I’ve decided to stop posting to the Energy Investment Strategies web site and to take the site down eventually.  There are two reasons.   One is that I need to concentrate my efforts on fighting my cancer.  The other is that I think to a large extent my original aims for this site have been accomplished.  The site was started to educate investors about “peak oil”, its implications for potential future energy shortages, related increases in the importance and value of energy-related equities, and ways investors can best participate .  …

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A study released on 7/30/08 by Amercan Clean Skies Foundation and Navigant Consulting states that U.S. unconventional natural gas deposits are sufficient to supply 118 years of U.S. demand at 2007 levels.  Newly developed fracking and horizontal drilling techniques have made it possible to recover enormous quantities of gas from tight sands, coalbed methane, and gas shale formations, reports the Oil & Gas Journal (8/4/08) On the demand side, some leaders are starting to advocate the use of NG in lieu of petroleum to power cars.  Two Congressmen, Rahm …

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Gore vs. Pickens vs. Congress vs. McCain

The U.S. Congress is pursuing such brilliant energy policy alternatives as:

1. Suing OPEC for anti-trust

2.  Stopping “speculation”

3. Subsidizing corn-based ethanol while taxing imports of foreign ethanol.

  4. Leasing more U.S. land for oil and gas drilling.

These ideas range from idiotic (1 and 2) to counter-productive (3) to moderately useful in the longer term (4). 

To be more specific on drilling, my view is that since there would be no additional oil flowing from drilling the OCS or ANWR for 7 - 12 years, and since …

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This Winter could bring a good deal of economic strain to the roughly 8 million homes heating with oil.  The cost of natural gas heat is less than half that of oil, so that should push a fair amount of conversion from oil to gas.  Last year, about half of all U.S. households, 54 million, heat with gas.  As the report below from the Wall Street Journal states, “I don’t see any way to make the numbers work for middle-income people,” he says, adding, “They’re already …

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  By Ayesha Daya   July 2 (Bloomberg) — Natural gas, trading at a 40 percent discount to crude, may rise to reach the record price of oil as demand for cleaner-burning fuels increases, according to energy ministers from Qatar, Algeria and Iran. U.K. natural gas sells for 71.35 pence a therm, or the equivalent of $85 a barrel based on its energy content, compared with $141 for Brent crude. British natural gas rose 38 percent this year, lagging behind the …

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The price of natural gas in the U.S. has about doubled in a bit less than a year despite the fact that U.S. production has actually increased about 5%  due in part to new horizontal drilling techniques being applied to recently developed vast “unconventional” gas fields in the U.S. and Canada like Haynesville.  So it might seem like the price of gas has gotten ahead of fundamentals.  But there are good reasons to be bullish about gas prices longer term. 

Natural gas is inherently cheap on two scores.  One is that …

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With the oil price spurting to vertigo-inducing levels ($134 today), attention is finally starting to focus.  That’s comforting (to the extent there is any comfort as we approach the Rapid Transition) since recognizing the problem is always the first step toward its solution.  As countries learn from each other’s strategies for changing over from petroleum to electricity, I suspect Japan will be among the leaders.  They are using conservation techniques and are home to companies like Nissan and Panasonic that are innovating advanced battery and automotive technology.   In …

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The report posted below describing the unfortunate scene in Bangladesh after  conversion of many vehicles from gasoline to natural gas is notable on a number of levels.  First, it’s a good example how demand for oil is being destroyed by high oil prices in poor countries.  No doubt similar changes are happening in many countries and to millions of people around the world as they adjust to use less oil.  The oil that was formerly used in Bangladesh is now being used in China or some other growing economy, probably …

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One of the things I love about the Financial Times (the “pink” paper) is that their articles are short and to the point and they do not bleed from one page to another.  Anyway, the following piece from today’s paper puts further flesh on the bones of my recent LNG post to the point that U.S. natural gas prices are under pressure from the higher prices extant in other countries because U.S. ports are being outbid for LNG shipments.  This piece highlights Asian demand factors.  It also describes changing …

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An in-depth report on the market for natural gas in today’s Wall Street Journal focuses on the competition between the U.S. and Europe for LNG.  The price of gas over there is around $20 per mmcf, nearly double that here.  So there is good reason to suspect that over time the two prices will come closer as either supplies loosen up there or prices rise here in order to attract more LNG.  Most of the fundamentals that I have notice recently suggest prices will more likely remain high in …

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There seems to be much less discussion and analysis of the supply and demand dynamics for natural gas than for crude oil and other liquids.  Here is a link to the web site of the Natural Gas Supply Association, an industry trade group, that is replete with data and information about supply and demand vectors. This web site maintains that unproven NG reserves in the U.S., according to several sources that are presented, are about 6 - 9 times the proven reserves.  If such reserves become …

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According to a report in The Oil and Gas Journal (2/18/08) an extremely cold winter has put severe pressure on Iranian natural gas supplies, which is impacting other parts of their economy.  The weather has increased residential and commercial NG use 18% so that it now consumes 90% of production. Strained NG supplies have hurt oil production which is (unbelievably) pressurized by injection of, you guessed it, natural gas. The affected oil fields produced 930 kb/d if oil last year.  Gas pressurization is down by 33% - 75%.  …

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2008 drilling activity to produce natural gas in Canada is expected by one estimate to continue the drop experienced in 2007.  Oil sands activity that uses natural gas is expected to continue to grow.  Thus the U.S. can expected a continued drop in imports of natural gas. read full post

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REUTERS NEWS SERVICE ALGIERS - An Algerian company is planning to build a power cable to Germany to export solar-generated electricity from the Sahara, a state-owned newspaper reported on Wednesday. Tewfik Hasni, chief executive of New Energy Algeria (NEAL), said the 3,000 km (1,875 mile) cable would be laid from the Algerian town of Adrar to the German city of Aachen under a project provisionally entitled "Clean Power From The Desert", El Moudhaid daily reported. …

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