The picture is changing rapidly:
<<http://readersupportednews.org/news-sec ... ent-in-oil
Economics of new energy investment
Re: Economics of new energy investment
Each time I see crap like this I want to scream: "Wind and Solar produce electricity. Very little oil is used to produce electricity."
In the U.S. coal and natural gas fired power plants produce most of our electricity. Oil is used to produce less than 0.5% of our electricity and it is in areas off the grid anyway.
I talked to two of our members last week that work for a big insurance firm that insure all types of energy projects. They said wind powered facilities are in big trouble when the subsidies expire. Wind and Solar cannot compete with natural gas unless gas goes over $8/mcf.
In the U.S. coal and natural gas fired power plants produce most of our electricity. Oil is used to produce less than 0.5% of our electricity and it is in areas off the grid anyway.
I talked to two of our members last week that work for a big insurance firm that insure all types of energy projects. They said wind powered facilities are in big trouble when the subsidies expire. Wind and Solar cannot compete with natural gas unless gas goes over $8/mcf.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Economics of new energy investment
<<Wind and Solar cannot compete with natural gas unless gas goes over $8/mcf.>>
There'll come a day when gas will be $8/mcf. Back 15 years or so crude was under $20.
Curious that you rarely hear people talk the future economics of crude as materials
feedstuff.
There'll come a day when gas will be $8/mcf. Back 15 years or so crude was under $20.
Curious that you rarely hear people talk the future economics of crude as materials
feedstuff.
Re: Economics of new energy investment
I doubt we see natural gas over $8.00 in the next three years and maybe much longer. One of the big "takeaways" I got from EnerCom is that there is a lot of natural gas out there. For example, take a look at the map of the Eagle Ford Shale area. The southern 40% of the Eagle Ford is dry gas and a lot of it, maybe a couple hundred trillion cubic feet that becomes very profitable at $8. The Marcellus/Utica may contain over 100 year supply all by itself.
All of the shale plays contain a lot of gas. Without the gas, the oil would not flow through the tight shale.
Wind and Solar make sense in certain areas, but they will not be able to compete with coal and natural gas for as long as I live. I recommend being very careful investing in Wind or Solar. They just cannot compete without government subsidies and our government is broke.
All Wind and Solar installations require a gas fired power plant back up. The wind can stop blowing and cloudy days kill solar.
You make a very good point that there a lot of products that can only be made from crude oil / black oil. For example, they need a long hydrocarbon molecule to make tires. The very light condensate and NGLs coming from the shale plays is not a good substitute. It is a concern.
All of the shale plays contain a lot of gas. Without the gas, the oil would not flow through the tight shale.
Wind and Solar make sense in certain areas, but they will not be able to compete with coal and natural gas for as long as I live. I recommend being very careful investing in Wind or Solar. They just cannot compete without government subsidies and our government is broke.
All Wind and Solar installations require a gas fired power plant back up. The wind can stop blowing and cloudy days kill solar.
You make a very good point that there a lot of products that can only be made from crude oil / black oil. For example, they need a long hydrocarbon molecule to make tires. The very light condensate and NGLs coming from the shale plays is not a good substitute. It is a concern.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group