[BigTex]

I wonder why there is not more discussion of peak natural gas. Simmons talks about it, but there's not a lot of discussion out there about it.

Here are a few items that are cause for concern:

- Oil is portable; natural gas needs a lot more infrastructure to move around

- Unlike oil, which is produced in many countries and regions, a handful of players control most of the world's supply of natural gas

- I don't know what you do with a natural gas fired power plant if natural gas gets too expensive

- A huge amount of U.S. housing relies upon natural gas for electricity, cooking and heat. Thus, rises in price would hit their electricity and gas bills

- Given its literally ethereal nature, it seems like natural gas would be prone to much more dramatic price spikes if supplies got very tight

- There isn't an ethanol, biodiesel, oil shale and tar sands plan B for natural gas (at least not that I know of)

- The tighter the oil market gets, there is likely to be the sense that natural gas is another plan B for oil; thus, I see more demand pressure on natural gas at perhaps the worst possible moment

Anyone feel better about natural gas than they do oil?

[SILENTTODD]

Here in California we won't have to worry in most cases about heating, but I've read about 60% of our electric power comes from it.

I for one don't mind the heat. But we will have VERY HOT summers without air conditioning. Places like Palm Springs, Twentynine Palms, and where I grew up in the San Joaquin Valley are going to be for the desert rats only!

[KillTheHumans]

$this->bbcode_second_pass_quote('BigTex', 'I') wonder why there is not more discussion of peak natural gas. Simmons talks about it, but there's not a lot of discussion out there about it.

[Jack]

UNG is doing nicely.

I think we'll see much higher prices.

Frankly, I'll enjoy it.

[BigTex]

$this->bbcode_second_pass_quote('KillTheHumans', '6'),000 TCF in known deposits and a 100 TCF/year consumption rate means it might be a problem sometime, but it sure isn't one of scarcity during the next couple of decades.
Absolutely. CBM and unconventional production completely reversed the US production decline and brought it to a new peak level, and the rest of world ignores that end of the resource spectrum. To say "there is alot more to be found" is an understatement.

[KillTheHumans]

$this->bbcode_second_pass_quote('BigTex', 'I')f there is plenty, why is the price rising more or less in tandem with oil?That seems odd.

[Starvid]

No one needs natural gas for anything. It's completely optional.

Oil on the other hand...

This is why peak oil is much, much worse than peak gas.

[FoolYap]

$this->bbcode_second_pass_quote('Starvid', 'N')o one needs natural gas for anything. It's completely optional.

[KillTheHumans]

$this->bbcode_second_pass_quote('Starvid', 'N')o one needs natural gas for anything. It's completely optional. Oil on the other hand. This is why peak oil is much, much worse than peak gas.

[ROCKMAN]

Starvid,

A little update on natural gas usage:

Over the last 20 years 75% of new homes in the US use natural gas for heating (that surprised the hell out me when I read that report...why I can still remember the stat.)

Also, most of the electrical gid in Texas is powered by natural gas. Which is why consumers are starting to be clobbered here now that they're cranking up the AC. aAl the electric utilities in the state have fuel surcharges to recover their higher costs for NG.

Most high energy consuming industries, like aluminum, rely soley of natural gas.

Perhaps you live where NG isn't utilized to a great extent. Or maybe you were just being sarcastic. But that's OK...I enjoy sarcasm butI'm a little slow so don't be too subtle about it.

[seahorse]

Sorry for the tangent, but if anyone has any info on this little NG company, I would appreciate your sharing it.

Ticker symbol is NFEI.

Yahoo Finance

[cube]

I think in the future NG (natural gas) will be too expensive to be used for producing electricity. Nuclear power and coal will fill that role.
The advantage of natural gas is it's very useful for providing heat to homes.

20 years ago NG was probably averaging only $2 per MMBTU.
So it made sense to build NG power plants.
It's now a whopping $12 per MMBTU.

$12 NG is to electricity
as
$100 oil is to transportation
It's expensive enough to create demand destruction. --> it might cost more money to turn on an air conditioner than it is to drive an SUV. *seriously*

[BigTex]

$this->bbcode_second_pass_quote('cube', 'I') think in the future NG (natural gas) will be too expensive to be used for producing electricity. Nuclear power and coal will fill that role.
The advantage of natural gas is it's very useful for providing heat to homes.

20 years ago NG was probably averaging only $2 per MMBTU.
So it made sense to build NG power plants.
It's now a whopping $12 per MMBTU.

$12 NG is to electricity
as
$100 oil is to transportation
It's expensive enough to create demand destruction.

[cube]

$this->bbcode_second_pass_quote('BigTex', '.')..
What is your prediction regarding how natural gas prices will track oil prices from here forward? I think that natural gas prices potentially have more room to increase than oil prices, in part because the natural gas applications are less subject to demand destruction than oil applications.
...

[emeraldg40]

[ Well Tex.....where in Texas are you?

Barnett Shale is gonna keep us in the gold for awhile here in N Texas quote="BigTex"]I wonder why there is not more discussion of peak natural gas. Simmons talks about it, but there's not a lot of discussion out there about it.

Here are a few items that are cause for concern:

- Oil is portable; natural gas needs a lot more infrastructure to move around

- Unlike oil, which is produced in many countries and regions, a handful of players control most of the world's supply of natural gas

- I don't know what you do with a natural gas fired power plant if natural gas gets too expensive

- A huge amount of U.S. housing relies upon natural gas for electricity, cooking and heat. Thus, rises in price would hit their electricity and gas bills

- Given its literally ethereal nature, it seems like natural gas would be prone to much more dramatic price spikes if supplies got very tight

- There isn't an ethanol, biodiesel, oil shale and tar sands plan B for natural gas (at least not that I know of)

- The tighter the oil market gets, there is likely to be the sense that natural gas is another plan B for oil; thus, I see more demand pressure on natural gas at perhaps the worst possible moment

Anyone feel better about natural gas than they do oil?[/quote]

[BigTex]

$this->bbcode_second_pass_quote('cube', 'J')ust wait till electricity prices go up and society will be happy to politically approve any project that will *hopefully* help bring prices down. I think 20cents / kWh would be the breaking point.
50cents / kWh is within the realm of possibility much like $300 oil is possible IMHO.

[KillTheHumans]

$this->bbcode_second_pass_quote('BigTex', '
')
I think the term "economically uninhabitable" will be applied to larger homes when electricity reaches that price.

Excessive square footage will be regarded as a kind of "financial black mold."

[BigTex]

I agree with all of your ideas KTH and I have done many of them myself (to my house, of course, not yours).

I think that will work fine to counter the effects of a doubling of utility bills.

Beyond that, though, I think some people will struggle who are already spread a little thin even after the extra insulation is applied.

I do think that sales of high end efficient HVAC systems will benefit from all of this, though. That becomes cost effective at some point, just like a hybrid car does when gas prices reach a certain point.

[KillTheHumans]

$this->bbcode_second_pass_quote('BigTex', '
')
Beyond that, though, I think some people will struggle who are already spread a little thin even after the extra insulation is applied.

I do think that sales of high end efficient HVAC systems will benefit from all of this, though. That becomes cost effective at some point, just like a hybrid car does when gas prices reach a certain point.

[cube]

$this->bbcode_second_pass_quote('BigTex', '.')..
I think the term "economically uninhabitable" will be applied to larger homes when electricity reaches that price.

Excessive square footage will be regarded as a kind of "financial black mold."