Natural Gas and the Potential for Change

Must-read piece up at Technology Review on how expanded U.S. natural gas reserves change energy calculus. Some of that is direct, with there being far more natural gas potentially available than imagined even five years ago; some of it is indirect, with a possible natural gas supply expansion representing a sort of circuit breaker in the face of oscillating and/or climbing oil prices.

There are many challenges of course, not least of which is the absence of natural gas-powered cars on U.S. highways. A wholesale auto fleet transition to natural gas is not in our future, at least not a rapid one. Then again, even the threat of a partial transition is an important development in the tight world of oil supplies.

Lots more here.

[via Gregor]

Comments

[Roger Knights:]

If the gov't encouraged conversion of home heating to natural gas, and encouraged pipeline building, this would help more than trying to convert the auto fleet. Only trucks are bulky enough to hold a tank of compressed gas and to do so in a large space that won't be ruptured in a collision.

Oct 20 03:03 AM

[Peter D. Co...:]

not sure it matters under the current administration. from their viewpoint, natural gas is just more of the carbon based energy system that is the source of evil in our lifestyles. what we need are windmills and solar panels. pipeline construction requires a lot of government approvals, the powers that be are not interested in helping the situation here.


On Oct 20 03:03 AM Roger Knights wrote:

> If the gov't encouraged conversion of home heating to natural gas,
> and encouraged pipeline building, this would help more than trying
> to convert the auto fleet. Only trucks are bulky enough to hold a
> tank of compressed gas and to do so in a large space that won't be
> ruptured in a collision.

Oct 20 05:14 AM

[ivanfberry:]

The major block for natural gas powered vehicles is the ridiculous EPA licensing fees that prevent all but fleet OEM's from converting vehicles to Natural Gas. The technology for "duel fuel" (gasoline and natural gas) powered vehicles is relatively inexpensive and has been available for over 50 years. The EPA fees make it virtually impossible to have legal retrofits available on a large enough scale to make natural gas vehicles a viable alternative.

Oct 20 08:45 AM

[fran:]

the gov't does thru current tax incentives for individuals, plus local utilities add more. these primarily in areas supplied with nat gas. further incentives contained in HR offered by rep Boren et.al. are you aware? if not,search and read. then contact your USA reps for action. show your personal interest thru action!

you have not been reading or acting on the many SA articles on NG? for shame.


On Oct 20 03:03 AM Roger Knights wrote:

> If the gov't encouraged conversion of home heating to natural gas,
> and encouraged pipeline building, this would help more than trying
> to convert the auto fleet. Only trucks are bulky enough to hold a
> tank of compressed gas and to do so in a large space that won't be
> ruptured in a collision.

Oct 20 08:54 AM

[DLB40:]

I read recently that a federal $10,000 license is required for each vehicle model that a shop would like to convert to LNG. That would be $10,000 each for a Camry, Accord, Malibu, F150, and so on. The LNG non-believers should look at the percentage of LNG autos in use in other countries before deciding that they will blow up in an accident. I think some new Chevy and Ford pickups might be available soon with an LNG option. Probably for fleet use only, but it's a start. Also take a look at the charts on FSYS, CLNE, and WPRT. Pretty eye opening. I hope you're fully invested!

Oct 20 09:33 AM

[Ozarker:]

Compressed Natural Gas would make us energy independent, greatly reduce our "Carbon Footprint" and save big bucks all at the same time. Let's do it!

Oct 20 10:13 AM

[Mad Hedge F...:]

ias I received another scratchy, crackling cell phone call from my drilling buddy in the Texas natural gas fields today. You could almost hear the dust on the line. The doubling of prices in the last month is totally bogus, and is nothing more than a short covering rally ahead of the seasonally strong run up to winter. Storage facilities are completely full, and while the production cutbacks have been substantial, they are still not enough. Some companies, like Chesapeake (CHK), are even suicidally boosting production in a desperate attempt to offset falling prices with jacked up volumes, at everyone else’s expense. This is all setting up a fabulous short selling opportunity, possible in early December, once the winter draws are priced in. There is still a huge risk that production will overwhelm storage as more new unconventional shale and tight gas deposits are brought on line, leading to another collapse in prices. A retest of the September lows is a gimme, and the $1 handle is still a possibility. So those of you who were nimble enough to bite a hunk out of the recent pop in CH4, better use any strength to cash in positions. I’d love to get more out of my friend, but I don’t think my aged, arthritic back could take another three hours driving down washboard roads in a beat up pickup truck with no springs.

Oct 20 11:10 AM

[NYCDart25:]

I am no huge commodity or NG bull, but a weird thing happens to ALL companies that produce ANY product, commodity or not...when the cost or producing that item falls below the price they get for it....they stop producing that product. Do you really think that these companies wont slam on the breaks if their marginal profit falls to zero?


On Oct 20 11:10 AM Mad Hedge Fund Trader wrote:

> ias I received another scratchy, crackling cell phone call from my
> drilling buddy in the Texas natural gas fields today. You could almost
> hear the dust on the line. The doubling of prices in the last month
> is totally bogus, and is nothing more than a short covering rally
> ahead of the seasonally strong run up to winter. Storage facilities
> are completely full, and while the production cutbacks have been
> substantial, they are still not enough. Some companies, like Chesapeake
> (seekingalpha.com/symbo...), are even suicidally boosting
> production in a desperate attempt to offset falling prices with jacked
> up volumes, at everyone else’s expense. This is all setting up a
> fabulous short selling opportunity, possible in early December, once
> the winter draws are priced in. There is still a huge risk that production
> will overwhelm storage as more new unconventional shale and tight
> gas deposits are brought on line, leading to another collapse in
> prices. A retest of the September lows is a gimme, and the $1 handle
> is still a possibility. So those of you who were nimble enough to
> bite a hunk out of the recent pop in CH4, better use any strength
> to cash in positions. I’d love to get more out of my friend, but
> I don’t think my aged, arthritic back could take another three hours
> driving down washboard roads in a beat up pickup truck with no springs.

Oct 21 06:05 PM