Supply and demand sets somewhat the price of gas although this commodity and energy source is very regulated. A good discussion of this is in an article by the St. Louis Federal Reserve Board as presented here from 2006:
http://www.research.stlouisfed.org/publications/review/06/11/Kliesen.pdf
For a complete analysis of these prices to January, 2010 see this:
http://www.ieca-us.com/runningout.html
It appears from the new discovery of shale gas that reserves have doubled but costs to get the gas has also increased. We should then see an increasing price trend in the future for Natural Gas.
The price today as stated in the WSJ is approximately $4 per MM BTU
Monday, April 12, 2010
Price of Oil as compared to Costs
One source of energy of course is oil. Some say we have 50 to 100 years of reserve of this energy source. Here is what the pricing has done in the past almost 60 years. Price is not determined on cost - http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/oildisruptions.html
Checking out this web page shows that pricing depends on what happens in the OPEC countries and what they do.
The costs vary by regions of the world - the least expensive in the countries that have huge reservoirs. Costs can range from a few dollars to ten dollars per barrel in these countries. This would include exploration, drilling and processing costs. In other countries especially in the United States this cost is much higher - sometimes exceeding $50 per barrel.
The overall trend is for oil to become higher in price. As the price increases per barrel of oil more exploration and more reserves will become economically viable.
Checking out this web page shows that pricing depends on what happens in the OPEC countries and what they do.
The costs vary by regions of the world - the least expensive in the countries that have huge reservoirs. Costs can range from a few dollars to ten dollars per barrel in these countries. This would include exploration, drilling and processing costs. In other countries especially in the United States this cost is much higher - sometimes exceeding $50 per barrel.
The overall trend is for oil to become higher in price. As the price increases per barrel of oil more exploration and more reserves will become economically viable.
Thursday, April 8, 2010
Summary of the 2010 Energy Conference
Summary of the 2010 Energy Conference
EIA and Johns Hopkins
April 6 & 7, 2010, Washington, DC
The annual Energy Conference is usually just sponsored by EIA a branch of the Department of Energy. This year John Hopkins University School of Advanced International Studies (SAIS) jointly sponsored this conference along with the support of Exxon/Mobil.
The conference was well attended with over 800 participants. The conference was aptly named Short-Term Stresses, Long-Term Change.
There were many speakers addressing the many forms of energy production. It appeared to the writer that everyone was surprised by the recent technological development of shale containing natural gas and that new ways of fractionating this shale with water probably led to over a doubling of reserves in the United States. Because of this new fractionation technology many papers forecasted that natural gas would be utilized primarily for electricity production more and displacing coal and other forms of energy used for electricity production.
There was one whole session devoted to water, indicating that water is required to produce energy and that energy was needed to clean up the water. Some papers indicated that the water is used in the production of energy. This is not true. What happens is that the amount of water remains the same, it only changes form in temperature, contamination or state.
Although there is a perceived short term stress because of reliance on unstable countries for over 1/3 of our energy production along with the pollution that this energy production generates all the papers did not indicate that there would be much of a change in the next 10 to 15 years of our energy production mix. However many talks and papers indicated that there was a lot of government investment in new technology that may change this landscape. One speaker from an oil company stated that their planning horizon was not 20 years but 40 to 45 years. This is how long investment decisions done now will take to pay off in the future.
In future blogs several papers will be discussed and links to these papers will be available
EIA and Johns Hopkins
April 6 & 7, 2010, Washington, DC
The annual Energy Conference is usually just sponsored by EIA a branch of the Department of Energy. This year John Hopkins University School of Advanced International Studies (SAIS) jointly sponsored this conference along with the support of Exxon/Mobil.
The conference was well attended with over 800 participants. The conference was aptly named Short-Term Stresses, Long-Term Change.
There were many speakers addressing the many forms of energy production. It appeared to the writer that everyone was surprised by the recent technological development of shale containing natural gas and that new ways of fractionating this shale with water probably led to over a doubling of reserves in the United States. Because of this new fractionation technology many papers forecasted that natural gas would be utilized primarily for electricity production more and displacing coal and other forms of energy used for electricity production.
There was one whole session devoted to water, indicating that water is required to produce energy and that energy was needed to clean up the water. Some papers indicated that the water is used in the production of energy. This is not true. What happens is that the amount of water remains the same, it only changes form in temperature, contamination or state.
Although there is a perceived short term stress because of reliance on unstable countries for over 1/3 of our energy production along with the pollution that this energy production generates all the papers did not indicate that there would be much of a change in the next 10 to 15 years of our energy production mix. However many talks and papers indicated that there was a lot of government investment in new technology that may change this landscape. One speaker from an oil company stated that their planning horizon was not 20 years but 40 to 45 years. This is how long investment decisions done now will take to pay off in the future.
In future blogs several papers will be discussed and links to these papers will be available
Friday, April 2, 2010
Energy Storage - Batteries
For different sources of energy some storage might be needed. One of our advisors - Dr. Gareth Hatch is well versed in this area.
You can also get more information by clicking here - www.newsletters@infowebcom.com
You can also get more information by clicking here - www.newsletters@infowebcom.com
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