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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Dennis Roth who wrote (177493)3/29/2013 9:32:08 AM
From: MIRU1 Recommendation  Read Replies (1) of 206159
 
High natural gas prices seriously undermine the official story that the US has a century of cheap natural gas

Delete the word "cheap" and all is well. I think we have been asking " what price is high enough to encourage profitable drilling for natural gas?" I think this may be the wrong question. Maybe we should be asking " what price is high enough to get companies to stop drilling for $90 oil and do more drilling for natural gas?" My personal guess is that it is not the same number. Maybe the first number is $5 and the second is $7. Shale oil and shale gas are both way more expensive to drill than conventional,( with some obvious exceptions like Davy Jones)

The historical demand-based ratio of theoretical 6 to 1 (in practice averaging about 8 to 1) for oil to NG was invalidated by events and after the dust settles may be replaced by a drilling cost-based ratio maybe.
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