Dr. Loren Scott (LSU) gives a bleak outlook for the Haynesville Shale
Did anyone hear LSU economist Dr. Loren Scott on WBRZ (Baton Rouge) last week? He gave a bleak outlook for the Haynesville Shale after 2011. Two reasons for his less than enthusiastic prediction were given. First, the continuing low cost of natural gas was noted. Second, he seemed to think that the cost of drilling in the Marcellus Shale was significantly lower than the cost of drilling in the Haynesville.
Will the recent action of the New York Legislature regrading "fracking" in the Empire State have a significant impact on the Marcellus Shale?
This was not the news I needed to hear.
Views: 412
Replies to This Discussion
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Permalink Reply by Spring Branch,mineral owner on
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Economists are average prognosticators regarding economics. I would seriously question their ability to forecast in the oil patch. I would be apt to take the other side of this call.
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Permalink Reply by RONNY on
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If economists really were good at predicting the future they would be the richest people on earth. I've already taken the other side of his call. I sure hope his forecast is wrong.
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Permalink Reply by essay on
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even if it is relatively cheaper in the marcellus right now, it won't be after the epa and their minions get done with em up there.
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Permalink Reply by Bruce on
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First off let me say that I am an economist. Having said that, all I can say is that a prediction is just that- a prediction. Dr. Scott, I'm sure is getting his ideas from historical data from both regions which can only tell him what has happened in the past-that's all. He's trying to extrapolate from this what the future will be and there are too many extraneous variables that cannot be figured in such as political climate in each region, possible natural or man-made disastors, overall macroeconomic activity, and in which region things are going "good" and in which regions things are going "bad", also what is happening overall with the world economy. I wouldn't worry too much about an economist's prediction, it is just an opinion. This reminds me of a story I heard once that president Johnson wanted a one-armed economist. When asked why, he said they always explained the situation as they believed it to be but always covered their bets by saying, "on the other hand". I guess it is good to have a man's opinion but I prefer the opinion of the industry types her on GHS.
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Permalink Reply by Les Bamburg on -
CM, I would not necessarily consider things bleak but the level of drilling activity in the Haynesville Shale will likely be at a reduced level in 2011 & 2012. The current oversupply in natural gas has led operators to shift activity toward other regions (Permian Basin, Eagle Ford Shale, Granite Wash, Bakken Shale, Marcellus Shale) that offer better returns in a sub-$5 gas market.
The Marcellus Shale is a shallower, lower pressure play that provides a higher net natural gas price and a higher gas volume recovery per capital dollar invested. These factors make it one of the most economic natural gas plays but there are limits to the ability to ramp up the development pace. The vast majority of the play is outside of New York so the NY regulations will have limited effect on the pace of development.
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Permalink Reply by essay on
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assuming that the hysteria is contained to new york state. pittsburgh has already enacted a ban.
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Permalink Reply by Mac Davis on
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Geez, Goshdarn, isn't bold text bad enough?
Now it's right justified?
How about centered text?
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?redro txet thgir ot tfeL
Ubj nobhg EBG-13?
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Permalink Reply by Clyde T. Williams on
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Let's all go to bed and think on such a lovely day across the US
Peace on Earth for some and Good Will toward many...
Tom
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Permalink Reply by drilltheshale on
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Loren Scott has a good reputation for sure and he's joining in a general gloom and doom for the HS which accompanies a general gloom and doom for our US economy for decades to come?
Remember the 1990's when economists were predicting the boom times and balanced federal budgets had no end in sight and Alan Greenspan even publicly worried about the financial implications of the federal government completely paying off the national debt in a few years, thereby perhaps upsetting even the financial markets?
And those were supposed the be the best and brightest of all. Who can really predict. And it's funny, the experts in the business keep punching 8 million dollar holes in the ground. I imagine they're expecting a return.
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Permalink Reply by Stevew on
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The Best and Brightest??? Remember that few economists foresaw this recession or the problems with housing loans - very few.
I don't know where it is cheaper to drill for NG, but I am interested in the fundamentals of NG development, worldwide. This is the view from a boy raised in the Greenwood School in Caddo Parish ...
I am no expert in NG development or economics, but isn't this a classic illustration of a relatively free market at work? There is demand for a product (NG) and a short supply. But, fairly quickly the supply of NG has risen and shows no sign of slowing down. Shale gas might be the most abundant form of fossil fuel on earth. The problem is that we have found it quicker than we have made new markets for it.
The bottom lime is supply and demand. In the past several years the supply of natural gas has increased beyond anyone's predictions. We were looking at building many terminals to import NG on the West Coast, and most of those have now been canceled. People were expecting a shortage, but SURPRISE, we have now found a lot of it, not just here in America, but around the world.
It's really a tribute to the profit motive in research and development that lead to the breakthroughs in being able to drill deep and sideways.
However, if you look on the demand side, there has not been all that much growth in demand. Usage in cars and trucks is still way behind and we could be producing electricity, but demand for that is down too.
We need more markets for NG - using it in cars or more electricity generated or something. Just think of the geopolitical game changer it could be in small countries around the world. No more stranglehold by OPEC, Iran or Russia. Do you realize how much of the world still heats by burning wood or paper or plastic or anything that will burn at all? Natural gas production could be a boon to many 3rd world peoples.
Logger ... and we in Oregon thank you for purchasing a GENUINE Douglas Fir tree for your Christmas!
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