seahorse3 wrote:Let's start from the beginning. The US was a lot cleaner 200 years ago
seahorse3 wrote: Where is the product? If NG is the answer, why aren't there any NG cars for sale in my county? Why aren't there any NG stations in my county?
seahorse3 wrote: All the the NG they pump out of the ground just gets put in storage tanks. We keep adding more to storage, decreasing prices making it less economical to drill, but all this NG doesn't get used for anything...."
seahorse3 wrote:There are an estimated 250 MILLION cars in the US and only 114k use NG. Big deal.
+1Plantagenet wrote:Actually, all those horses and horse-drawn buggies meant the streets in cities and towns were full of horse-poop. Towns were filthy cesspools 200 years ago.
The Horse & the Urban EnvironmentWhile the nineteenth century American city faced many forms of environmental pollution, none was as all encompassing as that produced by the horse. The most severe problem was that caused by horses defecating and urinating in the streets, but dead animals and noise pollution also produced serious annoyances and even health problems. The normal city horse produced between fifteen and thirty-five pounds of manure a day and about a quart of urine, usually distributed along the course of its route or deposited in the stable. While cities made sporadic attempts to keep the streets clean, the manure was everywhere, along the roadway, heaped in piles or next to stables, or ground up by the traffic and blown about by the wind.
Nineteenth century urbanites considered the stench or miasmas produced by the manure piles a serious health hazard, but cleaning was sporadic at best. Manure piles also produced huge numbers of flies, in reality a much more serious vector for infectious diseases such as typhoid fever than odors. By the turn of the century public health officials had largely accepted the bacterial theory of disease and had identified the "queen of the dung-heap" or fly, as a major source.
Because of the manure on the streets, especially when rain created a quagmire, "crossing sweepers" (like those in London), appeared, to help ladies and gentlemen wade through the liquid manure. Citizens frequently complained about the "pulverized horse dung" which blew into their faces and houses and which covered the outside displays of merchants. The paving of streets accelerated the problem, as wheels and hoofs ground the manure against the hard surfaces and amplified the dust. Writing in Appleton's Magazine in 1908, Harold Bolce argued that most of the modern city's sanitary and economic problems were caused by the horse. Bolce charged that each year 20,000 New Yorkers died from "maladies that fly in the dust, created mainly by horse manure."
Quite simply: OIL IS BETTER! It has a higher energy density, is easier to transport, allows vehicles to go farther, gasoline cars don't carry a 10K price premium over NG cars, etc. Why would you pay more for something that gave you less utility? Of course you would by the cheaper gasoline powered car that has more utility(range, etc.). Unfortunately oil is getting more scarce and more expensive. As it does, alternatives like NG start to look more attractive.seahorse3 wrote:Where is the product? If NG is the answer, why aren't there any NG cars for sale in my county? Why aren't there any NG stations in my county?
pstarr wrote:Oilguy wrote:The New York Times Vendetta Against Natural Gas
New York times does not do vendettas
pstarr wrote:I hope you two have dis-invested from Chesapeake et.al.
pstarr wrote:I guess that makes you smarter than the other playa's
pstarr wrote:So you see another round of ready investors?
Two weeks ago, Sasol, Ltd (a South African company) announced its intention to invest between $16 and $21 bn in an integrated gas-to-liquids (GTL) and ethane cracker complex in Westlake Louisiana. According to the company press release, the complex is expected to create 1,253 direct jobs with salaries averaging $88,000. This would constitute one of the largest foreign direct investments ever contemplated in the US, and represent one of the top ten economic drivers in Louisiana, and the state is reportedly paying $2bn in tax incentives for the privilege.
The project would yield an estimated 96,000 barrels of diesel per day, with 48,000 bb/day to be delivered in an initial phase and the remainder to follow in a second. The ethane cracker would produce 1.5 million tons annually of ethylene – a basic element used in the chemical industry.
Sasol has been in the synthetic fuels business for over half a century, deriving its initial experience in South Africa when the country was isolated during the apartheid years, and it produced liquid fuels from coal turned to syngas. In 2007, it constructed a large GTL plant to take advantage of Qatar‘s abundant gas resources, and it now has facilities planned or under construction in a number of countries such as Nigeria, Uzbekistan, and Canada.
Sasol’s move to the US is driven by the shale gas boom. As stated on their website: “Along with the de-linking of oil and gas prices, and the abundance of gas at relatively low prices in North America, Sasol is well positioned to convert the low-priced gas into high-value transport fuels.”
The technology to be utilized is the Fischer Tropsch process, the same technology to be used to convert landfill gas to airline fuel for British Airways starting in 2014. The aviation company recently announced it was committing to purchase $500 mn worth over ten years. And while tried and true, the 90-year old technology is also expensive at scale. An article in yesterday’s NY Times highlighted a cost overrun of 3X for Royal Dutch Shell’s $19 bn Pearl plant in Qatar, as well as a joint effort by Exxon Mobil and Conoco Phillips that never got off the ground.
According to the NY Times, the economics only work when there is a significant arbitrage opportunity between the price of natural gas and the price of oil, where those prices are around $4 per thousand cubic feet and $100 for oil, and production capital costs are kept in line. It works at those prices because at $4 per mmBtu, the energy contained in natural gas is priced at the equivalent of $24 per barrel of crude oil, according to the Financial Times.
Sasol’s bet is an interesting variant of the so-called natural gas highway, and it approaches the same holy grail from an entirely different angle: Clean Energy, Shell Oil and others are building out the natural gas highway infrastructure, dotting the landscape with LNG and CNG stations. Meanwhile the major truck engine manufacturers are developing and manufacturing engines to run directly on natural gas.
By contrast, Sasol plans to leave the highway infrastructure and engine conversion to those other parties. They intend to convert gas into diesel for existing engines and infrastructure (don’t raise the bridge, lower the river).
Both approaches involve investments in the billions and rely on a healthy spread between low-priced natural gas and more costly petroleum-derived diesel.
One thing that makes the energy sector so intriguing is the constant overlap between markets and politics. In many ways, energy security is synonymous with national security, and the supply and demand needs of the oil market can make the most unlikely bedfellows. One country that has been at the center of energy and politics for decades has been Israel. For years the country has been dependent upon foreign energy sources, but a major discovery by Noble Energy (NYSE: NBL ) and its partners has turned this situation on its head. Let's look how this massive natural gas find could affect both the political landscape and the pockets of major oil companies like ExxonMobil (NYSE: XOM ) .
With a name like Leviathan, it has to be big
In 2010, Noble Energy and its partners found something in Israel's offshore region that the country had been looking for since the oil embargoes of the 1970's; its own hydrocarbons. You might say that the company and the country found more than they could have hoped for. The Tamar and Leviathan fields are estimated to have as much as 30 trillion cubic feet of natural gas, which is enough gas to supply Israel for decades even if it were to convert all of its energy consumption from coal and oil to natural gas -- with enough left over to export. Noble Energy estimates that this gas field and the planned export projects could net the country more than $130 billion in energy savings and government revenue from gas royalties.
Of course, Israel isn't the only one making out from this deal, either. The nation's proven reserves account for more than 30% of Noble's proved reserves, and will likely be one of the company's premier energy plays for decades to come. On top of that, the U.S. Geological Survey estimates there are more than 600 million barrels of recoverable oil in the Leviathan field, which could boost the company's reserves by another 17%.
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