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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Tommaso who wrote (14769)11/11/2002 12:54:24 AM
From: energyplay  Read Replies (1) of 206093
 
Possible NG downsides -

I can see a few other low probability downssides for NG -

1) Government price controls. Price was controled and the past could happen. Richard Nixon, Republican president, implemented a wage and price freeze about a year afer the US closed the gold window. Probality maybe less than 2%. Most likely to happen after prices RISE.

2) Big discovery like Ladyfern. Hard to argue with this, since Ladyfern jsut happened - it's not 50 + years ago like East Texas. Offshore Nova Scotia may be the proximate threat - it's near consumers, may be really BIG. Mackenize River won't have a pipeline unitl 2008, earliest. Upstate New York area could be another discovery area which could be brought on quickly.

3) production improvements -
The other threats of rapidly increased production could be -Coal Bed Methane, which is under extensive development at this time, especailly in Wyoming. Multiple pipelines are being built to handle the gas, and more are planned.

Improvements to fracing the Barnett Shale. The recovery of gas from Barnett shale seems to improve about 10-20% a year. There could be a breakthrough that increases initial production rates maybe 2x. Since this would also change the economics of drilling, we would see much more drilling in the Barnett.

4) Really nasty recession/ depression - I give this maybe a 5% probability.

5) Really warm winter - Probably less taht 3% at this point.

Any comments on probablity of the above events would be appreciated.
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