Tuesday, July 13, 2010

More Marcellus

A theme this week. We'll shove off this rock (pun intended I suppose) soon enough.  Too much other stuff going on.

But big Marcellus news just out from the WSJ: Natural-Gas Driller to Disclose Chemical Use.  Which honestly surprises me since I thought they had to disclose all that anyway.

Via The Street and from the folks who gave you Nabisco: Shale Gas the Flavor of the Season

Down in WV local governments are not benefiting as much as they planned on from all this new drilling activity. See: Low prices offset oil and gas boom.  Not a knock on the industry actually.  Maybe local governments were a bit optimistic in their projections?  Anyone else being similarly optimistic in their projections?

Something more academic. A paper recently out: Do Americans Consume Too Little Natural Gas? An Empirical Test of Marginal Cost Pricing. by Lucas W. Davis Erich Muehlegger.  From a few weeks ago, but more and more talk of a recent omnibus MIT report: The Future of Natural Gas: An Interdisciplinary MIT Study

From Wall Street (sort of).  Everyone knows Cramer is kind of a nut.  But a nut to listen to sometimes.  I myself keep wondering why nobody really talks about what the implications are if indeed Marcellus production is half as successful as the industry makes it sound.  A big supply increase has to push down prices .  Anyway, from Cramer: A NatGas Glut Is a Good Thing?  The answer depends who you are to a degree. It ends with the money quote and really underappreciated question that will shape the future:
"if natural gas didn't burn off its excess and spike in price off supply shortages in the last few weeks of heat, I don't know if it ever will again.”
To back that up, all energy prices jumped up today except natural gas which bucked the trend. If we could only get this stuff on a boat, there is a big natgas shortage in Argentina.

yes yes I know full well there are 'boats'.  One of the things you just stay away from at all costs are LNG carriers underway.


Anonymous BrianTH said...

As I have suggested before, I really hope the upcoming PA severance tax includes a pure volume-based component, precisely to hedge against the possibility of a low-price/high-volume scenario.

And speaking of which, before building the infrastructure to export natural gas, I would suggest we build the infrastructure to shift over more domestic energy usage to natural gas. And apparently there is some low-hanging fruit in terms of just getting consumers price=marginal cost.

Wednesday, July 14, 2010 12:36:00 AM  

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