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Boone Pickens' enthusiasm notwithstanding, U.S. natural gas prices don't appear to be headed...

Boone Pickens' enthusiasm notwithstanding, U.S. natural gas prices don't appear to be headed higher any time soon, as pipelines coming into service by year end are poised to extend the current supply glut. Deliveries from the Marcellus shale could grow by 30%, as ~1,000 area shale wells that now sit uncompleted because of a lack of pipeline infrastructure gradually come online.
Comments (17)
  • Mike Maher
    , contributor
    Comments (2479) | Send Message
     
    Dont forget new nat gas infrastructure in the Bakken to stop all the flaring of gas.
    26 Sep 2012, 06:08 PM Reply Like
  • ascrowe
    , contributor
    Comments (51) | Send Message
     
    Prices "don't appear to be heading lower"?...seems more supply would have them heading lower or at least have you say "don't appear to be heading higher"...

     

    Samuel
    26 Sep 2012, 06:19 PM Reply Like
  • User 502794
    , contributor
    Comments (122) | Send Message
     
    agree, the gist of the story implies lower prices...i think the editor made a mistake
    26 Sep 2012, 07:03 PM Reply Like
  • Tom Guttenberger
    , contributor
    Comments (717) | Send Message
     
    Confusing thread indeed. All the more reason to fade this recommendation and get long energy!
    27 Sep 2012, 07:55 AM Reply Like
  • ryanbellinger
    , contributor
    Comment (1) | Send Message
     
    why would this prevent prices from going lower? more supply is bearish.
    26 Sep 2012, 07:20 PM Reply Like
  • Christopher Wallace
    , contributor
    Comments (1020) | Send Message
     
    Agreed, I think the editor mistakenly said lower instead of higher. A bigger mistake was to fail to mention the context for those 1,000 new wells. There were 487,000 natural gas (incl liquids) wells active as of the end of 2010 (latest EIA #). So adding 1,000 wells adds about 0.2% to the #. That bit of context changes things, doesn't it?
    26 Sep 2012, 07:22 PM Reply Like
  • Bruce Baxter
    , contributor
    Comments (19) | Send Message
     
    We may soon be running our vehicles on CNG.
    26 Sep 2012, 08:41 PM Reply Like
  • KimFeil
    , contributor
    Comments (79) | Send Message
     
    Exxon not too confident on CNG vehicles.
    http://exxonmobil.co/S...
    26 Sep 2012, 09:49 PM Reply Like
  • kmi
    , contributor
    Comments (3975) | Send Message
     
    Wow, exxon, is exaggerating stuff a bit there. Retrofit kits for NG aren't that expensive and very popular in S. America, and increasingly popular in Europe. Exxon claims a 25% increase in cost? Seems excessive when a conversion costs about $1,500.

     

    Jeez I could trash that entire linked article, I wonder what the point of it was.
    27 Sep 2012, 09:54 AM Reply Like
  • TGCFG
    , contributor
    Comments (49) | Send Message
     
    I don't know about all that and maybe in the long term your right, but in the short term nat gas is headed higher, but maybe only for 4-6 weeks. As they say in Game of Thrones "Winter is coming" .
    26 Sep 2012, 08:47 PM Reply Like
  • Paul_L
    , contributor
    Comments (302) | Send Message
     
    The news appeared in Bloomberg. In addition to Marcellus, many othe pipes are in completion process. "Natural gas pipelines coming into service by year end may boost deliveries from the Marcellus shale deposit in the U.S. Northeast by 30 percent, extending a supply glut that helped send prices to decade lows.
    As much as 2 billion cubic feet of gas a day are set to flow from the lines in Pennsylvania, Ohio and West Virginia, bound for markets along the Eastern Seaboard, based on government and pipeline-company projections. About 1,000 Marcellus shale wells sit uncompleted, mainly because of a lack of pipeline infrastructure, according to the Energy Department."
    26 Sep 2012, 09:28 PM Reply Like
  • Christopher Wallace
    , contributor
    Comments (1020) | Send Message
     
    I read that same article. But 2 bcf/day divided by 1,000 wells implies IP rates of 2 million bcf/day per well. Doesn't that sound awfully high?
    26 Sep 2012, 09:32 PM Reply Like
  • ronwagn
    , contributor
    Comments (924) | Send Message
     
    http://bit.ly/RWFUWj 1700 links. Natural gas is the future of energy. It is replacing dirty, dangerous, expensive coal and nuclear plants. It is producing the electricity for electric cars. It will directly fuel cars,pickup trucks, vans, buses, long haul trucks, dump trucks, locomotives, aircraft, ships etc. It will keep us out of more useless wars, where we shed our blood and money.
    26 Sep 2012, 09:51 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2479) | Send Message
     
    Companies just started breaking ground on new nuclear plants in the US. Low natural gas makes them less profitable, but its not going to kill the industry the way its killing the coal fired plants.
    26 Sep 2012, 10:26 PM Reply Like
  • seekadbr
    , contributor
    Comment (1) | Send Message
     
    I think the author is short natural gas and wants to talk it down. Let's see - who would I believe - T. Boone Pickens or this guy?
    26 Sep 2012, 10:05 PM Reply Like
  • Vince Martin
    , contributor
    Comments (619) | Send Message
     
    I would think your first instinct would be to trust the person who is less financially invested in the bull case...ie, anybody but Boone. (And I'm an OSU fan!)
    26 Sep 2012, 11:11 PM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    The author of this thread failed to note the important fact that all existing Marcellus wells, including and especially those just started production yesterday, are all in rapid and continuous decline.

     

    So the bulk of new wells put into production merely counters the overall production decline. Only a fraction of new wells contributed to increasing the overall Marcellus production rate.

     

    Let's look at some numbers. Based on EIA data, the production rate of the entire Pennsylvania portion of Marcellus was 5.885 BCF/day in August, up slightly from 5.808 BCF/day in July, or up only 0.077 BCF/day in a month. That is up only 2.484 MMCF/day. During the time, producers are adding an average of 4.5 wells per day, each well has an average of 5 MMCF/day initial production rate. So they are adding 22.5 MMCF/day production rate per day. Only a fraction of the 22.5 MMCF/day, a mere 11%, resulted in the overall production increase. The remaining 89% of new capacity is merely used to counter the decline of existing wells. Or roughly 4 new wells per day is needed to keep production flat.

     

    So the 1000 pending new wells, as they discussed, will NOT contribute to increased overall production, if these new wells are bought online at a pace of slower than 4 wells per day.
    27 Sep 2012, 07:21 PM Reply Like
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