has the front page article on exactly this topic. Huge amounts of money rolling in and how production on the wells is playing out much sooner than expected. References to the new Enron and the next Bubble. Thoroughly discouraging given our inabiltiy to get onto renewables in a meaningful way. It's worth a read!
  • Terry OTerry O Posts: 67Member
    Ironic Jack...

    I was just reading the NYT article you referenced. Here is a link:

    http://www.msnbc.msn.com/id/43539470/ns/business-us_business/

    Interesting in deed.
    Terry O
  • Tim McElwainTim McElwain Posts: 4,317Member
    Concerning the article
    • Natural gas will fuel U.S. economic growth

      Forbes columnist Christopher Helman disputed a recent report by The New York Times that shale natural gas drilling is not as rewarding as gas companies make it appear, arguing that natural gas production and demand in the U.S. are at record highs. "[Natural gas] burns a lot cleaner than coal, and with nuclear off the table for now, gas is poised to fuel U.S. economic growth for more than a generation to come," Helman wrote. [u][color=#0000ff]Forbes/Fuel blog[/color][/u] (6/27) LinkedInFacebookTwitterEmail this Story
  • Tim McElwainTim McElwain Posts: 4,317Member
    Some more

    1. Rep. Markey wants EIA to reassess estimates of natural gas reserves

      In reaction to a New York Times article questioning projections on shale gas development, Rep. Edward Markey, D-Mass., asked the Energy Information Administration to review its assessment of the country's natural gas reserves. Natural gas drillers, however, "don't invest billions of dollars in nonprofitable ventures" and with the estimates coming from the government, there's no basis for "why EIA would have any incentive to not give their very best estimate based on the technical information that's available to them," according to a petroleum-industry group. [u][color=#0000ff]Bloomberg[/color][/u] (6/27) LinkedInFacebookTwitterEmail this Story
  • Tim McElwainTim McElwain Posts: 4,317Member
    And finally one more
    • McClendon defends productivity of shale gas wells

      Chesapeake Energy Chairman and CEO Aubrey McClendon disputed articles from The New York Times that claim energy companies are exaggerating production from shale natural gas wells. Early productivity numbers and expected ultimate recoveries of such wells have been "steadily improving" and "the majority of these wells will be productive for 30-50 years, or even longer," McClendon wrote in response. It is also "absurd to conclude that shale gas wells are underperforming while America is awash in natural gas and benefiting from natural gas prices less than half of what they averaged in 2008," he added. [u][color=#0000ff]Nasdaq.com/Dow Jones Newswires[/color][/u] (6/27), [u][color=#0000ff]Reuters[/color][/u] (6/27) LinkedInFacebookTwitterEmail this Story
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