OT: Global impact of cheaper US natural gas on manufacturing

Seems a nice trend for as long as it lasts:


"A natural gas boom in the United States has sent manufacturing costs plummeting, and European companies are setting sail across the Atlantic to stay competitive. U.S. natural gas prices have fallen to a quarter of those in Europe, a gap that has swiftly widened in the last three years as shale gas has taken off. Many companies expect a long-term realignment...."


European industry flocks to cheap U.S. gas - The Washington Post





Will this create real employment opportunity, or just another picnic for the energy arbitragers?


Too bad Jeff Skilling will miss the fun - or will he?

Earthquakes?

Wastewater Injection Spurred Biggest Earthquake Yet, Says Study | Lamont-Doherty Earth Observatory

It makes me wonder why plants are not built in Iraq and Iran, given the high percentage of gas that is flared off due to no market for it.

About time

Cheniere Energy, Inc.

Cheap resources are never been a benefit to a country. Norway is the only exeption.
Look Russia - they have everything yet their life is a misery.

I second JRs thoughts, it aint gonna end good,cept for the rich guys.
Gw

About time

Cheniere Energy, Inc.

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I take it you are either in an energy lease or own stock in a pipeline or energy co?

The objective of the above facility is to export cheap US gas at a higher price than can be earned domestically due to glut, so the US citizens (peons) who don't own energy resources don't get such a good deal and have to pay closer to world prices.

Can't say which side I fall on. My only chance of a retirement income is to let 'em frack, baby frack. But so long as I am not disabled , I am completely against fracking here in NY state until there is a lot more transparency and oversight into the fracking methods/chemicals that will be accepted here. Again, since there might be personal benefit to higher gas prices, facilities like Cheniere look at least "interesting".

On a more global outlook, higher gas prices even domestically (as such export facilities will cause) would not be all bad, since it will be less close to undercutting solar development and other "natural" alternatives such as wind. And people won't get complacent again about not being energy efficient in zillions of small ways.

So, "About time" - from what perspective in your view?

smt

jim rozen said:

Earthquakes?

Wastewater Injection Spurred Biggest Earthquake Yet, Says Study | Lamont-Doherty Earth Observatory

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Meh, we're getting into inert gas fracturing now.

Mark Rand said:

It makes me wonder why plants are not built in Iraq and Iran, given the high percentage of gas that is flared off due to no market for it.

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Because their gas fucking sucks, it's laden with sulfur.

Having been to a few gas conditioning conferences, it's readily apparent that the streams we pull in America from the Woodford, Barnett, Palo Duro etc are of extremely high quality. Not only are they high BTU, but they are often completely free of H2S. When you look at the processing cost of our high BTU/low sulfur gas to the lean/sulfurous stream they have it's a no brainer.

Also, pipe-lining in the desert sucks. Similar geological challenges to northern pipe-lining (the unstable ground conditions), coupled with huge temp swings and volatile natives.

That said, they do have some very large plants. Seems like one of the ones recently discussed had twin 36" or 42" headers feeding it and a several thousand GPM amine system.

tlfamm said:

Too bad Jeff Skilling will miss the fun - or will he?

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Unless they let him Day Trade from his prison cell. He's got 22 years left on his stay at the Englewood Federal Correctional Institute.

Mark Rand said:

It makes me wonder why plants are not built in Iraq and Iran, given the high percentage of gas that is flared off due to no market for it.

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It comes down to poilitics.... There is a huge market for gas.... In this area there is $18 billion being invested into gas facilities exclusively for export..

Yes in our country it is a free for all for natural resources... Hell why sell it here, when you can sell it overseas for cheaper...

lazlo said:

Unless they let him Day Trade from his prison cell. He's got 22 years left on his stay at the Englewood Federal Correctional Institute.

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He's also got some high-priced legal talent continuously trying to crowbar him out of his federal condo. I wouldn't count old 'effing smart Jeffie out just yet.

And is Ken Lay really dead? If so, it was the most convenient expiration of the century.

RC99 said:

It comes down to politics....
Yes in our country it is a free for all for natural resources... Hell why sell it here, when you can sell it overseas for cheaper...

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Heavey Metal said:

U.S. liquefied natural gas to help economy, government-backed study says | Reuters

A U.S. government-sponsored report offered a strong endorsement for expanding liquefied natural gas exports on Wednesday, saying that shipping the nation's surplus gas abroad would clearly help the overall economy even though it will cause domestic energy prices to rise.

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Echo... echo...

In the past 6 months, the price of Nat Gas has just about doubled, in the US. There is obviously no glut, as such has been sold to offshore buyers, at 14 or so per MCF. 4 bucks per MCF, now, 2 bucks 6 months ago.

So called "cheap energy" will never be seen in the US, so long as there is a market elsewhere that they can get more for that product.

Keystone XL is the same. It is not to provide more TO the US, it is to make it easier to ship Tar Sands, AND Midwestern Crude, to the Gulf to be shipped overseas. As Ries has said, yu in the Mdwest, with low gas price, will see it come up to par with the rest of the Country.

Congratulations! You are so fucking brilliant you would fuck yourselves to remain TRUE REPS. You are ALL so goddamned rich, and you will get even richer when the price of YOUR fuel skyrockets.

"A U.S. government-sponsored report offered a strong endorsement for expanding liquefied natural gas exports on Wednesday, saying that shipping the nation's surplus gas abroad would clearly help the overall economy even though it will cause domestic energy prices to rise."

There IS no surplus! Unless it is a manipulated surplus. One day we have 400 thou bbl. more than estimated, oil goes down, next day, another Gov report says that we are down half a million bbls, oil, per the speculators, goes up.

We sell half our production into the World Market. We ARE, actually, oil independent, but there would be no money to be made, were the oil trade static. As long as they can keep us scared, they can do all they want to. Began when they fucked over Carter. "You can tell us to ration Gas, but WE do the delivery. We don't deliver,it is all on your head.

We have been fucked over by oil Co.s ever since. They were equivalent to Public Utilities, up to then.

So many assholes on the site, young, all making money off speculation, no wonder.

George

If you don't think there's an oil surplus you need to visit Cushing, OK; they're throwing up storage facilities like crazy.

Same with gas storage, it's pretty damn full industry wide.

Same with gas storage, it's pretty damn full industry wide.

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There's also a lot of small wells all over that are drilled and capped until the day they can get higher prices.

There's also a complications: keep in mind how much Sinopec continues to invest in US energy positions. They have between 30% and 50% (may be higher now, I have not been tracking) of many of Chesapeake's best fields. I can't figure out if exports will encourage further foreign investment (ownership) due to higher profits, or if keeping it domestic and reducing company profits will make them cheaper so foreigners can't afford not to buy more? You can bet Sinopec endorses export, they win 2 ways.

Heavey, you still have not said what part of the equation you endorse with the links you are posting: Higher cost for consumers, or higher profits for producers such as leaseholders & the foreign nationals that are buying up our reserves?

The re-surgent energy industry does create a lot of jobs and will continue whether product is used domestically or exported to keep prices high here. Only factor that might change is whether the jobs won't be so extreme paying that every fresh faced HS kid that signs on for a grunt position with a drilling outfit is forced to immediately buy a white extended cab 4wd 350 dually for personal transportation....(which does create more jobs in the auto industry...here and in Mexico... of course).

smt

I'm seeing a lot of those wells come back, but that's a small segment of one field and is limited to a few producers. However, it is nice that theyre bringing the flows back on. Now if we can figure out what to do with it...

Side note- the wells aren't capped, they're blocked in. In industry capping is (relatively) permanent, blocked in means we shut the valve.

If you yankees dont want to pay the bill all you have to do is turn the heat off and quit driveing.

I guess that you could drill your own wells.

Also why would you prefer to export blood to arabia instead of energy to the world market.

Heavey Metal said:

Also why would you prefer to export blood to arabia instead of energy to the world market.

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It will go where ever the highest profit margin lies. Same reason why we're at the highest domestic oil production in American history, but we're shipping the vast majority of it overseas. $$$$

Likewise for the Keystone XL pipeline. That crude is meant for export overseas -- the pipeline, as proposed, ends at the Port Arthur Refinery, which is owned by Aramaco (the Saudis).