Energy crisis is postponed as new gas rescues the world

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cookstove's picture
cookstove
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Energy crisis is postponed as new gas rescues the world

Today, from Ambrose Evans-Pritchard:

America is not going to bleed its wealth importing fuel. Russia's grip on Europe's gas will weaken. Improvident Britain may avoid paralysing blackouts by mid-decade after all.

The World Gas Conference in Buenos Aires last week was one of those events that shatter assumptions. Advances in technology for extracting gas from shale and methane beds have quickened dramatically, altering the global balance of energy faster than almost anybody expected.

This article does not change the end of the story, but it reminds me that advances in extraction are still occurring.

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SagerXX
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...even if...

...this is so (it can be economically extracted, we can switch enough cars/houses/businesses to compressed gas, etc.), this doesn't address the many other issues we're facing.  

IMO, the E that's front and center for the next 12-18 months -- which will utterly overwhelm all others -- is the Economy.  If that's in a shambles, there's no money for a switchover to a gas-centric energy system.

Viva -- Sager

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Subprime JD
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Re: Energy crisis is postponed as new gas rescues the world

Lots of new data shows a huge increase in natural gas supplies. Have done some research about NATGAS vehicles, 170 miles per charge. Much cheaper then gasoline. Also, the average cost at the present time is 1.50 a gallon. 20% of US oil consumption goes to light vehicle travel.

Around 250 million vehicles in the US.

Restructuring 100 million vehicles at a price of $10,000 USD is $1 trillion. Whats a trillion dollars when the fed is printing a trillion every 2 qtrs? Including 785b stimulus and 700b bailout this can be done.

As oil prices spike and ebb the big shots will get the idea and begin the transition to NATGAS. There are only 1100 natural gas filling stations in the US, with 250,000 gasoline stations. There is plently of work to be done but NATGAS can surely smoothen the effects of peak oil.

Dr. Martenson needs to incorporate natural gas into his peak oil analysis if he wants a more holisitic approach to the energy situation. The crash course misses this extremely important piece of the energy puzzle.

Also, peak oilers range from extremely pessimistic to overly optimistic. I find myself in the middle of the spectrum. A big reason for that is the huge amounts of NATGAS that are in existence.

Sager: true the economy is a mess but peak oil is a much larger problem. Natgas can greatly mitigate its effects.

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SagerXX
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Re: Energy crisis is postponed as new gas rescues the world
bearmarkettrader wrote:

Sager: true the economy is a mess but peak oil is a much larger problem. Natgas can greatly mitigate its effects.

Like I said, the economy will dominate the next 12-18 months.  After that, depending on what all transpires, I'll re-evaluate which E I think'll dominate the landscape...Laughing

It could well be that natgas can help ease the Energy issue.  But clearly with hundreds of millions of conversions to be done, and tens of thousands of natgas refueling locations needing to be added, natgas won't help in the near term...  And I'm skeptical that TPTB are really working on solutions...  I'd be happy to be wrong...

Viva -- Sager

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Subprime JD
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Re: Energy crisis is postponed as new gas rescues the world

Why dont we open up a nat gas filling corporation and get a head start! We could dominate that industry and then join the ranks of TPTB and then have them exposed!!! Muhahahaha

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SagerXX
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Re: Energy crisis is postponed as new gas rescues the world
bearmarkettrader wrote:

Why dont we open up a nat gas filling corporation and get a head start! We could dominate that industry and then join the ranks of TPTB and then have them exposed!!! Muhahahaha

Sweet!  I got a couple empty grill tanks in my shed!  We'll start with those, and work our way up the food chain!

 

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plato1965
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Re: Energy crisis is postponed as new gas rescues the world

hallelujah! Best news I've heard in ages.. lets hope it gives us time to transition into a more sustainable existence without passing through a mad max / dieoff phase.  

 

 And indeed there will be time,

  for the yellow smoke that slides along the street,

  rubbing its back upon the window-panes;

 There will be time, there will be time...

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Damnthematrix
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yeah right...

http://odac-info.us1.list-manage.com/track/click?u=6df48681097fc33bb287f7dd8&id=\
b917d2137c&e=b47cb6e805

Energy crisis is postponed as new gas rescues the world
Ambrose Evans-Pritchard, Telegraph, 11 Oct 2009

America is not going to bleed its wealth importing fuel. Russia's grip on
Europe's gas will weaken. Improvident Britain may avoid paralysing blackouts by
mid-decade after all.

The World Gas Conference in Buenos Aires last week was one of those events that
shatter assumptions. Advances in technology for extracting gas from shale and
methane beds have quickened dramatically, altering the global balance of energy
faster than almost anybody expected...

Guest Commentary: Julian Darley - ODAC Trustee & author of 'High Noon for
Natural Gas'

It is hard to know where to begin regarding Ambrose Evans-Pritchard's article
entitled "Energy crisis is postponed as new gas rescues the world." But since
the speculative world he invokes has more to with Alice In Wonderland than the
hard reality of engineering and science, let us begin - at the end.

Evans-Pritchard caps his evangelistic encomium with this: "I am not qualified to
judge where gas excitement crosses into hyperbole. I pass on the story because
the claims of BP and Statoil are so extraordinary that we may need to rewrite
the geo-strategy textbooks for the next half century."

He admits his lack of gas qualifications but surely he is enough of a journalist
- and an economist - to ask some basic fact-checking questions. If he had, he
would have discovered that people like Aubrey McClendon, CEO of Chesapeake
Energy, have been brazenly hyping shale gas - even employing well known gas
expert Tommy Lee Jones to promote the stuff - in the hope of making a fortune.
Given that Mr McClendon is reputed to have lost around $2bn in the recent
financial debacle, his keenness is perhaps understandable (though he still
managed to earn more than $100m last year).

As for BP saying anything earth shattering, according to geologist David Hughes,
"(Chief Executive) Hayward said nothing that wasn't in the latest BP report,
which wasn't much different from previous BP reports (ie. 60 year
Reserves/Production where it has been in past BP reports)."

What none of the boosters want to talk about is the reality of shale gas. It is
true that there is most likely a lot of shale gas around, especially in the
United States, but after this, the story goes down a rabbit hole. Shale gas is
not like the conventional gas finds that gave the US vast supplies of cheap
methane. Shale gas is locked in until the rocks holding it are fractured in a
process known as hydro-fracing. This requires a lot of work, a lot of wells, a
lot of water (2 - 5 million gallons per well), and some rather unpleasant
chemicals. Having made all this effort, the production decline rates look like
the cliffs at Beachy Head. Within two years production has typcally dropped by
80%.

Not surprisingly therefore, these expensive wells have an average commercial
life of less than eight years. Worse still, in August of this year, World Oil
pointed out that total production of many wells was only a third of what
operators had predicted. Furthermore, of the two dozen or so shale plays in the
US, Barnett appears to have the best geological profile and is responsible for
80% of current shale gas. Many of the other plays have much lower gas content
density, which would likely mean yet more wells and more fracing for less gas.

But you ask, unlike Evans-Pritchard, if these wells are expensive, what happens
if either the price of gas falls or drilling declines precipitously (the former
of course being a likely trigger for the latter)? Very good question, because US
natural gas has now sunk to roughly half the price of the median break-even
price of shale gas. In a nice moment of symmetry, gas drilling has also fallen
by half. Of course, drilling can and will increase, but only when the economics
justify it. For the moment, it looks like US gas production may decline by up to
14% this year (according to Bernstein Research), which would actually leave the
US supply a few percent short, though it will be easy to fill gap with gas in
storage or imports.

There are least two key missing points which make the article so misleading. The
first is that shale gas flow rates are always much lower than conventional gas,
which in practical terms makes it an expensive and unlikely replacement either
for conventional gas or for oil. The second and far more profound omission is
that the geology of gas shale varies widely across both America and the world,
so that to extrapolate from the best - Texas Barnett shale - to the world is
like saying we should be able to grow bananas in Norway just because they grow
in India.

Natural gas is a very useful energy source and it emits less carbon than any
other fossil fuel. If large, new, easy-flowing sources of it were found, it
could relieve some short-term energy worries and reduce geopolitical tensions.
However, shale gas, though possibly a useful crutch, is not going to rescue the
world, for the reasons outlined above. Alice was finally woken from her
dreamworld and brought back to reality by a hot cup of tea. That may not be
enough to get us to face the disappointing reality of shale gas.

[My thanks to Dave Hughes for his recent presentation: 'Natural Gas in North
America: A Panacea to Replace Imported Oil?']

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