Wednesday, May 26, 2010

Where is that Marcellus Shale blog we need?

Bloomberg with some in depth thoughts on all things Marcellus today.  Worth a read.

One side impact of Marcellus shale and the ever lower price of natural gas.... it's too cheap to build windmills.  Weren't we suppose to get all those green jobs for our steelworkers building the wind turbines?  I saw the ads, it must be true.

Kind of interesting that former President Bush has gone on the speaking circuit and one of his first major speeches is about wind power. Not quite sure what to make of that.

and I don't really see much notice of this here....  I pointed out BP was making Making marcellus related investments, so the British are coming...  but so are the Asian sovereign wealth funds... So the Spanish own Kennywood, the French own the cabs and now the Chinese are going to own our natural gas (well.. not yet, maybe someday).  What's next?  The Japanese are going to buy Westinghouse or something like that.  What then?

I still think that the most efficient economic development strategy for the region would be to fund the hiring of a Mandarin teacher for every school.  Would be a lot cheaper than a lot of other things we try.  Think of all the earned media we would get.


Anonymous BrianTH said...

This is not necessarily user-friendly, but this long thread at Peak Oil (I'm not a regular reader, but came across this looking for shale gas discussions) was a pretty interesting read (for the most part--the last couple pages aren't too useful):

One interesting point that comes up in that discussion is apparently that shale gas companies have been finding ways to reduce drilling costs. Also touched on there is the point that Marcellus gas contains liquid components that are useful in the chemical business. The liquid components have their own pricing and so provide a hedge against low natural gas (methane) prices.

Wednesday, May 26, 2010 8:22:00 AM  
Blogger C. Briem said...

Yeah.. what's kind of funny is you now hear pols going out of their way to point out that the western Marcellus is very 'wet' gas and thus more valuable. Everyone is a drilling expert these days.

no doubt.. it clearly is a profitable biz. and if it is a lower cost producer then it's possible very low costs would be good for them. At some low prices, high and moderate cost producers will get not produce leaving more market for the lowest cost producers.

Wednesday, May 26, 2010 8:28:00 AM  
Anonymous BrianTH said...

Just idle speculation (no drilling expert here), but I've found interesting the notion that a goodly portion of the local economic impact of Marcellus could actually come from energy- or chemical-intensive firms locating in the area.

It seems to me somewhat low gas prices, particularly to the extent they are shutting down higher-cost gas suppliers elsewhere, could actually increase that effect. For that matter, just lower heating costs in the area would seem to be a possible pro-economic-growth factor.

And then there is the whole issue of other end-users (e.g., transit authorities or other vehicle fleet operators) switching over to natural gas. The lower gas prices, presumably the more of that would happen.

Anyway, it is a complicated situation. I wouldn't dare to claim I know the ideal gas price from a Pittsburgh-centric perspective, but I do think we are likely at least somewhat hedged against lower prices.

Wednesday, May 26, 2010 9:43:00 AM  

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