A few more thoughts on gas supply
Posted by Heading Out on April 18, 2006 - 6:17pm
If I were to have a concern with the report it would be that it may understate both the need for the external supply, and the availability of that supply. As I have been trying to point out, Gazprom is moving fairly aggressively to take control of pipeline distributions of gas around is sphere of supply. One of the major alternative sources is going to be that supplied through the LNG tanker fleet. But, as with European pipeline gas, the value of long-term contracts in face of a tight market is going to be critical to having enough energy as the changes in climate make for harsher winters and hotter summers in different parts of the globe
Net US gas imports equaled approximately 15% of all domestic demand, a figure that has remained relatively constant since 1999.It anticipates that US demand will grow by about 1.5 bcf over the next three years (which is a large tanker-load), but that also anticipates a sustained level of domestic production that may be hard to sustain, particularly if demand rises.
In 2004, net imports to the United States were 3.4 Tcf, which was an increase of 140 Bcf, or 4.3%, over the previous year. LNG imports grew 29%, to 652 Bcf. Net LNG imports grew to about 17% of overall net imports, up from 13% in 2003.
There were ten spot LNG cargo sales into the US during 2005, amounting to roughly 28 Bcf. These cargoes were not tied to any contract or swap arrangement. In 2005, spot sales were concluded with Cove Point, Elba Island and Energy Bridge.
The majority of spot purchases by US capacity holders are the result of supply interruptions or extended maintenance schedules on the regasification side of the chain. High natural gas prices in the US were not responsible for attracting these spot cargoes.
LNG diversions from the US in 2005 totaled approximately 64 Bcf. Most of these cargoes were diverted from their Lake Charles destination and sent to Spain which suffered from low hydro levels. Other Lake Charles cargoes were diverted to Elba Island.
Interestingly if one goes to the comments one reads of the prognostications of our friends from CERA
I also attended all three days of the recent CERAWeek global energy confab in Houston. This article is replete with great data but I'm not sure it gets at the heart of the issue.To which there was this reply
The only practical way to evaluate the efficacy of LNG imports is to determine whether it can be delivered to US gas consumers faster and cheaper than domestic sources, of which this country still has plenty of reserves. At CERA, I heard several executives report that they can (and will) deliver gas from the Rockies, Canada, and west Texas for under $3.00/million Btu. Thus, the economics of LNG imports and domestic unconventional sources are comparable.
EPRI's opinion is that gas prices will not being going down in the future, and that $6/MBTU can be considered a "floor" price for gas (as delivered at the power plant). In theory, this price should be sufficient to make gas uncompetative as a source of baseload power. LNG may be able to bring in some gas a cost of perhaps ~$4, IMO, but I doubt the quantity brought in will be enough to drag the market price down to that level. Instead, the LNG terminal operators/investors will make that ~$2 as profit, which will probably be necessary anyway given the large up-front capital costs and risks of such projects.
The recognition of a balance between supply and demand, and the dawning possibility of supply not being able to keep up, or to actually fall, is also beginning to be a little evident in the MSM this past week, since it appeared in a couple of newscasts that caught my attention as I flipped around the dial.
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could you please expand on this bit of information? I am not familiar with the byproduct of 'sour water'. Where/how is it produced and at what scale?
thank you,
A concerned Sasquatch
A lot of these natural gas fields are unconventional and produces salty water with lots of minerals and other toxic substances.
Regarding Spain, with its increasingly unreliable Hydro-power supplies,
I read back in the '90s how villages were being abandoned
as it was no longer deemed worthwhile trucking essential water up to them . . .
and recently I read how in the great plains of the USA
some drilling rigs are unable to operate
because they couldn't afford to truck sufficient water in,
and local supplies are no longer available.
Some of those rigs were for oil, but I think some were for gas.
Can anyone clarify ?
I'm a bit interested in the interaction
of Climate Destabilization and Fossil Fuel Scarcity.
regards
Backstop
This also happened in Texas in the Fifites. Some parts of the state were abandoned because of a lack of water. Note that our population density is vastly greater than what we had then. Western writer Elmer Kelton described West Texas (and actually most of the American Southwest) as being in "A state of perpetual drought broken occasionally by rain."
Re: Drilling Rigs & Water
There were some reports of drilling rigs not being able to drill earlier in the year, because of a lack of water. We have had some rain since then; however, it is getting dry again.
They say the movie coming out in May featuring Gore's presentation of Global Warming, called "Inconvenient Truth" is very frightening to see.
As a lay person, I've been trying my best to keep up with issues on energy, on one hand, and climate, on the other, for the past couple of years or so. But I don't think I've seen anything as frightening as that Nova episode that I saw tonight...
And then, the terrible bind we've put ourselves in by the prospect of removing more and more of this visible pollution - which we must do: that of experiencing the full affects of global warming, which have been dramatically masked over the past few decades due to Global Dimming...
I know James Lovelock has touched upon this recently in some articles discussing his upcoming book, but this program got to the meat of that dilemma w/ extraordinay impact (at least upon me)...
The time crunch has become even more of a pressing factor than ever before...
I don't know, maybe having the peak of oil come sooner, rather than later is indeed - as awful as that would be - ultimately better for us and our planet as a whole...
We need a massive effort -- and the PBS effort fits into this, as does Minneapolis-based WCCO's ongoing "Project Energy" report -- to educate people about the nature and magnitude of the problems and about the deep culture change we need to make in response to our clumsy collective discovery ofthese ecological limits.
Thanks for the information, and I am sorry to have missed the program. However, the very nature of the problem (greenhouse gases, global warming) is quite observable to the average person, should they care to look for it. I live in central Virginia, just a short distance from Shenandoah National Park/ Blue Ridge Parkway. Yesterday, my permanently freaked out roommate and I drove up to the mountains for a hike. After climbing up the side of a big rock, I laid down on the smooth, cold granite and looked off in the valley below. The sight was quite disturbing: Although it was an otherwise beautiful spring day, I could clearly see a thick strip of brown smoke only a few thousand feet above the valley floor. What was striking was the contrast from the valley side of the mountain to the Peidmont side...the mountains were acting as a natural barrier, holding the pollution in place.
It was quite a disturbing thing to see, and brought it home quite clearly, to me, just how badly we have been treating our planet. You know, the only one we have. That one.
Is it just me, or has anyone noticed the rather severe weather we've been having around the world lately?
Subkommander Dred
Yes, that right there would be what the NOVA program last night described as contributing to "Global Dimming" (from the particulates we've put into the air) - the awful brother to Global Warming (from the gases such as CO2)
It seems that due to such particulates, we've been masking for ourselves the true nature of the greenhouse phenomenon that's been building up above and beyond these particulates.
Ironically, if we had only been faced with the greenhouse gases we've been emitting, we probably would have faced up to what's happening much sooner (for the effects would have been far stronger and more obvious far sooner than what we've actually been experiencing). Many of our models are still only beginning to be adjusted for this awful little brother of Global Warming.
That's the frightening dilemma we've created for ourselves: as Global Dimming subsides (a counter-cooling effect to Global Warming, but causing true horrors in its own right), Global Warming's full effects (from what's already in the air) will become more and more apparent...
Last week I had a conversation with a man that lives in the barnett shale zone of North Texas.He mentioned that presently gas well drillers pay $10,000 for water to land owners that will provide up 1,000,000 gallons of fresh water near a drill site.One landowner in that area with a private lake has made over $300,000 just allowing gas drillers to take her water.Talk of riches abounds from this area,with tremendous volumes of gas and oil being produced on some leases.Monthly royalty checks can easily run into the hundreds of thousands of dollars just from a 1/8 landowner interest
With a drought yet broken in Texas few people can or will give up their precious surface water.
I presume you mean a growth of 1.5 bcf per day...
It's interesting to see how demand estimates have been scaled back as well since 2000. Back then it was increases in production and consumption as far as the eye could see.
Now the debate seems to be over whether we could maintain the status quo on production. I think it's only been courtesy of some serious de-industrialization on the part of the US have the gas prices and supply not gotten more seriously out of whack. That and some mild weather.
It's worked so far, but at some point we're bound to run out of easy demand destruction and actually run short on gas. And according to EIA data, production does continue to decrease.
As its price, thanks to Atlantic arbitrage, will not be lower than what can be obtained in Europe, which is to a large extent indexed to oil prices, you'll end up with oil prices effectively constituting a floor on gas prices in NA.
European energy liberalisation forbids gas deliveries to the UK!
A European government caught being protectionist
EU Energy reform = give Britain access to the continent's cheap spare capacity
The recent postings on TOD suggest that oil prices have risen despite historically high inventory levels due to an excess capacity of heavy cruse, and a shortage of light, sweet oil. I have also noticed an increasing discrepency between the major oil contracts used to track oil prices (e.g. Brent Crude - nymex). There are several more oil indexing contracts that appear on the right side of this website (Crude - IPE, Brent Crude - nymex, Crude, E-Mini nymex, etc).
My question is "Is one of these indexes more heavily weighted in light, sweet oil?". If so, we should see a growing disparity in prices for this contract as compared to others that are more heavily weighted in heavy, sour oil. between light, sweet prices and heavy , sour prices.
Can someone tell me these contracts as far as how the different types of oil influence them?
That page is part of the EIA's petroleum navigator. It gives a whole range of grades, regions, prices. Step up one level to look at all the different ways oil is tracked and traded. These prices(Nymex, Brent, etc.) serve more as single numbers that can be used as reference points by everybody.
http://www.npr.org/templates/story/story.php?storyId=5349315
For him, I assume his income his good, he is in good standing with the elites, he's happily married, his kids are all upstanding and prosperous future citizens, life has never been better for him....
Now, if he would look at a little data, consider the longer term trends, be realistic about geopolitical disruptions (they are always there), consider the lead times on "unconventional sources" of hydrocarbons, consider the fact the the technology required to make ipods is not the same as that which creates new energy sources, consider that the "free markets" are not free and are crippled by myopia & groupthink, study geology a little bit, etc.--well, I could jump on the bandwagon.
Did it ever occur to him that production is not able to keep up with demand, plain and simple? Apparently not, but I assume he is comfortable, well off even, and he is often quoted by the MSM. For Daniel, life is good!
What a jerk he truly is.
Up in the Powder River basin in the northeast, the water removed from the coal to release the methane is a huge, contentious issue. Some profit by it, many don't. Wyoming and Montana are in a serious disagreement as the water quality standards. As you move farther west in the basin, away from Gillette, the water gets saltier. When that water is dumped into formerly dry drainages, little good results. Cottonwood groves are drowned, people have lost hayfields due to sodium buildup in the soil as the water table has been raised, and much of the sodium ends up in the few perennial waterways in the region like the Powder River. Montana is fighting to keep the Powder River at an acceptable standard for irrigation which includes little to no increase in sodium in the Powder River. Wyoming feels the sodium content of the water can increase and still not affect irrigators downstream. How quickly we forget that if sodium rises above a certain level, the soils will be worthless for hundreds to thousands of years (we don't get near enough rain to leach the crap out of the soil in any meaningful time frame.) The myriad problems resulting from the mad dash to develop gas in this dry country may persist long after the gas is gone, the money is gone, and the only ones left are those trying to raise cattle and support wildlife on land that has been seriously compromised in its ability to provide food, water, and cover to anything. There is no free lunch. Prices, up or down will mean little in fifty years when the gas is gone.
This from a Colorado woman, a life-long believer in the "free" market, veteran, all the typical background that should have made me someone who would write into the Billings rag about them damn dope smoking libruls interfering with my life-style.
God DAMN it! This is starting to really stir me out of my very comfortable life as the Model Citizen and think about re-reading Edward Abbey again...
But the secret, of course is- not many people, and the ones here with a real low outgo. Who would want to live here? It was murdered long ago and then they went away.
But where are "they" and where is "away" now? So- not very cheerful after all. Maybe after the crash.
Sorry 'bout that. I'm goin' out and dig the garden.
Life is full of little signs on a daily basis, no matter where we are, of things like weeds growing through the cracks in sidewalks. You made me realize that much of my despair is just as much a hubris-driven thing as the most rabid technophile. Nature will out. It may not be the same, or what we determine to be good, but adjustments of one sort or another will be made. Maybe we, as humans, are not really so omnipotent at destruction as we think we are at "improvement".
An interesting book I read not too long ago was by Martin Cruz Smith, "Wolves Eat Dogs". The locale for the action was Chernobyl, and detailed the changes in the environment that may not quite fit with our preconceived notions.
It's a sobering portrait of our society and our economic model.
Any info would be appreciated by myself as well....
- Lorax73
http://www.energypulse.net/centers/article/article_display.cfm?a_id=623
We really need to stop burning natural gas for electricity production.