[Amarant]

First post. I'm not going to introduce myself.

I'm wondering if anyone can answer these questions... I'm thinking no one can because these things are pretty specific and may vary from company to company and year to year..

Question 1.

How much does natural gas play in gasoline prices?



Question 2.

How much more does shipping (liquified) natural gas from the middle east add on to the price?


My inspiration is from the current (ASPO Dec. 2006) newsletter where it has the graph of the North American (Canada and US, not Mexico) gas projection (quite a steep decline). The president in 2008 will be in for a rough ride if it hits really, really hard (as it looks its going to according to that graph).

[ReserveGrowthRulz]

$this->bbcode_second_pass_quote('Amarant', '
')Question 1.

How much does natural gas play in gasoline prices?

[Micki]

$this->bbcode_second_pass_quote('', 'H')ow much does natural gas play in gasoline prices?

[MrBill]

Nat Gas is part of the heating complex and competes with heating oil in some parts of the US, but gasoline is a transport fuel made from refining crude oil. Gasoline and diesel fuel come from different ends of the same barrel of crude. Diesel and heating oil are refined from the so-called middle distillates.

Nat gas somewhat like electricity is harder to store than crude oil. That means that pipelines have to be 'always on' to meet demand. This is one reason why you see such spikes in the price of nat gas based on changes in perception of demand from cold weather for example. Electricity generated from nat gas competes with coal, but nat gas is used mainly for peak demand versus base demand as coal fired plants take longer to ramp-up compared with nat gas to meet surges in power needs.

At this time of year refiners are making more heating oil than diesel to cope with winter heating demand. But this production does not have anything to do with the supply of nat gas by pipeline. And as heating oil demand is highly local in the USA you could say they are complimentary versus being substitutes for one another.

Due to higher costs and weaker prices Canadian nat gas producers who supply parts of the USA via pipeline are capping wells and not drilling for new ones. This might explain why supply graphs may show a drop-off in production in their forecasts? US companies such as ConocoPhilips have seen their shareprices suffer as the market is not paying such a premium for nat gas producers at the moment. This is more incentive for them to concentrate their exploration and drilling activities on more lucrative crude production at the moment.

As far as I know there is no shortage of supply of nat gas and the futures prices are relatively flat between $7.60-7.90 per mmbtu. If there was a shortage or the perception of tight supplies then I would expect the prompt delivery market to be higher than the distant months. It isn't.

[Tanada]

Here I was thinking that Nat Gas is consumed by a lot of heavy oil refineries to supply hydrogen for 'upgrading' the tar like heavy oils.

From the responses above I seem to be the only one thinking that so I will now waste an hour or so on Google trying to figure out who is right.

[MrBill]

$this->bbcode_second_pass_quote('Tanada', 'H')ere I was thinking that Nat Gas is consumed by a lot of heavy oil refineries to supply hydrogen for 'upgrading' the tar like heavy oils.

From the responses above I seem to be the only one thinking that so I will now waste an hour or so on Google trying to figure out who is right.

[Tanada]

$this->bbcode_second_pass_quote('MrBill', '')$this->bbcode_second_pass_quote('Tanada', 'H')ere I was thinking that Nat Gas is consumed by a lot of heavy oil refineries to supply hydrogen for 'upgrading' the tar like heavy oils.

From the responses above I seem to be the only one thinking that so I will now waste an hour or so on Google trying to figure out who is right.

[MrBill]

$this->bbcode_second_pass_quote('Tanada', '
')
Aye, but you are talking about tar SANDS and the orriginal question was about HEAVY OIL'S like those in the Orinoco belt. You can't just mix the two up, Tar Sands under current practices require natural gas to get them out of the ground in the first place. This thread is about heavy oil from places like Orinoco or even Cantarell that also consume natural gas in the hydrogenation process during cat cracking at modern refineries.

The two processes I am referring to can be seen HERE and HERE and have nothing to do with tar sands recovery or upgrading per se.

[ReserveGrowthRulz]

$this->bbcode_second_pass_quote('MrBill', '
')
The mystery to me is why despite plans to mine, extract and produce more synthetic oil, hundreds of millions of barrels per day well into the future, why Alberta and Saskatchewan along with the Federal government are not rapidly exploring plans to ramp up a CANDU reactor in N. Alberta fired by uranium from N.Saskatchewan to produce that necessary steam, and fulfill other power needs, so that non-renewable nat gas can be diverted for export?

[ReserveGrowthRulz]

$this->bbcode_second_pass_quote('Tanada', '
')
Aye, but you are talking about tar SANDS and the orriginal question was about HEAVY OIL'S like those in the Orinoco belt. You can't just mix the two up, Tar Sands under current practices require natural gas to get them out of the ground in the first place. This thread is about heavy oil from places like Orinoco or even Cantarell that also consume natural gas in the hydrogenation process during cat cracking at modern refineries.

The two processes I am referring to can be seen HERE and HERE and have nothing to do with tar sands recovery or upgrading per se.

[TommyJefferson]

$this->bbcode_second_pass_quote('MrBill', 'A')s far as I know there is no shortage of supply of nat gas and the futures prices are relatively flat

[MrBill]

$this->bbcode_second_pass_quote('TommyJefferson', '')$this->bbcode_second_pass_quote('MrBill', 'A')s far as I know there is no shortage of supply of nat gas and the futures prices are relatively flat