Replies to This Discussion

Permalink Reply by Les Bamburg on August 24, 2011 at 13:47

Skip, so are you thinking climate change?  There is not much that will happen in next few years on that item.

 

If you are thinking transportation, the Hill does not see a reason to give loads of taxpayer money to a few people like Boone.  Consumers already could drive that issue by shifting to a cheaper fuel - natural gas.

 

By the way, I can tell you from personal experience that majors do not carry much stroke.  Actually just the opposite - government seems to have distanced themselves from "Big Oil".  

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Permalink Reply by Skip Peel - Mineral Consultant on August 24, 2011 at 13:52

No, not climate change.  And no, not transportation.  And no, not "government" in the sense I think you mean.  I'm referring to Congress voting on behalf of special interests.

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Permalink Reply by Les Bamburg on August 24, 2011 at 18:43

Skip, so if I follow what would be the policy that would help natural gas beyond climate change, environmental and/or transportation?

 

I can say that the majors have advocated with Congress for natural gas for the last 10+ years thru their trade association along with several other major trade associations that promote the use of natural gas.  There has been this misconception that "Big Oil" was anti-natural gas which couldn't be further from the truth since natural gas accounts for the majority of their profits. 

Permalink Reply by Kat Bloomfield on August 24, 2011 at 13:50

BINGO

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Permalink Reply by Kat Bloomfield on August 24, 2011 at 13:49

This hits the nail on the proverbial head.  Without a national energy policy that promotes and advocates the use of natural gas, what's the point of producing?  Really.  It just seems so common sensically simple.  Our nation needs jobs.  We have abundant resources of natural gas.  A relatively clean fuel that can power not only light manufacturing, but even shopping centers and new real estate developments.  How simple would it be to attract light manufacturing to relatively rural areas that provide an abundance of inexpensive clean fuel for powering?  Or, am I just being too simplisic? 

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Permalink Reply by Skip Peel - Mineral Consultant on August 24, 2011 at 13:56

Agree, Kat.  And I think we will reach the political tipping point when enough shale reserves are owned by companies with more political capital.

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Permalink Reply by Les Bamburg on August 24, 2011 at 18:30

Kat, I do not disagree with the promotion of natural gas but that has to be translated into what is meant by "promotion".  This can fall into three categories.

 

1) Penalize fossil fuels that have larger impacts on the environment to level the playing field.  One example is a carbon tax to offset coal's price advantage.

 

2) Avoid impediments to the development of natural gas resources.  Unfortunately we may be headed in the wrong direction on that one as some states are moving forward with prohibition of hydraulic fracturing.

 

3) Subsidise the development of distribution infrastructure and vehicle purchases.  This is where I get concerned as I see the heavy subsides paid to ethanol and renewables from taxpayers' pockets.

 

Most energy currently provided to the industrial, commercial and residential sectors is either natural gas or electricity with natural gas accounting for ~ 30% of power generation.  So the only obstacle to natural gas capturing more market share in those sectors is cheap coal.

 

Ultimately consumers are the parties that make the choice regarding preferred energy supply source.  That is reason natural gas was able to capture an increasing share of the market from other fuels such as distillate and heavy fuel oil.  

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Permalink Reply by Linda Whatley on August 31, 2011 at 8:46

I'm with you Kate!!!

 

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Permalink Reply by Les Bamburg on August 24, 2011 at 9:12

DWS, BHP was falling behind other international energy companies in their resource inventory and needed to make a significant move.  Their earlier acquisition of Cheapeake's Fayetteville Shale assets gave them a start and the Petrohawk purchase moves them further along.  I anticipate their focus to remain on the Eagle Ford Shale with the Wolfcamp Shale the next project.  I would be surprised if they made any significant increase in the Haynesville Shale rig count over the next 2-3 years.  

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Permalink Reply by Robert on August 24, 2011 at 9:20

Les,  if what I am hearing is true it won't be 2 or 3 years.  Much sooner.

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Permalink Reply by Les Bamburg on August 24, 2011 at 13:50

Robert, it will be interesting and counter to trend.  So how many new rigs - 5, 10 or more? 

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Permalink Reply by Hopeful About Natural Gas on August 24, 2011 at 20:41

I tend to agree with Les D on the politics involved in this.  KING COAL has more lobbyists than BIG OIL.  By lobbyists I mean not just pros but regular folks willing to phone and visit their representatives.  Coal is unionized and O&G is not.  The unions can get hundreds of thousands of workers and their families to lobby legislators for them.

 

Money talks but money plus boots on the ground wins campaigns. Unions can get people out to vote but O&G have no such clout.  How many of you guys will lobby elected officials on behalf of shale gas?  A few, sure. But unions have nearly a century of lobbying experience.  Big money plus thousands of foot soldiers will carry this debate in congress (not logic or science or Bambi)

 

I don't think it's a coincidence that the strongest opposition to shale comes from states with large coal operations.  In Penn there are generations of people whose families have worked in union coal mines. They can campaign on issues like SAVE OUR JOBS and SAVE OUR LAND (forgetting how coal companies have raped the land.)

 

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