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Dimensions of a Possible Natural Gas Glut
An excellent analysis of U.S. natural gas supply prospects and recent history has been posted at The Oil Drum. It fleshes out a much discussed conclusion that new finds of unconventional gas combined with better extraction techniques could yield much higher NG production. In fact production has recently been increasing - by as much as 8% according to this article.
My sense is that there are two potentially large new sources of demand that could ultimately cause NG prices to rise again. One is transportation. A lot of new attention is focused on using NG in cars and certainly in fleets that operate locally. Also, there is potential for LNG exports of NG since the price in Europe and Asia is now about double the U.S. price.
Tags: peak oil energy investments
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6 responses so far ↓
1 paultaut // Sep 5, 2008 at 12:55 am
Granted the idea to export Nat. Gas is a possibility but I don’t see it getting much traction in a Nation focusing on Oil Independence. Besides, I haven’t noticed any shift in the price Of Cheniere Energy which would benefit from such a move.
Where does NG go when Oil hits the Mid 90’s, thats my next probability if IKE doesn’t wipe out the rigs in the Gulf.
2 Stuart Arthur // Sep 5, 2008 at 10:55 am
trying to use nat gas to fuel cars sounds like a nice idea- as others have suggested maybe the best initial idea would be for “fleet” cars- i.e. company owned to be adapted. But I bet I never see statewide or nationwide build out of the necessary infrastructure for nat gas service stations.
It would be the ultimate irony- at least to me- for the U.S. to export it’s temporary excess of nat gas as LNG
3 richard warren // Sep 8, 2008 at 5:29 am
I share the cautious view with regard to transportation (that is, I think it will take 15-20 years to get the NG fueling infructure in place, followed by the required large numbers of Joe driver buying NG fueled cars). Seems to me the best bet to increase NG demand in the next few years is increased utility/industrial use of NG. I also am more positive regarding NG exports to Europe (which will soon be VERY nervous about Russian-controlled supplies).
4 paultaut // Sep 8, 2008 at 10:57 pm
Check out SNEN for a Chinese CNG play.
5 russell // Sep 9, 2008 at 8:43 pm
ng fueled autos are agreat idea;however until the price and availability of equipment
are readily available at a reasonable cost, it just is not going to happen.
6 H.D.Franke Dr. // May 6, 2009 at 5:11 am
Here in Europe ( North) nat gas fuelled cars are quite common.
They come as hybrids i.e. the engine can be switched on the fly to run off gasoline and off nat gas. The gas stations providing nat gas are plenty at present only around cities with more than 100,000 inhabitants. Nat gas for cars has a far lower tax per BTU than gasoline so the slightly higher price of a nat gas gasoline hybrid pays off in about one year.
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