Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (92991)	11/2/2007 10:13:38 AM
From: Tommaso	Read Replies (3) \| Respond to of 206325

Well, Dennis, that is the sort of thing that people say when the BTU equivalence gets way out of line like that. And then after a while it corrects. It has actually even gone beyond that briefly during a couple of NG price spikes, when gas hit $10 and oil was still below $40 a barrel. There still seem to be about 8 million households in the U. S. that burn heating oil, and many of those are in the colder parts of the country: nj.gov Some of those will convert to gas. Anyone who can convert and does not do so is not making a good decision. Fertilizer and other gas-consuming industries may reopen plants. I have always thought it weird to burn something purely for heat which can also power a diesel engine, but it continues. Converting automobiles or (more commonly) buses to natural gas is possible but not much practiced yet.

To: Dennis Roth who wrote (92991)	11/2/2007 10:27:57 AM
From: Tommaso	Respond to of 206325

See Figure 4 (page 19) of that link: nj.gov In the last 10 years, when heating oil prices have risen very steeply, they have been followed by natural gas prices. Of course, as I said to start with, the divergence on a BTU basis can be very large and can last quite a while. But it does tend to revert.

To: Dennis Roth who wrote (92991)	11/2/2007 7:52:24 PM
From: quehubo	Respond to of 206325

The electric market is a bit more complex than that. The amount of coal vs ng competition nationally on an annual basis I would estimate as quite small. Most coal is baseload and incremental power is quite cheap when at partial load. In the Winter some incremental load can be met by ng or oil, or when ng is curtailed by oil only. burner tip prices for ng will move to heating oil prices. There are many areas that will burn residual in the Winter if it is cheaper than NG. In any event with $7 burner tip NG even the most efficient ng plant still needs >$50 MWHR plus start up costs. Coal plants are generally much cheaper generators. The btu parity argument for ng is meaningless in the present market environment. Once ng becomes scarce the volume that can move between HO and NG will restore this metric. NG's largest alternative competitor is heating oil. Many generators and large consumers switch.