View topic - Study ties oil, gas output to US Midwest quakes

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PostPosted: August 1st, 2012, 10:02 am 
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Location: Boise, ID
Strap yourself in, it's going to be a bumpy ride.

http://articles.marketwatch.com/2012-07 ... er-outlook

Over last 3 months … NG up 70%. "Natural-gas futures rose to their second consecutive double-digit monthly gain Tuesday as the humming of air conditioners thinned supplies of the commodity, which feeds about a third of the nation’s electricity." Somewhere in one of those air conditioned cubicles, there's a trader in a hedge fund watching the weather channel and making a killing on natural gas futures and derivatives.


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PostPosted: August 3rd, 2012, 9:12 am 
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Practically speaking, price predictions aren't the most reliable sort of information... today's NG price at about $3.25 isn't expensive by historical standards. At sub-$2.00, drillers were being forced to stop operations because profits weren't possible. Drilling should resume at some higher price and that should keep prices down again... maybe.

See my post on Letterman's take on fracking in the chronic drought thread... that's good for a laugh, anyway... cheers!

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PostPosted: August 4th, 2012, 12:09 pm 
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In Indiana and Illinois … coal gasification plants are sprouting up in the billions of dollars to convert coal into SNG to be piped through existing pipelines. A $3 billion plant is being built near Rockport, Indiana, by a New York company, and a $1 billion plant in S. Illinois by Power Holdings of Illinois.

http://articles.chicagotribune.com/2011 ... atural-gas

As reported in Platts Utility Week ("Let's remember $13 natural gas," subscription only), it's a bet that current lows in tight and conventional gas represent "'some kind of insanity'" and over the long run coal gasification will be competitive with NG drilling. They are looking to negotiate a future contract price for SNG at $5.50 - $6.60/MMBtu, and remind investors NG was trading between $9 - $13 before the fracking boom in 2005 and 2006. Plants will also capture and sell CO2 (and developers are currently advocating for a CO2 pipeline).

"Rosenberg, a North Carolina-based energy consultant, is troubled that many US electric utilities are rushing to embrace gas as their primary fuel source, and retrofitting or shuttering numerous coal-fired generating units in the process. Rosenberg says that is a risky business strategy given the historically volatile nature of US gas prices, which he predicts could return to or even exceed their pre-fracking-era levels in the next few decades."

Because it is considered clean coal, Rockport Plant and proposed 441 mile CO2 pipeline has a $2.9 billion taxpayer loan pending with DOE (and environmental impact statements are currently being prepared).


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