Major capital investments in the North American gas shales sector could accelerate rates of drilling and production to cause downward pressure on prices. An article on the Reuters.com website explores gas shale investments and their potential impact upon prices.
The low price of natural gas has some people questioning the profitability of shale gas plays in the United States. An article on the NASDAQ.com website explores these questions – especially with the entry of major oil companies into the plays.
An article on the EnergyTribune.com website reviews how just a few years ago LNG terminals were being built in the United States to receive liquefied natural gas, yet today some of those same terminals and more are candidates for exporting the same commodity.
“Wholesale spot natural gas prices rose across the country in 2010. Average spot natural gas prices at the Henry Hub—a key benchmark location for pricing throughout the United States—rose about 12% in 2010 but still averaged under $4.50 per million British thermal units (MMBtu).” Quoted from the Energy Information Administration article.
An article on the CNBC website explores how low natural gas prices and a push for more renewable energy sources will be obstacles for natural gas development…. but some people think that both of these are “good”.
According to a FuelFix.com article, analysts at the Energy Information Administration say that “increased capital costs and lower natural gas prices make it uneconomical” to construct a new pipeline to bring natural gas from Alaska to the lower 48 states.
Even though natural gas prices have fallen significantly and many in the industry say that there is a “gas glut”, Shell Oil Company is investing heavily in natural gas. President Marvin Odum says they will produce more gas than oil by 2012. More at CNN Money.
Wellhead prices for natural gas have been low. Total inventory levels are near the 5-year high for this time of year. Data from Energy Information Administration.
The United States Department of Energy expects natural gas drillers to cut back on new drilling in response to lower natural gas prices. Some companies such as Chesapeake Energy are moving their focus toward drilling for oil. More at Bloomberg.com.
Range Resources has entered into agreements that promise most of its 2011 natural gas production at a price of $5.12 per million BTU. Much higher than current market prices. More at the Star-Telegram website.
Natural gas supplies in some parts of the UK are out of balance with very cold weather, an LNG supply source running out of gas, system pressures falling, and spot prices shooting up. More at Bloomberg.
An article in the Oil and Gas Journal gives a forecast of low natural gas prices through 2011 based mainly on an abundance of new gas from shale.
The largest natural gas distributor in Japan is renegotiating all of is contracts with LNG suppliers. More at Bloomberg.com.
In early 2009 falling wind energy prices crossed an important barrier – they fell lower than the energy cost of natural gas. Since then gas prices have plummeted and wind energy is back to a disadvantage. More at SmartGrid.
Steve Kirchhoff, the ExxonMobil vice president for natural gas, reviewed a number of factors that will determine the long-term direction of the natural gas industry in the United States. More at PennEnergy.com.
The Energy Information Administration has published the monthly estimated average wellhead prices of natural gas through October. The price fell from $3.78/Mcf to $3.51/Mcf. More on their Natural Gas Update page.
Thanks to a number of shale gas plays in the United States the supply of natural gas is up and the price of natural gas is down. An article at Reuters.com reviews opportunities for natural gas to displace other fuels that emit more carbon dioxide when they are used.
The EIA Monthly Energy Review has a long-term chart of primary energy consumption. During the economic downturn of 2008-2009 the consumption of petroleum and coal fell significantly, however, the consumption of natural gas remained steady. Low natural gas prices and increased use of gas at electric power plants helped consumption remain steady.
A blog post on the New York Times website has some quotes from William Colton, an Exxon vice president, about natural gas being a beneficiary of carbon emissions policy.
Low-cost natural gas from shale plays is moving electricity generation away from coal, delaying development of alternative energy, killing LNG import projects, launching LNG export projects, changing the geography of energy transport, demanding thousands of miles of new pipelines, motivating homeowners to install gas heat. More in an article on the StarTribune.com website.
Homeowners, businesses, factories, schools and others who use a lot of natural gas might see their energy bills fall from the new glut of gas that is hitting the market. Those same low prices might cause gas to displace coal at some power plants or delay the development of alternative energy projects. This article explores the many economic impacts of lower natural gas prices. More at FuelFix.com.
Natural gas prices are being held down by a glut in supply while prices are being supported on the low end by fuel switching. The result is a narrow trading range. More at Bloomberg.com.
Over the past two years the wellhead price of natural gas has been up to $11/MCF and down to $3/MCF. In an article on the Star-Telegram.com website, Devon Energy Executive Chairman Larry Nichols comments on the sustainability of extremely high and extremely low prices.
TransCanada Corporation and Denali both want to build a pipeline across Alaska and into Canada to deliver Alaskan natural gas to US markets. However, their economics are being damaged by inexpensive natural gas from numerous shale gas fields.
Shale wells that produce natural gas liquids or natural gas and light oil can be much more profitable than a well that produces only natural gas. An article on the Seeking Alpha website explores the “hybrid” production model.
An article on the RigZone website explores the long-term role of shale gas production and how it will influence global natural gas demand.
Peter Voser, CEO of Royal Dutch Shell, sees the demand for natural gas growing twice as fast as the demand for oil – motivated by potentially lower prices. Those same low prices might compete with the rapid development of renewable energy sources. More at GlobalLegbridge.
James Rogers, CEO of Duke Energy Corporation, predicts that more utilities in the United States will build natural-gas-fired instead of coal-fired plants – if the price of gas remains stable. More at Bloomberg.com.
An explosion of natural gas from shale is swamping the market with an abundance of new gas, upsetting investment models for LNG terminals and making gas cost-competitive with coal. More at The Hill.
“Despite a sharp decline in Henry Hub spot prices from the levels reached in the summer of 2008, natural gas production in the Barnett shale in Texas continued to climb through the middle of 2009 and appears to have reached an undulating plateau since then. Production growth in the Barnett shale comes from several large natural gas producers who continued to maintain strong production even in an environment of relatively low natural gas prices.” Quoted from the Energy Information Administration’s Natural Gas Update.
