Natural gas Prices to remain low

The article posted by Dan (via newsletter) raises several issues - but also leaves a few wandering in the mist. What I thought most interesting though was the covert suggestion that nat gas producers need some sort of economic hand out to remain viable. In a similar article just this week in the Edmonton Journal the same topic was probed - and yes it mentioned the same factors; and added a few other wrinkles. It is agreed that there is a oversupply here in NA, partially due to aggressive drilling and exploration - bringing much more gas to the well head; but also partially due to the fact that consumer gas (that's you and me) consumption has fallen off over the summer. The oversupply is further aggravated by NA storage facilities are at full capacity or near full capacity - which means less gas is flowing into the purchase gas pipelines. LNG was also mentioned as a contributing factor to the low prices and while it is hoped that it will be the long term saviour of consumers - our capacity to process LNG from overseas is still dismally low - existing plants are few and it takes 10 - 15 years to bring a large scale plant on stream. It is my thought that LNG is a minor player - causing just a small ripple in the bigger pond. So yes - prices will remain around the $6/1000 cf, which is the magic "break even" price of production - or so they say. More importantly is the grand job coal producers and coal consumers have done in their efforts to be portrayed as a "Clean" fossil fuel. "Clean coal" is an oxymoron of the highest sort. Take for instance the discussion around our Oil Sands projects - which have been identified as "Dirty". Put aside all other arguements for a moment and consider this: the carbon foot print of the oil sands is only about 5 - 10% of the total carbon footprint of all other industries here in Alberta. The remainder? Coal fired power generation. Heck we put the power plants on top of the coal seams so that transportation is minimal. It is cheap power - it is not cheap clean power; on either side of the border. The clean coal highly regarded only a varies a few % points of sulpher content to its cousins in the south or east. Coal though does have its attractive side: if we are truly serious about reducing our carbon foot print - worldwide - then coal can be easily identified as the greatest source of air borne carbon derivitives hence the greatest opportunity to clean up our world.