The Oil Drum

28 comments on Timely delivery is a critical part of a useful fuel supply

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AlanfromBigEasy on January 19, 2006 - 8:00am

The thesis of this post is "off the mark". Tinely delivery is NOT a big deal.

"Dipping into reserves" for natural gas in winter SHOULD be a normal part of business. The US transports NG all year long, stockpiling it during seasonal slack demand (spring & fall) for later use during periods of high demand. An entirely porper use of resources (why drill more wells than needed, build bigger pipelines than needed, when it is cheaper to build storage facilities).

I could imagine that Russia once had such a massibe supply/demand imbalance that they could supply dead of winter (a Russian winter at that !) demand with production straight from the well and avoid the cost of building storage facilities. But they have found new markets (at market prices) for that massive surplus and they need to enlarge their storage facilities.

BTW: I am pessimistic about medium & long term convential oil supplies, but much less so about natural gas. The use of NG for liquid transportation fuel will, however, soak up much of the worldwide NG production within a decade, IMO.

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Gets IT on January 19, 2006 - 7:03pm

Occasionally it could be more cost effective to build a larger diameter gas pipeline with a higher allowed operating pressure to gain some storage capacity (line pack) within the pipeline itself, but generally this storage capacity results only from the difference between the line pack of the pipeline at the flowrate needed to satisfy the current average demand vs. the line pack you could get if the pipeline was at maximum allowed pipeline pressure. Of course this type of storage volume is usually only able to supply enough to get you through a 1 week cold snap or so. A lot of gas storage is also done very economically by using previously depleted gas fields in the US NE areas, where the gas is transported in and injected into the depleted wells during summer and taken out during the winter.