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Permalink Reply by Skip Peel - Mineral Consultant on December 12, 2014 at 2:46

Any incremental growth in residential NG usage is of such small relative volume as to be inconsequential to demand.  Price differential for fleet fueling may slow some conversion decisions but probably not many as those decision makers look long term and CNG will always be cheaper to some degree.  Large scale end users such as electric utilities don't use fuel oil as far as I am aware.  NG will continue to displace coal.

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Permalink Reply by P.G. on December 12, 2014 at 3:02

Dual fuel vehicles and easy access to cng.
What would NG be price wise if it were equal to petroleum btu wise?
Isn't cng still a bargain compared to gasoline? Having room to increase if there were more demand for it?
NG prices aren't going anywhere until demand is created...
It would be nice if consumers could control the price of auto fuel rather than OPEC.

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Permalink Reply by Skip Peel - Mineral Consultant on December 12, 2014 at 12:15

I paid $2.18.9 Wed. at Sam's in Shreveport on Wednesday.  CNG was $1.89.9 in Mansfield that same day.

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Permalink Reply by P.G. on December 12, 2014 at 13:03

How much profit would be made from $2.189 gasoline vs $1.899 CNG?

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Permalink Reply by Skip Peel - Mineral Consultant on December 12, 2014 at 13:21

Profit for whom?  The station selling the fuel?  If so, probably pennies on the gal./GE.

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Permalink Reply by P.G. on December 13, 2014 at 3:46

Maybe I'm not understanding.

Isn't  there around 7 GE's (I GE 127 cubic feet) or more in a 1000 cubic feet of NG which is selling wholesale for less than $4..?
Seems like that would make the mark up quite a lot.
And sure if the driller were only selling it's NG at market ($4), the one retailing it as cng would be making the profit and not the driller but if the retailer were one of the driller's companies? Seems like NG would have more profit potential if marketed properly than gasoline. Just saying.
Like I say, maybe I'm not getting it...

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Permalink Reply by w.r. frank on December 12, 2014 at 11:57

TPH estimates s decline of 1 bcf/d of associated NG production  with $60 oil.

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Permalink Reply by Skip Peel - Mineral Consultant on December 13, 2014 at 4:00

Could be.  I'm unaware of the costs for treatment, transportation, compression and dispensing in addition to the cost of the gas at the wellhead.  Most of the fueling stations around NW LA are demonstration/promotion projects.  Except for any municipal fleet usage in large metropolitan areas the vast majority of vehicles fueling with CNG are owned by the industry.  There are very few private vehicles using CNG.

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Permalink Reply by P.G. on December 13, 2014 at 5:17

Yes, few private vehicles using CNG. That's what needs to change. And likely won't without good access to CNG at least like access folks have with gasoline.
It's looking now like OPEC has the US oil industry by the short hairs. Going the CNG route would take them out of the equation wouldn't it? OPEC would have to go back to driving camels if it had to compete with CNG.

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Permalink Reply by Skip Peel - Mineral Consultant on December 13, 2014 at 5:29

Two hurdles for CNG as a light duty vehicle fuel:  Storage - currently the only practical tank configuration is a cylinder.  To have comparable range to a gasoline fueled vehicle, a large cylinder that takes up much of the trunk space.  Personally, I use my trunk a lot and would not consider doing without it.  Fueling stations - chicken or egg,  which comes first?  The stations or enough light duty CNG vehicles on the road to make them profitable?  Once the storage challenge is solved then all we need is gasoline at a price so excruciatingly high that it is a no brainer to switch to CNG.  I suspect that may be somewhere in the $4 to $5/gallon range.  I doubt the Saudis are worried.

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Permalink Reply by tc on December 13, 2014 at 7:00

Lets not forget the Middle East also has a ton of NG.  Also NG is not priced at $4mcf for much of the world, try over $8mcf, so CNG is not very competitive in the rest of the world and OPEC/Saudis sell us very little oil.

OPEC/Saudis will be able to influence world energy prices long after we all die, even if the US is energy/oil independent.  A common misunderstanding of most people is that energy independence does not make the US energy PRICE independent from OPEC due to our capital system.

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Permalink Reply by Francis Mayo on December 13, 2014 at 7:51

It is always good to have some people on here to point out reality. In addition to all stated, it is seldom talked about but OPEC and the Saudis guaranteed our growth throughout the past four decades. Our country reneged on its promise of convertibility agreed upon at Bretton Woods. In 1973 our president and Kissinger promised OPEC and The House of Saud we would be OPEC consumers as long as they bought our bonds, consistently investing in T Bills and propping up the dollar. They back our funny money and have for as long as a good many of us have been alive.

It is very comical to hear NG dreamers and assorted flag wavers talk about NG and shale oil forcing the Saudis to mount camels once more. Where would our economy of hype and bubbles be without OPEC and the Saudis? All NG dreamers and shalers actually think we will be able to thumb our noses at the Saudis. This is nonsense, they literally have us over a barrel. Let us face reality about the situation.

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