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 …

[Read more →]

The reality that’s been revealed by Russia’s Georgia adventure is captured in the following statement by Prof. Steven Blank at Penn. State: ““Russia’s energy objective is to monopolize all Caspian energy flows to Europe, so that it can then blackmail Europe and force political changes to European policy,” Prof. Blank said.

That is the new national security challenge presented by Russia that I discussed recently.  It’s historical and strategic dimensions are set forth in a excellent piece of journalism published today in the Globe and Mail and …

[Read more →]

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 …

[Read more →]

Somebody gets it at The Washington Post.  Gal Luft makes perfect sense in this piece about how four other countries are becoming energy independent while the U.S. just plays silly games.  He left out the fifth country doing it, Denmark, which is going down a similar road to Israel’s except using wind instead of solar to generate the electricity.  ENERGIZED Iran and Brazil Can Do It. So Can We . Sunday, July 6, 2008; Page B01 When the founding fathers declared our independence, they could not have imagined …

[Read more →]

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 …

[Read more →]

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 …

[Read more →]