Knowing what Chesapeake knows
Natural gas spot prices have been headed lower since July, and not even two hurricanes hitting hotbeds of production along the
At the New York Mercantile Exchange, the contract price for an October delivery of 1,000 cubic feet of natural gas fell to its lowest price in 2008 last week, closing at $7.248.
Meanwhile, natural gas in underground storage on Sept. 12 totaled more than 2.9 trillion cubic feet — 2.1 percent above the five-year average.
Federal officials said the hurricanes were not as disruptive to the market as they could have been because of mild weather across the
While federal official expect the nation’s natural gas consumption to increase by 2.7 percent in 2008 and by 2.2 percent in 2009, gas production is expected to climb by 7.8 percent in 2008 and by 3.8 percent in 2009.
By Jack Money, Business Writer
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Comments
Hey Joe.
I think you are making some valid points.
But while the oil and natural gas industry as a whole advocates offshore drilling, that’s really a topic that T. Boone Pickens and Aubrey McClendon have been quiet on.
Chesapeake, for example, has no off-shore drilling at all, and it would be a stretch for me to imagine it would engage in that type of future development, even with the opening of off-shore drilling on both coasts.
As for motives behind the Pickens Plan and CNG Now, you most definitely are right that these guys are pushing an agenda by advocating a fuel switch from gasoline to natural gas for our nation’s transportation segment.
You also are making a valid point when you say that McClendon is trying to manipulat the price of natural gas by cutting some of his company’s production and future drilling plans.
But I think McClendon is making those choices because the demand for the fuel is not yet there, and he doesn’t want to bankrupt his company.
And a lot of the natural gas Pickens wants to see used by vehicles already is being used to power our nation’s electrical plants. That’s why Pickens, in particular — who has some big wind projects under development — advocates using wind-generated power as a big source of electricity.
So I’m going to applaud what these guys are trying to do, even while acknowledging they are running businesses that would do well from the switch.
That’s because I think it is a good thing anytime we can reduce our dependence on foreign oil.
I feel that way because OPEC and other foreign oil producers already — very successfully — are manipulating prices in the oil, and subsequently, gasoline markets.
And like Pickens and the industry as a whole say — a lot of those folks don’t like us very much.
Thanks for reading!
Jack
You still have to give credence to the concerns of the Wilderness Society. Aubrey McClendon, along with Pickens plan, has been touting natural gas as a cheap alternative fuel to bridge the gap to wind energy and other forms of renewables.
The republicans, like Aubrey, cannot have their cake and eat it, too. They can’t on the one hand say we need more access to offshore drilling to lower energy costs..and on the other hand tell us they are cutting production because the market price is too low. CHK has a 10 year inventory of drilling sites, per their own financial statements.
If we go along with McClendon and Pickens to opt for CNG fuel for vehicles, is this what the consumer can expect? I’m concerned we will be be drawn into dependence on CNG only for the big producers to artificially manipulate markets by cutting production. This doesn’t give us confidence in the big natural gas producers!