beegdawg007

Is There Enough Natural Gas?

Fitz, there is little question that the US has enough NG to swap out a lot of vehicles to NG from gasoline. Remember however, in regards to CO2, which seems to be one of your concernes, NG is not a free ride. The CO2 in a million BTUs of NG is 35% less than petroleum and 45% less than coal, but it is not free of CO2.

As for EIA estimates of NG, I am certain that the estimate is way below the actual amount simply because we have had no reason to really look for more Ng. Also, Canada has a lot of NG and very few people.

Price wise, compared to gasoline, NG is a heck of a deal. Considiring that 1 m BTUs of energy from NG typically costs (delivered) $7 to $15, and that It takes 7 gallons of gasoline to produce 1M BTUS.

However, as for replacing coal in power plants, that would be enormously expensive. 1 m BTUs from coal cost less than $2.00, while that same energy from NG would cost $7 to $15. If the goal is to reduce overall CO2, the smartest thing to do IMHO would be to focus on replacing as much petroleum with NG as possible first because that would both reduce CO2 and move us toward energy independance. I personally do not think that man made CO2, now at only 1 part per 10,000 parts of atmosphere, is or can ever be a problem. But, if you are concerned primarily about CO2, I say convert transportation first and second, use NG in power plants to supplement coal burning. Many power plants already have the abiltity to switch between the two. If we strive for an electric infrastructure system which uses both fuels in every power plant, the competition between those fuels would serve to hold a lid on the price of both.

Also realize that niether China nor India have significant supplies of NG to rely on NG to provide electricity and heat. Niether of those countries are going to stop using coal. Since 90% of all ""future CO2 from coal"" over the next 20 years (EIA numbers) will come from developing countries, eliminating America's use of coal will accomplish little in the way of world wide CO2 reduction. Do some more research into CO2, and I think you'll find that the issue is but a red herring. Water vapor is the greenhouse gas which is responsible for 95% of the greenhouse effect. The steam being emitted from power plants will do more damage than will the CO2. Total atmosperic CO2 is now only 4 parts in 10,000 and three of those were put there by mother nature. www.petitionproject.org/

Chesapeake: A Top Energy Play

U.S. natural gas is not yet being exported, at least not in any significant amount, simply because there is a shortage of the special kind of ships needed to transport NG. However, when there are enough of those ships, U.S. NG prices might actually decline because there are many sources of NG in the world which are much cheaper than the NG being produced in the U.S. We are actually likely to become an importer of NG.

Chesapeake: A Top Energy Play

There are near term problems with natural gas. First realize that NG is used in the U.S. for two primary purposes. Heating homes and, as a fuel source for some cleaner power plants.

First heating homes... the problem here is the current very low rate of new home construction, now the lowest in a decade, means new customers for natural gas are signing up at a much lower level now then in the past few years. Growth for that portion of the market is stagnant right now. That may change in a few years, but for now, there is very little GROWTH comming from the residential side of that market.

Power generation... Here much is made of how dirty coal is vs. NG. That is true. However, in the U.S. a BTU from Coal costs 1/5th as much as does a BTU from NG. And, contrary to what some would have us believe, new coal powered electric plants are still being approved and built in the U.S. Second, in regards to power generation, NG has a new competitor. If a plant is going to be built and powered by NG (not coal), wind power is now cost competitive and cleaner. This is why Mr. Oil himself, T-Boon Pickens, is now building the largest U.S. wind powerer plant in West Texas. This is a 2 gigawatt monster which derives energy from 600 large wind turbines. This plant, when completed will supply electricity to 200,000 homes. And, this is but one of dozens of Wind Projects being constructed in the U.S. right now.

The other issue with NG is that supply is not at all in jeopardy. Inventories may be comming down, but all that needs to happen is for the spigget to be cranked up on the pipeline to resupply the storage. During the past few years, new NG wells were drilled at an enormously high rate, and this is still going on. AS a result, it is very unlikely that we will see a shortage of supply of NG in the near term. I am not predicting a crash in NG prices, but I see no reason to expect much of an upside either. To me, it appears as though the demand/supply curve is really in limbo for now. Now coal... that's a completely different story, but one to be told some other time. And then there is solar... the fastest growing industry in the world right now!!