Some Optimism About Natural Gas Prices
- April 19th, 2012
- Posted in Economics . Natural Gas
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I’ve written about the decadal low in natural gas prices in a previous post. Barclay’s came out with a report this week that rather optimistically predicts that natural as prices will rebound to $3.25/MMBtu by 2013. You can read the Barclays report here. The jist of the analysis seems to be that industry will finally make some progress in reducing production.

I think you’re being a little siislmptic when it comes to a couple facets of your argument. One As more of these deep water wells are drilled or oil sands plants are built, the technology will improve, and the costs will go down. These are expensive, long to develop, capital intensive plays with uncertain flow through rates and a host of other uncertain variables. There are all kinds of natural limits you can butt up against (water use if the oil sands significantly scales up, black swans when it comes to deep water drilling). All the technology in the world isn’t going to make bitumen anything less than 20-40% oil when it comes out of the ground. There are limits to natural capital that all of the tech in the world can’t solve whether it makes sense from a price perspective or not. I’m fairly indifferent to the price of oil. I’m more of a fan of the price going up because of the limits it puts on the depletion of natural capital but there are a lot of moving parts here. The price of oil will do its thing. I’m currently more worried about food price volatility/climate change related matters and its effect on politics around the world. If what happened in Moscow this summer happened in Chicago (and it will eventually) you’re going to be hearing a different tune from south of the border. TwoYou seem to have been sucked into this view that environmentalists are this homogenous block who all want electric cars and alternative fuel sources so we can continue to run this amazing and trouble free transportation system we have. I don’t think electric cars are worth the rare earths that you dig out of the ground to run them. Looking at it from a systems perspective, our road system is an investment in infrastructure that is simply unsustainable (damn that word). Two cars a household, the investment in public space for private property (parking), ever widening roads and the vehicles that fill them, this is not planning, it’s madness.