Alan von Altendorf

Shale Gas: Promises, Promises, Promises

Mmarrkk - Arthur Berman posted a new, brief, conclusive answer to TPH and the shale operators petroleumtruthreport.b...


On Oct 27 10:56 AM Mmarrkk wrote:

> Tudor Pickering Holt gave a point by point assessment of Berman's
> evaluation. They, in short, said Berman is Flat Out Wrong and way
> out of his league. We shall see.

The Truth About Fossil Fuels and Renewable Energy (Part II)

I didn't want to take any notice of jerrydd, however enough is enough. There aren't going to be any solar-powered aircraft or biomass-powered missile cruisers. Nor are we going to scrap the commercial transport fleet to retrofit Peterbilts and diesel locomotives to burn natgas and crawl over the Rockies at 5 mph, carrying half as much freight.

Use 'renewable' if you want. But don't pretend you're self-sufficient. It can't exist or function without oil power for mining, manufacturing, transport, public safety and national defense. It's absurd to claim that government subsidizes oil. You have it exactly backward. Oil producers pay royalties and taxes to the Feds, the producing states and localities, plus the paychecks and benefits of millions directly and indirectly employed.

On Aug 09 01:48 PM jerrydd wrote:
> You all can bellow all you want but RE will kick fossil fuels butt
> because fossil fuels just plain cost too much

The Truth About Fossil Fuels and Renewable Energy

The notion that 'waste is unethical' is absurd. Peterson invites govt to abolish civil liberty.

On Aug 07 07:44 AM John Petersen wrote:
> Alternative energy technologies that reduce waste and increase efficiency
> are ethically good. Alternative energy technologies that reduce waste
> of one resource but increase waste of another by a like amount are
> ethically neutral.

The Truth About Fossil Fuels and Renewable Energy

Whether we like it or not, America's energy future is 50% coal.

Surprising Upturn for the Energy Sector

I expect oil and natgas to move lower again. The pop was spillover from the financials. This whole market is starting to feel like a dollar devaluation hedge, which pushes up nominal USD prices.

Natural Gas Is Heading to 1997 Levels, Should Stay There Awhile

"One well, ten TCF"

Think. Use your noodle.

Is There Enough Natural Gas?

Michael, sorry I've been so grumpy. You asked me to cite reserves data. EIA, World Oil, and Oil & Gas Journal estimate 500 tcf in the Americas (North + Central + South) and about 6000 tcf world total.

Engineers can't pick drilling locations.

Is There Enough Natural Gas?

"where will the engineers come from to design drill rigs, design drilling schemes etc"

Interesting disconnect, treating the problem as an engineering job of putting together nuts and bolts. The other laughable disconnect is to rely on USGS, academics, or sell side hoopla. Their "proved and possible" reserves are probablistic, which means a resource exactly as good as those AAA subprime MBS that ended up in a bucket that no one wants to mark-to-market.

The financial question is pertinent. Gas is in surplus, gas drillers are up to their ears in debt. But the greatest challenge is where to find exploration geologists and geophysicists when the old guys retire or lose interest? There's no shortage of engineers. A typical project team consists of one seismic interpreter and 20 engineers, who ignore whatever the "deterministic" methodology concludes. Reservoir engineers can't deal with anything except polygons and probabilities.

I'm sure you remember the salad days, a whole decade of throwing money around? McMansions for the masses. New car every year if you felt like it and a home equity ATM to remodel the kitchen. PBR announced 30 billion boe of new light sweet crude and associated gas reserves. The USGS Bakken blue sky was 100 billion more.

The party is over. How much new production? At what cost? And what kind of "science" were these nuts-and-bolts engineers doing, for who, and why? If an independent valuation uses client data and client Monte Carlo assumptions, what good is it?

The energy IPO and private placement bull had Merrill's fingerprints all over it. Guess who's bulling commodities again? -- BankofMerrill.

Is There Enough Natural Gas?

USGS estimate of gas reserves “the range of 100,000 to 300,000,000 TCF” reminds me of USGS off the wall estimate of Bakken oil reserves. There ought to be a law against using Petrel polygons and Monte Carlo software.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

Sorry about the double post. And there's a typo: MMS, not MMR.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

@ frflyer, guarding the Persian Gulf, Indian Ocean, China Sea, etc serves Kuwait, Saudi Arabia, the Emirates, Germany, Japan, South Korea. It's a global geopolitical thing. I don't like it any more than you do. But it's not a subsidy, unless you want to debit Exxon a slice of the Strategic Air Command nuclear deterrent, Navy hunter-killer subs and a chunk of NASA for deploying geoimaging and communication satellites. Oops, I forgot USGS and MMR.

Sigh. Okay, let's agree it $39 billion. That's 2% of $2 trillion revenue and an incentive to explore marginal prospects. Between 1981 and 2006, U.S. Federal and state governments collected $1.65 trillion in total taxes after adjusting for inflation. That is 65 percent more than the combined earnings of the 16 largest domestic oil companies during the same period. These figures do not include income taxes paid to foreign governments on profits earned in those countries. EIA data indicates that domestic oil companies paid $518.9 billion in income taxes to foreign governments between 1981 and 2006.

Oil company 2008 earnings (net income/sales) averaged 5.7%. ROI underperformed S&P Industrials every year since 1986. If you tax oil or change the rules about writing off G&G and completion, the only thing you'll achieve is higher retail prices. The combined burden of federal, state and local gas taxes cost American drivers an average of 45.9 cents on every gallon purchased in 2006.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

@ frflyer, guarding the Persian Gulf, Indian Ocean, China Sea, etc serves Kuwait, Saudi Arabia, the Emirates, Germany, Japan, South Korea. It's a global geopolitical thing. I don't like it any more than you do. But it's not a subsidy, unless you want to debit Exxon a slice of the Strategic Air Command nuclear deterrent, Navy hunter-killer subs and a chunk of NASA for deploying geoimaging and communication satellites. Oops, I forgot USGS and MMR.

Sigh. Okay, let's agree it $39 billion. That's 2% of $2 trillion revenue and an incentive to explore marginal prospects. Between 1981 and 2006, U.S. Federal and state governments collected $1.65 trillion in total taxes after adjusting for inflation. That is 65 percent more than the combined earnings of the 16 largest domestic oil companies during the same period. These figures do not include income taxes paid to foreign governments on profits earned in those countries. EIA data indicates that domestic oil companies paid $518.9 billion in income taxes to foreign governments between 1981 and 2006.

Oil company 2008 earnings (net income/sales) averaged 5.7%. ROI underperformed S&P Industrials every year since 1986. If you tax oil or change the rules about writing off G&G and completion, the only thing you'll achieve is higher retail prices. The combined burden of federal, state and local gas taxes cost American drivers an average of 45.9 cents on every gallon purchased in 2006.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

Airplane, not airplanes (plural), and it flew on "standby" kerosene while pretending to demonstrate LNG that never worked. Low speed lifters in the Port of LA will operate in a small, flat, price-no-object setting. You could probably run them on used vegetable oil gathered from McDonalds (which btw is another local government wheeze, in New York, making the stinkiest biodiesel on earth at twice the price).

Michael, I don't fault you for pushing natgas as a transportation fuel. There's a large installed infrastructure of retail CNG in Holland and Belgium. I drove a gas-powered VW Golf. Worked fine on flat roads and short distances. I can see building out a similar retail network in Texas, Louisiana, parts of Indiana and Illinois. I think you might be successful in pushing policy (tax breaks) with Boone Pickens and the gas producers and pipeline companies on your side. The Battelle Memorial Institute is a resource. They're DOE experts on gas storage subsurface.

Conoco? Can't comment because of confidentiality.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

"Oil gets $39 billion a year"

Please identify what the heck you're talking about?

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

Michael, I don't know what you mean about "subsidies for oil." It's the most heavily taxed and regulated industry in the world, from wellhead to retail gas pump.

CNG is okay for light passenger cars (assuming all the tax breaks and subsidies you indicated for infrastructure), but it can't power aircraft or heavy equipment.

Commercial oil companies, large and small, are plain old fashioned industrial enterprises. They are being shut out and squeezed by governments. Remaining potential exists in abundance, but no one wants to lose billions (again) in Russia.

The one and only cure for peak oil is to get government out of the way, let the market allocate investment. Obviously, that's not going to happen, so you're probably right -- the illogical solution will win.