<oil is invincible and the talk of alternatives is a waste of time>
I beg to disagree
Everbody seems to forget that <U.S. {is} Awash in Natural Gas>
<...it’s abundantly clear that the U.S. has enormous quantities of natural gas -- more gas than was ever thought possible. And that abundance of gas has resulted in huge production increases.....
The revolution in the shale gas sector led William Coates, the president of oilfield giant Schlumberger’s North American operations, to deliver one of Thursday’s most memorable quotes: “We missed the shale play by such a wide mark, I’m just wondering what we’re wrong about this time.” Coates said that no one at Schlumberger, or anywhere else for that matter, could have predicted the huge effect that horizontal drilling and multi-stage fracking would have on the industry. And it’s those breakthroughs that have radically reshaped the natural gas industry, from one where companies drilled a few wells in a given location in an effort to recover relatively small pockets of gas, to a situation where “resource plays” and the “gas factory” have become accepted industry lingo. In fact, Calgary-based EnCana, the biggest gas producer in North America, has begun referring to their shale strategy in the Haynesville as the "Gas Factory."
H.G. “Buddy” Kleemeier, the president and CEO of Tulsa-based Kaiser-Francis Oil Company, who appeared on the same panel as Coates, said that when he started in the oil and gas industry 43 years ago, the reserve-to-production ratio in the gas business was about 9 years. And just a few years ago, the industry still had an r/p ratio of about 9 years. Today, said Kleemeier, “The best hope for this business is that we can now realistically talk about a 100-year supply of gas right here at home.”.........
The diffusion of information technology in the US pipeline network – and the trading opportunities that come with it – could also affect how the owners of natural gas wells manage their production. Kaminski foresees a time when owners of long-lived gas wells (like those in shale plays) could “become an extension of storage.” In other words, depending on market prices, owners could shut in their shale gas wells for a period of time and then release the gas when prices are more favorable.
While Kaminski’s ideas provide food for thought, the overriding concern among most of the attendees was about prices. The consensus from Thursday’s discussions: prices at $4 per thousand cubic feet were simply not sustainable. At that level, only a few players in a few basins – the Haynesville Shale and Marcellus Shale were the ones most frequently cited – will be able to make money. The sustainable price level for US gas, most agreed, was $6 to $8 per mcf.>
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