Energy, Energy Service, Natural Gas & Oil Sectors
- JenL_2
- DennisL
- lcha
- lcha
- JenL_2
- JenL_2
- lcha
- lcha
- lcha
- lcha
This archived discussion is "read only".
For the corresponding "live" discussions, post in the active topic forum here.
« Previous 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 Next »
» JenL_2 - Lindstrom & Sun Solar Engineering, Inc
In response to message posted by Kirk:"Lindstrom and Sun Solar Engineering, Inc."
Hmmm - Sounds interesting - and might turn into something Really Big - like other companies that started in garages like HWP and AMZN! In any event you can deduct all the expenses related to your company, and I don't think you have to show a profit for three years. Maybe even use it to set up a SEP IRA or Keough Plan if you haven't already done so with your other consulting business. Heck - get the new company going and then hire someone else to run it. Go for it Kirk!.....Jen
-- posted by JenL_2
» lcha - Re: Good Thread
In response to message posted by Kirk:Kirk,
When I think renewable and environmentally friendly, I think solar. If you have the products, the ideas and the sweat, go for it.
I had the privilege to co-found and start up a small seismic data processing company in 1994. Three of us built the company from just ideas, recruited a few investors, grew the business over 4 years and sold to another company in 1998. We were profitable every quarter of our existence and took an offer we just could not pass up.( at the very top of the oil market in 1998, just before the bottom fell out. Sometimes you just get lucky.)
It was a lot of hard work but the experience was invaluable and richly rewarding both emotionally and financially. It was also the only way I was going to ever be able to achieve the title of vice-president without having to claw my way up some corporate ladder.
It would be interesting to see what a major solar research effort could come up with.
Did I mention my employment contract expires next year? 
-- posted by lcha
» lcha - Gas turbines redux
The following link is a GREAT read from another group on the amount of gas turbines expected to go online over the next 6 years. There are a couple of expandable graphs so I thought it might be easier just to click the link. It breaks down the extra power by states.Bottom line, there is a TREMENDOUS amount of gas fired power in the works. If only 1/4 of it actually gets done it will SWAMP our current ability to produce the NG needed. Drilling would need to double from where it is right now. I don't think we can do it without a MAJOR capital investment in oil & gas. It will take much more pain than we have felt so far to get that kind of investment.
The good news for me is that Texas has 3 TIMES the extra NG power planned than ANY other state.
-- posted by lcha
» JenL_2 - Busting the boom-and-bust cycle
Just posted this article about International Paper (IP) to the US General Stock Market thread....http://www.suite101.com/discussion.cfm/i...
I can sure see the parallels between the Paper & Lumber Products industry and Oil & NG industry in these excerpts:
The paper industry, like most commodities, classically works like this: Strong demand pushes up product prices, which, in turn, prompts companies to add manufacturing capacity. In time, though, demand drops and prices sink amid a glut of inventory. Marginal players typically end up cutting prices below production costs in a desperate bid to remain in business, which then prolongs the suffering for all..... Busting the boom-and-bust cycle ......Dillon, 62, aims to do nothing less than end the boom-and-bust cycle that has savaged paper-industry returns and destroyed billions of investment dollars. So far IP has enacted several Draconian measures to better align supply and demand, including a shutdown announced last October of 1.2 million tons of capacity in uncoated freesheet, market pulp and containerboard. The reductions, which demonstrated management's seriousness about clearing out excess and inefficient capacity, amounted to 18% of the company's uncoated freesheet, 7% of its market pulp and 5% of its containerboard production. In addition, the company took 1.4 million tons of market-related downtime in last year's second half, in response to slowing demand. "We can no longer afford to operate using the old methods," Dillon told Barron's in a recent interview. "We're making the tough decisions now, eliminating capacity and slowing production where necessary, so that when the market bounces back we'll be in a position to benefit."
Maybe I'm missing something, but what's the dif between what the Oil & NG companies did and what IP is doing?......Jen
-- posted by JenL_2
» lcha - Re: Re: Gas turbines redux
In response to message posted by JenL_2:I think we will NEED great strides in nuclear and alternative energy sources anyway. We seem to have finally woken up to the fact that we need more electricity but there is NO WAY we can produce the amount of NG needed to supply the turbines planned over the next 7 years.
To do this we will need great strides in capital investment in oil and gas and it is just not there. The O & G market over the past 3 years did not produce any meaningful venture capital investment. Our domestic production of oil and NG is going NOWHERE despite an increased effort.
A very disappointing sign to me is how many people in CA really feel that the recent energy crisis was/is not real and was totally manufactured by energy companies to boost profits. A population that believes this will not support making the HUGE investments to build nuclear plants.
I just don't think we will significantly change our sources of power without sustained higher NG prices. $5+ NG for several years will make alternative sources of energy look viable and might change our attitude on nuclear energy.
-- posted by lcha
» lcha - Re: Gas turbines redux
In response to message posted by lcha:I am deligently trying to poke holes in my bullish NG stance. Here is a reply to an opinion I asked about the above article that was posted on the PLLL BB on Yahoo.
We've been analyzing this article for a couple of weeks at work (it was in the June issue of Power Engineering). Some of the numbers appear to cover worldwide manufacturing and installation, not just USA. Nevertheless, the numbers are huge no matter how they are considered. We are pinching ourselves at work every day, it does feel like a dream (and we HAVE been there before!).
Like the recent Williams report, this article mentions, though just in passing, that "...the probability of all the projects being constructed is highly unlikely." One of the revelations in the article is the fact that current gas turbine manufacturing is protected by cancellation clauses. You'd have to go back to the 1984 boom and bust to find previous use of those clauses as a norm. A cautionary: in 1984 the customers paid the cancellation clauses and walked away from their purchases!
I agree with the Williams report conclusion that less than half of this gas turbine construction will occur. However, I believe their correct conclusion is based on the wrong reason, since they feel there is insufficient natural gas. Proposed LNG projects would solve the shortage, and there would be a permanent structural shift of ammonia and fertilizer plants offshore (just two examples) if supply and/or price became a problem.
The real reason all these gas turbines won't be installed is the economics. Unless electrical production is totally re-regulated, service reserve margins won't increase to 30% as stated in the article. Generators will continue to produce just enough electricity at the lowest possible prices. Many of the projects on the drawing board will not be viable after a significant amount of new construction goes on line. Unless the costs can be passed along to the ratepayers, how can a generator justify maintaining excess base-line and peaking capacity?
I don't know about the next decade, but it is certainly bullish for NG in the near term. That's why I'm here and fully invested in NG stocks at this point. However, stock prices will spike and slump just as we have seen recently. I'm not sure these commodity-type investments should be held for the long term. PLLL might be an exception, given its growth and strong position. Then again, will PLLL even exist as an independent company in a year or two?
-- posted by lcha
» lcha - Methane Madness
Methane Madness: A Natural Gas PrimerIn 2000 the wellhead price of natural gas skyrocketed 400%. This was the sharpest energy price increase the nation had ever seen, outdoing even the oilspikes of the 1970s. The price hikes hit hard, hammering homeowners, business, and industry, contributing to rolling blackouts in California, weighing on thestock market, and unleashing a frenzy of new drilling. It was, one expert wrote, a "train wreck." So what comes next? The stakes are high; 70% of newhomes are heated with natural gas, and the nation's electric utilities have wagered $100 billion that it is the "fuel of the new millennium." But what if theyare wrong? Was this winter's crisis a passing anomaly, or the tip of an iceberg? This Natural Gas Primer examines the past, present, and future of our mostversatile fuel.
SUPERIOR FUEL A transparent vapor, lighter than air, natural gas provides one-fourth the nation's energy. What we call gas is mostly methane, a wonderful molecule, ubiquitous and invisible, a polite servant which does many tasks well. Natural gas can heat your home, dry your clothes, grill your steak, run a car or a power plant. It is critical to agriculture, both as an energy source for food processing and as a key feedstock for fertilizer. About 45% of the nation's gas goes to industry-pulp and paper, cement and asphalt, chemicals, plastics, and petroleum refining. Gas is also the cleanest fossil fuel, producing about half as much carbon dioxide per unit of energy as coal. The nationhas 320,000 gas wells. Per capita, we use about a dumpster's worth of gas each day. Each year, 280 million Americans use as much natural gas as 3 billionpeople in Europe and Asia.
THE PAST AT A GLANCE Gas is the "youngest" of the fossil fuels; its use has risen 1000-fold since 1900.Domestic production was negligible before 1920, rose sharply after World War II, peaked in 1973, dipped duringthe "gas bubble" of the 1980s, and has flat-lined since. In the past 80 years, we've consumed about 950 trillioncubic feet. By some estimates, almost half the gas that will ever be produced in this country has already beenburned. Easy come, easy go. Half gone, half left. Much of the "gone" was cheap and easy to produce. Much ofwhat's left will be relatively more expensive and difficult to extract. The Big Easy is over.
PERILS OF CONVENTIONAL WISDOM The roots of the current energy crisis date back twenty years. The1979 Oil Shock unleashed a frenzy of petroleum exploration and in the early 1980s, 80,000 wells were spuddedeach year. As it turned out, we didn't find that much oil, but we did find a lot of gas. A glut was born. Between1983 and 1996, the real price of gas fell by 46%. Everyone grew complacent. Industry, government, andenvironmentalists alike proclaimed that gas would be cheap and superabundant far into the future. Whatever yourpolitics, this was comforting news. Want to run millions of cars with natural gas? No problem. Order 180,000 Megawatts of gas-fired power plants to runthe Information Economy? Makes perfect sense. As gas got cheaper and cheaper, frivolous uses joined essential ones. Snowmelt your driveway? Sure, whynot? Install radiant tubing under golf course greens? Go for it. Little by little, wishful thinking morphed into conventional wisdom just in time to getblindsided by a perfect storm.
THE PERFECT STORM The metaphor was coined by Matt Simmons, an investment banker to the energy services industry who writes World Oilmagazine's annual review of petroleum developments. Last year, as oil prices tripled and natural gas prices quadrupled, he advised the Bush campaign aboutour energy predicament. "An energy crisis is descending over the world," Simmons wrote. "The situation is grave. The world has not run out of oil andNorth America has not run out of natural gas. What we are short of is any way to grow our energy supply. North America has no excess natural gas capacity.What we do have is extremely aggressive decline rates, making it harder each year to keep current production from falling. A massive number of gas-firedpower plants have been ordered. But the gas to run them is simply not there."
CINDERELLA STORY Gas and oil are both hydrocarbons, and they are often found together in the same reservoir. But in the early years of the Oil Era,gas was considered the ugly stepchild of the petroleum family, a safety hazard with no market value, and drillers cursed when they found it. In many parts ofthe world gas is still worthless, you literally can't give it away. Here in North America, gas sold for 30¢ per thousand cubic feet as recently as 1974. At thatprice, a winter's heat for a Denver home would cost thirty bucks. But those days are history.
PROFANE BILLS In much of the U.S., the average home consumes its volume in methane each winter month. That much heat used to cost $80; this past winter, the cost nearly doubled. In December 2000, wholesale gas prices briefly touched $10 per thousand cubic-feet. In January 2001, prices averaged $8, and homeowners in Chicago, Boston, and Denver were hammered by $200 utility bills. But the shock to thenational billfold didn't end there. Farmland Industries shut down some of its fertilizer plants because using priceynatural gas to make cheap fertilizer didn't make sense. Higher gas prices helped to torpedo California's ill-fatedexperiment with electricity deregulation, driving its two largest utilities to the brink of bankruptcy. By spring 2001,wellhead gas prices had receded from their dizzying heights, but were still twice what they were twelve months earlier.
DRILLING WITH CHARLIE One reason gas prices have skyrocketed is that there are only 1,350 drilling rigssearching for gas in North America. It takes 10 men to run a rig, they rotate 12-hour shifts night and day, one week on,one week off. Visiting a drilling site is to witness a remarkable display of American guts, ingenuity, and know-how.But, when you've only got 1,350 drill bits trying to meet the energy appetites of 280,000,000 Americans….is it anysurprise the roughnecks are falling behind? During the last 15 years, while the rest of American prospered, thepetroleum industry got hammered by wild swings in oil prices. More than 600,000 people were laid off, and as aresult the oil patch lost a generation. Today the workforce is dominated by men in their fifties and kids in their teens.One driller named Charlie Brister, a thoughtful veteran who's been laid off four times, says this: "We live in the mostenergy intensive civilization the world has ever known, and yet the average American knows nothing about energy.But things may have to get a lot more critical before the public is ready to hear the truth. You piss everyone off if youtry to explain to a typical Republican that 'There's not enough oil in the U.S. for us to be self sufficient' or tell a typical environmentalist that 'Wind and solarcannot meet 100% of our energy needs.'"
THE DEPLETION TREADMILL In June 1999, a disturbing article was published in Oil & Gas Journal. Itdescribed how Texas, which produces one-third of the nation's gas, must drill 6,400 new wells each year to keepits production from plummeting. That's 17 wells each day. As recently as 1998, the state only needed to drill4,000 wells to keep annual production steady. The reason for the change? As drillers target ever-smaller pools,new wells experience steeper depletion rates. Indeed, a typical new well has an astounding first-year decline of56%, which is another way of saying it begins dying soon after it is born. No one likes talking about depletion; itis the crazy aunt in the attic, the emperor without clothes, the wolf at the door. But the truth is that drillers inTexas are chained to a treadmill, and they must run faster and faster each year to keep up.
CANADA TO THE RESCUE? The United States is the world's largest importer of natural gas. But unlike oil,which we buy from 25 nations, 99% of our gas is produced here in North America. Domestic supplies meet 85% ofour needs, the other 15% comes from Canada. Most Canadian gas is produced in Alberta, although significant newfields have been found near Nova Scotia. The Canadians have historically been eager to ship methane south, andtoday half the country's gas is exported to the States. But last winter, as Canadian gas bills doubled, a debate over thispractice began. Canada is, after all, a frigid country and some Canadians are beginning to suggest capping the amountof gas sent to the "damn Yankees" so that future generations will have adequate supplies. Gas fields in westernCanada are aging like those in Texas, and the Canadians are wrestling their own depletion demons, running their owntreadmill. It takes 20 new wells per day, nearly 7,500 per year, to keep Alberta's production from declining.
GAS ON ICE As traditional fields decline, Canadian and U.S. producers are dusting off plans to tap Arctic gas. There's lots of gas on Alaska's NorthSlope and at the Mackenzie River Delta. But to tap either field will require a feat of civil engineering, snaking 2,000 miles of steel pipe across tundra,permafrost, and muskeg, doable but not quick or cheap. Current estimates are that Arctic gas is at least 6 years and $8 billion away. And no miracle cure,either, since a five-foot pipe could provide only about 5% of our current consumption. Other supply options? The shallow Gulf of Mexico is in steepdecline, but the deepwater Gulf is producing increasing amounts. Coalbed methane from Wyoming and Colorado is now meeting 7% of the nation's needs.New England has begun to receive gas from Nova Scotia. The industry wants to drill in areas that are now off-limits, including offshore California, theeastern Gulf of Mexico, and parts of the Rockies. It is also possible to import liquefied natural gas, chilled to minus 260° F, on special tankers. The U.S.now gets about 1% of its gas this way, a percentage that should increase to 3% by 2010.
POWER SURGE The nation's long-standing glut of natural gas and electrical capacity, along with the world's spare oil capacity, vanished simultaneously in spring 2000. Prosperity and the Internet are partly responsible. Fueled by cheap energy, the U.S. economy grew 60% since 1986, an astounding 5% in 2000 alone. Gas consumption grew 36% over that period. But it was the demand for electricity-up 5.4% in 1998, an astounding rate for such a large economy- that has had the biggest impact on gas prices. To meet our growing electricity needs, utilities have ordered 180,000Megawatts of gas-fired power plants to be installed by 2005. It was a logical thing to do: gas is the cheapest, cleanestway to convert fossil fuel to electricity. But if ordering one gas turbine makes perfect sense, ordering 1,000 is a recipe fordisaster. No one in the utility industry asked the key question: can we produce enough gas to run all those plants? Manyexperts think the answer is no.
PIPELINES & CAVES During the summer, gas is pumped into underground caverns for use the next winter. This schedule is now being crimped bySunbelt air conditioners, whose demand for gas-fired electricity is soaring. Gas used to keep us warm; now we ask it to keep us cool, too. Since the storagesystem was never sized for the A/C load, we've depleted our storage cushion. In March 2001, gas-in-storage reached its lowest level in history. Pipelinesare another critical part of the gas puzzle. Without a pipeline, natural gas is worthless, a constraint first recognized by the Chinese. They were drilling forgas in 1000 A.D.-but their pipeline materials were limited to bamboo. American pipelines today could stretch to the Moon. Most date to post-World II,when Gulf Coast supplies were tied to markets in the Midwest and New England. Since pipelines are prone to corrosion, beer keg-sized diagnostic toolscalled "pigs" are pushed through the lines to search for weak spots, not always in time. In August, 2000, a pipeline exploded in New Mexico, killing 10people, and crimping gas deliveries to California. Many aging pipelines need to be rebuilt, replaced, or expanded to deliver more gas to urban areas, wherethe new fleet of gas-fired power plants will be moored. In December 2000, gas delivered to L.A. briefly fetched $69, equivalent to $400 for a barrel of oil.
A WICKED HANGOVER In hindsight, the 1990s were the Big Bonfire, an unprecedented energy binge. As natural gas and gasoline prices shrunk, new houses and cars grew gargantuan. Soccer moms bought SUVs and Americans consumed their body weight in natural gas and oil every five days. Happy Hour is now over, and we are nursing a wicked hangover. The road ahead is strewn with energy potholes and related economic hazards. For decades natural gas has been our most versatile fuel and obedient servant. Versatility is a virtue, but it is also a curse for it allows everyone to make methane plans without "checking the gas tank." According to the Energy Information Administration, by 2005 we may need 20% more natural gas than we use today; by 2015, 50% more. But U.S. production has flat-lined for fifteen years, and Canadais treading water, too. So where's the new gas going to come from?
TRILLION DOLLAR GAMBLE With no debate, and little consideration of the long-range implications, the nationhas embarked on a "dash for gas." This chart shows how future gas prices will be driven by skyrocketing demand forgas-fired electricity. To meet the electricity sector's gluttonous appetite-forecast to triple by 2015-we will need tobuild a pipeline to Alaska, double the number of drilling rigs, and open large swaths of federal land now off-limits todrilling. But even that may not be enough. In truth, the dash for gas may be the ultimate pipe dream, a dangerousdelusion, a risky chimera, an ill-considered "vision in search of reality." If it turns out that we can't find sufficient gasto run hundreds of new powerplants, then what? Pick from this list: build new coal or nuclear plants; get serious aboutrenewables, particularly wind power, now cheaper than gas; or invest real money in energy efficiency. Coal is ourmost abundant fossil fuel, but it also carries the specter of climate change; no nuclear plants have been ordered in 22years; renewables are increasingly cost-effective but intermittent. Efficiency is a proven winner, but it's not a "freelunch." All solutions require time and capital. During the interim, we may soon hit an "energy ceiling," beyond which consumption can not grow.
HOLD 'EM OR FOLD 'EM President Bush has been dealt a tough hand. Indeed, he has inherited the most severe and complicated energy challenge the nation has ever faced. The average American family will spend more than $3,000 on electricity, oil, and natural gas this year. The economy is going south. Wall Street is struggling. Blackouts threaten to become a way of life, and not solely on the Left Coast. Two-thirds of the nation's oil and almost half the nation's natural gas have been burned. The world is almost out of spare oil production capacity. The President's instincts are to find more energy wherever he can. He wants to play the "ANWR card," drill in the Arctic National Wildlife Refuge, which would have no effect on the nation's energy posture for at least five years. But if events haveconspired against Bush, they have also created an historic opening. The former oilman has a tremendous opportunity, perhaps even an obligation, to do whatno President has ever done: level with the American people about our energy challenges and, as important, our efficiency opportunities. Just as the ferventanti-communist, Richard Nixon, was the only American politician who dared make peace with Communist China, Bush's background enables him to speaktruth to power. This fireside chat is long overdue. "As a former oilman, I'd like to believe that we can drill our way out of the current crisis," the Presidentmight say. "But our oil and gas fields are aging, and no one can turn back the clock. Any attempt to solve the nation's energy problems by increasing energysupplies without reducing the growth in energy demand is doomed to failure. Yes, we need to drill more wells and tap new supplies, but we also mustbecome much more productive in our use of energy. Indeed, our prosperity depends on it. Tonight I am proposing an eight point, bipartisan plan to makeAmerica the most energy efficient country on Earth…" Farfetched? Perhaps. But even a great nation can deny reality only so long. If Bush doesn't ante up, his successor will.
-- posted by lcha
« Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 Next »
Please follow the guidelines set forth in the Suite101 Posting Etiquette when adding to the discussion.