Russia loses its chance to capture the EU gas market

[Tom Nolan + 2,443]

15 hours ago, Tomasz said:

The Yandex search engine is also much better than the Google engine  for searching the Russian net. And for viewing data uncensored by Google you should use Duck Duck Go.

SEARCH ENGINES

I agree.  I often use Yandex, DuckDuckGo, Qwant, Swisscows, even Dogpile.   Google is very compromised about promoting a narrative agenda.  Surprisingly Bing will sometimes give good results.

[Tomasz + 1,608]

It is simply in the interest of Poland and Ukraine that the gas continues to flow through their territory. Only through dozens of decisions, including the Second Revolution in Ukraine and subsequent moves by the utterly nationalist government in Poland, both these countries give the West the impression of unstable and uncertain countries as transit countries.

In this way, by imposing similar penalties, the Polish government fits all the more into the Russian narrative that transit through Poland and Ukraine is not a safe transit in the future, and since transit through Ukraine is aso the most expensive  option, the more the West needs Nord Stream I, Nord Stream II and South Stream.

And with every single such absurd decision of an administrative penalty of USD 7 billion and the Polish government's disregard for the European Union, Poland confirms the West's conviction.

Not that they trust Putin at all , but that they also  trust Poland less and less, and Ukraine is considered an extremely unstable country.

In addition, it is an open secret that the Ukrainian transmission infrastructure, which has not been renovated for many years, is in a deteriorating condition from year to year, causing concern both in the gas market and in the West as to its real stable transmission capacity, because it is certainly not able to transfer so much. gas than at the times of the Soviet Union.

Hence the decision to support alternative gas pipelines and hence the support for it in the West.

Simply put, politicians both in Poland and in Ukraine should wonder if they themselves are not giving Russia the best rational arguments that the construction of all these pipes is absolutely necessary.

Edited October 7, 2020 by Tomasz

[ronwagn + 6,290]

19 hours ago, Tomasz said:

https://www.kommersant.ru/doc/4520059

 

How will Russia grow its economy without the old high prices for its oil and natural gas? LNG will be putting a cap on its price demands worldwide. Piped natural gas is not out of the question either. Then there is the growing renewable production. China is building coal plants in other countries. Some are building nuclear plants. It does not look good for Russia IMHO. 

 

[dukeNukem + 80]

3 hours ago, ronwagn said:

How will Russia grow its economy without the old high prices for its oil and natural gas? LNG will be putting a cap on its price demands worldwide. Piped natural gas is not out of the question either. Then there is the growing renewable production. China is building coal plants in other countries. Some are building nuclear plants. It does not look good for Russia IMHO. 

 

Russia is OK with 50-60 bucks oil. No doubt, that oil prices will return to these levels soon...Regarding China coal plants - there is a policy of clear sky, they are increasing gas consumption as well. China is the fastest growing nat gas market in the world. By the end of this decade Russia will sell approx 100bln m3 per year of nat gas to China (half of Russian export to Europe of pre-covid levels). LNG simply could not compete with Russian gas in Europe in terms of price - let say 200$ per 1000m3 for US LNG is barely breakeven, but Gazprom makes a good profit...This is just simple fact

[ronwagn + 6,290]

57 minutes ago, dukeNukem said:

Russia is OK with 50-60 bucks oil. No doubt, that oil prices will return to these levels soon...Regarding China coal plants - there is a policy of clear sky, they are increasing gas consumption as well. China is the fastest growing nat gas market in the world. By the end of this decade Russia will sell approx 100bln m3 per year of nat gas to China (half of Russian export to Europe of pre-covid levels). LNG simply could not compete with Russian gas in Europe in terms of price - let say 200$ per 1000m3 for US LNG is barely breakeven, but Gazprom makes a good profit...This is just simple fact

Not a simple fact that Russia will ever get back to those prices however. That is a major problem for Russia. 

[BenFranklin'sSpectacles + 762]

2 hours ago, dukeNukem said:

Russia is OK with 50-60 bucks oil. No doubt, that oil prices will return to these levels soon...Regarding China coal plants - there is a policy of clear sky, they are increasing gas consumption as well. China is the fastest growing nat gas market in the world. By the end of this decade Russia will sell approx 100bln m3 per year of nat gas to China (half of Russian export to Europe of pre-covid levels). LNG simply could not compete with Russian gas in Europe in terms of price - let say 200$ per 1000m3 for US LNG is barely breakeven, but Gazprom makes a good profit...This is just simple fact

Point of clarification: modern coal plants with pollution controls emit almost nothing but CO2. I.e. they are compatible with "clear skies".

China's coal pollution problems stemmed from three issues:
1) No pollution control equipment on coal power plants
2) Placing coal power plants near cities (they're now placed far enough away that any pollution is moot)
3) Coal heating. This is huge as small coal-fired boilers pollute disproportionately.

IIRC, #3 is being replaced with natural gas, which explains the increased demand for natural gas.  However, *pause for emphasis* China has also developed a nuclear reactor for district heating. These pool-type reactors are exceptionally cheap and inherently safe, avoiding the issues of Western reactor designs. China has also connected one of their conventional nuclear reactors to district heating and will increase this practice.  Together, these developments place limits on China's long-term natural gas demand. It's difficult to justify imported natural gas when domestic, nuclear heat is cheaper.

 

Links:

1) Chinese pool-type district heating reactor:
https://www.world-nuclear-news.org/Articles/CNNC-completes-design-of-district-heating-reactor

2) China uses conventional reactor for district/process heating:
https://www.world-nuclear-news.org/Articles/Chinese-nuclear-heating-project-starts-up

3) NEI article on China's nuclear district heating efforts:
https://www.neimagazine.com/news/newschinese-nuclear-companies-look-to-district-heating-6055928

Edited October 8, 2020 by BenFranklin'sSpectacles
Added links.

[dukeNukem + 80]

52 minutes ago, BenFranklin'sSpectacles said:

Point of clarification: modern coal plants with pollution controls emit almost nothing but CO2. I.e. they are compatible with "clear skies".

China's coal pollution problems stemmed from three issues:
1) No pollution control equipment on coal power plants
2) Placing coal power plants near cities (they're now placed far enough away that any pollution is moot)
3) Coal heating. This is huge as small coal-fired boilers pollute disproportionately.

IIRC, #3 is being replaced with natural gas, which explains the increased demand for natural gas.  However, *pause for emphasis* China has also developed a nuclear reactor for district heating. These pool-type reactors are exceptionally cheap and inherently safe, avoiding the issues of Western reactor designs. China has also connected one of their conventional nuclear reactors to district heating and will increase this practice.  Together, these developments place limits on China's long-term natural gas demand. It's difficult to justify imported natural gas when domestic, nuclear heat is cheaper.

 

Links:

1) Chinese pool-type district heating reactor:
https://www.world-nuclear-news.org/Articles/CNNC-completes-design-of-district-heating-reactor

2) China uses conventional reactor for district/process heating:
https://www.world-nuclear-news.org/Articles/Chinese-nuclear-heating-project-starts-up

3) NEI article on China's nuclear district heating efforts:
https://www.neimagazine.com/news/newschinese-nuclear-companies-look-to-district-heating-6055928

Thanks for this clarification. However nat gas is still emits approx 50% less CO2 than coal(depends which type of coal). So far nat gas is the cleanest fossil fuel and gas power generation more efficient compare to coal. I have read somewhere than start up time for gas power generation is much faster, than coal power generation. This is quite important matter when using it as a backup for intermittent Solar/Wind. 

[dukeNukem + 80]

2 hours ago, ronwagn said:

Not a simple fact that Russia will ever get back to those prices however. That is a major problem for Russia. 

Do you mean nat gas prices Ron? of course we don't know future, it is always uncertainty,  but I think there is pretty high chance European gas prices will come back to these levels in 1-2 years time. Moreover there is relatively not much contracted US LNG coming to Europe, most of it cheap spot LNG due to global oversupply. Main focus for US LNG is SE Asia...much more perspective gas market there compare to Europe

[Tom Nolan + 2,443]

It should be noted that coal is the major culprit responsible for the mercury in fish.  Mercury is often found in coal, and when burned it enters the atmosphere and thus into the waterways.

[ronwagn + 6,290]

1 hour ago, dukeNukem said:

Do you mean nat gas prices Ron? of course we don't know future, it is always uncertainty,  but I think there is pretty high chance European gas prices will come back to these levels in 1-2 years time. Moreover there is relatively not much contracted US LNG coming to Europe, most of it cheap spot LNG due to global oversupply. Main focus for US LNG is SE Asia...much more perspective gas market there compare to Europe

I am thinking LNG or possibly piped natural gas that will find its way from many sources that will be competing for any buyer they can find. I think this will keep a strong lid on prices of Russian gas. 

[ronwagn + 6,290]

1 hour ago, Tom Nolan said:

It should be noted that coal is the major culprit responsible for the mercury in fish.  Mercury is often found in coal, and when burned it enters the atmosphere and thus into the waterways.

Thanks for reminding me, I had forgotten about that. Even albacore tuna is now not to be eaten too often. Definitely not large catfish in a coal cooling lake near me. 

[ronwagn + 6,290]

2 hours ago, dukeNukem said:

Thanks for this clarification. However nat gas is still emits approx 50% less CO2 than coal(depends which type of coal). So far nat gas is the cleanest fossil fuel and gas power generation more efficient compare to coal. I have read somewhere than start up time for gas power generation is much faster, than coal power generation. This is quite important matter when using it as a backup for intermittent Solar/Wind. 

China has some of the filthiest water resources in the entire world. Filled with all sorts of toxic chemicals and miscellaneous waste. Coal plant waste is a huge problem and often ends up in creeks, rivers, lakes, and groundwater. There is plenty of proof of China being a land of filthy water and air. 

Whatever you say about clean coal is refuted by the filthy air in Chinese cities. They have made little progress. 

http://factsanddetails.com/china/cat10/sub66/item391.html

https://www.weforum.org/agenda/2020/07/pollution-co2-economy-china/

[Tomasz + 1,608]

Personally, in my opinion, some radically low oil and natural  gas prices are not to be expected in the future.

NG is the fuel of the future and the demand for it should grow steadily and rapidly in next few decades.

I also understand absolutely the reasons why the US wants Russia to sell less gas to Europe. Only if it is to be based on business conditions and not a dictate from the Americans, LNG from the USA requires final price of at least $ 6-6.5 per mbbt as a profitability price.

Likewise, American shale oil deposits single most important engine of growth in last decade  needs price of $ 50-60 for business to thrive and continue growth.

In Poland, there is a very strong belief that the Americans and Saudis will bankrupt the Russians - only the hard facts are that the Saudis need a much higher price to balance their budget and in the last 5 years they have probably spent 1/3 of their currency reserves.US needs oil price at least in low 50's or even 60 $ for global domination.

However, when it comes to COVID, the situation is currently not very good, and I am personally worried about my older parents.

But everyone should really look at it from a broader global perspective - the entire global pharmaceutical industry, the world's strongest medical minds in the last year, do nothing else but try to develop a vaccine or drug for coronavirus.

There is no way that rather sooner than later someone will not win the race for a vaccine or a drug. Maybe, unfortunately, Trump will not be saved because there will be no vaccine until the election and the situation will not radically improve.

Well, the real scale of research that I check everyday on the Internet is unprecedented, the entire medical world has challenged the coronavirus.

Although it is also true that HIV is also a coronavirus and the vaccine was announced in the mid-1980s. Unfortunately, the HIV virus mutates quite strongly and there is no vaccine so far. However, it was solved with a little more and more effective drugs - now, in highly developed countries, a person infected with HIV can survive in relative health for about 40 years from the infection if he takes care of himself and takes drugs.

Edited October 8, 2020 by Tomasz

[Tomasz + 1,608]

One thing I still do not understand, because many people say that LNG prices from America are supposedly unknown.

This is so strange to me because its really hard for me to imagine a greater level of transparency of these prices than the official EIA data presented below.

If someone really does not know how much LNG from the US costs, then with such a degree of open access to information that is up to date after the quarter, he probably simply does not want to find out out of laziness.

Each single delivery is described in price. Sometimes you have to add the cost of gasification at these lower values, and sometimes only transport and regasification - according to the Oxford Institute for Energy Studies, about $ 1.2 per mbbt and 0.4-0.7 for regasification. Additional gasification cost vary from 2,5 to 3,5 $ per mbbtu. On planned new US teminals for Permian basin its forecasted to be only 2,25 $ but for todays its from 2,5-3,5.

1 $ per mbbtu according to EIA official guide from June 2020 its 36,62 $ per 1.000 m3. This is a little controversial value on different sites you can find a value from 35,1 to 36,9. It depends on quality of NG and data information year because it can be changed year to year. But officially for 2020 according to EIA its 36,62 $ per 1.000 cubic meters. More details 

https://www.eia.gov/tools/faqs/faq.php?id=45&t=8

https://www.eia.gov/energyexplained/units-and-calculators/

Americans really don't hide anything from the world about the price of their LNG, everything is in black and white how much each delivery of LNG and pipeline NG to Mexico costs

https://www.eia.gov/dnav/ng/NG_MOVE_EXPC_S1_M.htm

On the other hand, Gazprom officially reports the average monthly, quarterly and yearly gas export price to Europe. Of course its the average price so depending on the signed contract prices for different countries in Europe may of course differ.

But really, with this level of transparency especially on US EIA side, there aren't many supposed secrets about how much anything costs.

Prices can not be given in more detail than Americans tell us , since every single transport of LNG is described in price

There is of course magic term of so called "sunk costs". But I really dont uderstand such sunk costs. Maybe in short term but in long-term perspective you have to take under consideration full cost of LNG.

Edited October 8, 2020 by Tomasz

[BenFranklin'sSpectacles + 762]

13 hours ago, dukeNukem said:

Thanks for this clarification. However nat gas is still emits approx 50% less CO2 than coal(depends which type of coal). So far nat gas is the cleanest fossil fuel and gas power generation more efficient compare to coal. I have read somewhere than start up time for gas power generation is much faster, than coal power generation. This is quite important matter when using it as a backup for intermittent Solar/Wind. 

CO2 and intermittency are issues in the West, whose populations oppose coal and nuclear - mostly because they're sufficiently wealthy to indulge in virtue signaling. CO2 and intermittency are not issues in China or India, who don't have time or money for nonsense and, therefore, eagerly embrace coal and nuclear.

It's worth noting that even Japan, when faced with a lack of nuclear and high LNG costs, is building new coal power plants.

[BenFranklin'sSpectacles + 762]

12 hours ago, Tom Nolan said:

It should be noted that coal is the major culprit responsible for the mercury in fish.  Mercury is often found in coal, and when burned it enters the atmosphere and thus into the waterways.

You're not wrong, but you're also being misleading by selectively presenting facts.

The MATS, published in 2012, required all coal power plants in the US to either install pollution equipment or shut down. This was a response to power plants that had been grandfathered into the system without pollution controls. Today, there isn't a single coal-fired power plant in the US that emits significant quantities of mercury - or any toxic element, for that matter.

How do I know this? I asked a coal power plant engineer who is personally responsible for his plant's emissions. Whereas he refuses to use gas-fired appliances and will only use his fireplace for special occasions on account of home air pollution, he has no concerns about coal power plant pollution.

I would highly recommend discussing subjects with knowledgeable experts prior to forming an opinion.

[BenFranklin'sSpectacles + 762]

6 hours ago, Tomasz said:

If someone really does not know how much LNG from the US costs, then with such a degree of open access to information that is up to date after the quarter, he probably simply does not want to find out out of laziness.

You will find appalling depths of laziness and willful ignorance in the US. This is a natural consequence of having too many natural resources, too much international influence, and too much deficit spending for too long. I.e. it's a result of people being allowed to survive without any effort. It will end shortly as we're effectively bankrupt.

That aside, it's clear that the selling price of US LNG is transparent. However, I wonder if the real concern is production cost, which determines who can stay in business at a given selling price. My understanding is that US companies carefully guard this information; am I wrong?

Edited October 8, 2020 by BenFranklin'sSpectacles

[Coffeeguyzz + 454]

Mr. Tomasz, Mr. BenF, et alia,

I thank you all for your input in this most informative of threads.

Mr. Tomasz, your providing the link to the March, 2019 report from the OIES  "Outlook for Competitive LNG Supply" is very much appreciated. 

For anyone seriously wanting to learn of these matters, there is no better source than that ~40 page pdf.

The comparative charts on pages #s 21 and 22 are worth the download by themselves.

 

While the extreme micro granularity of the analysis may  be too much for many, (shipping cost from Sakhalin to Japan ... 37 to 41 cents/mmbtu ... Qatar to Pakistan/Western India  ... $.3438, double that to Bangladesh/Eastern India), one sure cannot claim ignorance after studying this paper).

Ultra condensed synopsis may be that - on a purely economic/market/geological/geographic basis, different suppliers are advantaged for select customers ... for now.

The 'for now' context stems from the dizzyingly rapid pace of change spanning topics such as new engines in LNG ships, expansion capacity of the Panama Canal, internal conflicts (political and actual physical) in current and potentially future suppliers, on and on.

The fact that the rig count in Vaca Muerta dropped from 43 to 2 in one year (and may, sadly for the Argentinians, not rebound for the forseeable future), is but one example of these effects playing out in the real world.

 

Mr. BenF, I will follow up shortly on your crucially  important question surrounding cost of supply.

Edited October 8, 2020 by Coffeeguyzz

[Coffeeguyzz + 454]

Mr. BenF,

Regarding production costs - specifically for American LNG - 2 sub components (at least)   may need to be considered.

One, the cost of the product - including transportation - at the LNG plant.

Two, the capital cost along with the actual operational costs to liquefy.

Other factors take into account the potential  equity position of downstream buyers, the structure of the commercial contracting, aka tolling fees versus simply providing end product in toto to the buyer, amongst other considerations. Really tough to get apples to apples comparisons.

However, that above referenced OIES report has an excellent cost of upstream gas supply (pages #s 5 through 8 for 5 different global regions and also the capital costs for LNG plants on pages #s 8 through 15).

 

Of particular importance (to me, anyway) is the comments on page # 9 regarding new US GOM LNG plant construction costs.

Employing modularization techniques, incremental buildout, newer processes, etc.,  new US plants could have capital costs in the ~$550/$730 tonnes per year (tpa) range versus the ~$950 tpa historical average.

Big variations throughout the world with several of the Australian operations highly vulnerable due to nose bleed level of capex. (Cost of Coal Seam Gas supply may also hinder the 3 Curtis Island operations).

 

The upstream boys in the Appalachian Basin are heading towards ~$2/mmbtu viable production shortly.

While a few top producering wells  are providing 10 Billion cubic feet first year (or close), it is common to have 5 Bcf first year  for a standard 10/12 thousand foot lateral. Costs - usually depicted in xx$/lateral foot - are approaching $700/foot with a few wells at the $600/foot range. A routine 10,000' well, costing 7 1/2 million, producing 5 Bcf fetching $2/mmbtu would have gross revenue of $10 million, first year.

 The transition to gas fueled electric frac'ing and the anticipated new hardware from Liberty/Schlumberger by, possibly, next spring should drop well costs even lower.

With 2 new, large takeaway pipes from the Permian coming online next year, large amounts of cheap gas should be available at Da Guf for processing.

 

One big, largely unidentified factor is the displacement of existing and future competitors to natgas, LNG - specifically - and US LNG being ground zero (along with Russian and Qatari) as this energy universe sorts itself out.

HELE coal, SMR nuclear,  Hydrogen, heck, even Cold Fusion could upend every single word above of this comment.

[ronwagn + 6,290]

17 hours ago, Tomasz said:

Personally, in my opinion, some radically low oil and natural  gas prices are not to be expected in the future.

NG is the fuel of the future and the demand for it should grow steadily and rapidly in next few decades.

I also understand absolutely the reasons why the US wants Russia to sell less gas to Europe. Only if it is to be based on business conditions and not a dictate from the Americans, LNG from the USA requires final price of at least $ 6-6.5 per mbbt as a profitability price.

Likewise, American shale oil deposits single most important engine of growth in last decade  needs price of $ 50-60 for business to thrive and continue growth.

In Poland, there is a very strong belief that the Americans and Saudis will bankrupt the Russians - only the hard facts are that the Saudis need a much higher price to balance their budget and in the last 5 years they have probably spent 1/3 of their currency reserves.US needs oil price at least in low 50's or even 60 $ for global domination.

However, when it comes to COVID, the situation is currently not very good, and I am personally worried about my older parents.

But everyone should really look at it from a broader global perspective - the entire global pharmaceutical industry, the world's strongest medical minds in the last year, do nothing else but try to develop a vaccine or drug for coronavirus.

There is no way that rather sooner than later someone will not win the race for a vaccine or a drug. Maybe, unfortunately, Trump will not be saved because there will be no vaccine until the election and the situation will not radically improve.

Well, the real scale of research that I check everyday on the Internet is unprecedented, the entire medical world has challenged the coronavirus.

Although it is also true that HIV is also a coronavirus and the vaccine was announced in the mid-1980s. Unfortunately, the HIV virus mutates quite strongly and there is no vaccine so far. However, it was solved with a little more and more effective drugs - now, in highly developed countries, a person infected with HIV can survive in relative health for about 40 years from the infection if he takes care of himself and takes drugs.

Cancer has probably had the most attention of any disease in modern medical history but it has a variety of manifestations and may not be considered one disease. That is over my head. There was polio, but that was before our current state of science. HIV got lots of attention and research. 

COVID is already defeated in that the fatality rate is now similar to the flu. (influenza). Many people, in their prime, have died of influenza. COVID is a little more dangerous for old folks, but I imagine the flu is also. Medicine now has many tools in its toolbox.

I really feel that the Swedes had the best approach with minimal plandemic type fear mongering and more common sense. My biggest fear now is that the rural areas will take awhile to build up herd immunity. 

The Latest News and Info. on COVID 19

https://docs.google.com/document/d/1MXY8T0j7k0oUBsHW4BfjJM__DRIyzqrDf_FSlV4hHpw/edit

[ronwagn + 6,290]

21 hours ago, BenFranklin'sSpectacles said:

Point of clarification: modern coal plants with pollution controls emit almost nothing but CO2. I.e. they are compatible with "clear skies".

China's coal pollution problems stemmed from three issues:
1) No pollution control equipment on coal power plants
2) Placing coal power plants near cities (they're now placed far enough away that any pollution is moot)
3) Coal heating. This is huge as small coal-fired boilers pollute disproportionately.

IIRC, #3 is being replaced with natural gas, which explains the increased demand for natural gas.  However, *pause for emphasis* China has also developed a nuclear reactor for district heating. These pool-type reactors are exceptionally cheap and inherently safe, avoiding the issues of Western reactor designs. China has also connected one of their conventional nuclear reactors to district heating and will increase this practice.  Together, these developments place limits on China's long-term natural gas demand. It's difficult to justify imported natural gas when domestic, nuclear heat is cheaper.

 

Links:

1) Chinese pool-type district heating reactor:
https://www.world-nuclear-news.org/Articles/CNNC-completes-design-of-district-heating-reactor

2) China uses conventional reactor for district/process heating:
https://www.world-nuclear-news.org/Articles/Chinese-nuclear-heating-project-starts-up

3) NEI article on China's nuclear district heating efforts:
https://www.neimagazine.com/news/newschinese-nuclear-companies-look-to-district-heating-6055928

Cogeneration should be used whenever feasible. Thanks for bringing it up.

[Dan Warnick + 6,100]

12 hours ago, BenFranklin'sSpectacles said:

I would highly recommend discussing subjects with knowledgeable experts prior to forming an opinion.

You radical!  Next you'll be recommending the use of facts in discussions.   

[ronwagn + 6,290]

10 hours ago, Coffeeguyzz said:

Mr. BenF,

Regarding production costs - specifically for American LNG - 2 sub components (at least)   may need to be considered.

One, the cost of the product - including transportation - at the LNG plant.

Two, the capital cost along with the actual operational costs to liquefy.

Other factors take into account the potential  equity position of downstream buyers, the structure of the commercial contracting, aka tolling fees versus simply providing end product in toto to the buyer, amongst other considerations. Really tough to get apples to apples comparisons.

However, that above referenced OIES report has an excellent cost of upstream gas supply (pages #s 5 through 8 for 5 different global regions and also the capital costs for LNG plants on pages #s 8 through 15).

 

Of particular importance (to me, anyway) is the comments on page # 9 regarding new US GOM LNG plant construction costs.

Employing modularization techniques, incremental buildout, newer processes, etc.,  new US plants could have capital costs in the ~$550/$730 tonnes per year (tpa) range versus the ~$950 tpa historical average.

Big variations throughout the world with several of the Australian operations highly vulnerable due to nose bleed level of capex. (Cost of Coal Seam Gas supply may also hinder the 3 Curtis Island operations).

 

The upstream boys in the Appalachian Basin are heading towards ~$2/mmbtu viable production shortly.

While a few top producering wells  are providing 10 Billion cubic feet first year (or close), it is common to have 5 Bcf first year  for a standard 10/12 thousand foot lateral. Costs - usually depicted in xx$/lateral foot - are approaching $700/foot with a few wells at the $600/foot range. A routine 10,000' well, costing 7 1/2 million, producing 5 Bcf fetching $2/mmbtu would have gross revenue of $10 million, first year.

 The transition to gas fueled electric frac'ing and the anticipated new hardware from Liberty/Schlumberger by, possibly, next spring should drop well costs even lower.

With 2 new, large takeaway pipes from the Permian coming online next year, large amounts of cheap gas should be available at Da Guf for processing.

 

One big, largely unidentified factor is the displacement of existing and future competitors to natgas, LNG - specifically - and US LNG being ground zero (along with Russian and Qatari) as this energy universe sorts itself out.

HELE coal, SMR nuclear,  Hydrogen, heck, even Cold Fusion could upend every single word above of this comment.

I consider natural gas practically free, clean, and available (or could be made available at low cost) almost anywhere with a few thousand people. Beating its price is no easy feat when you figure out the true cost of renewables or anything else. 

[ronwagn + 6,290]

14 hours ago, BenFranklin'sSpectacles said:

You're not wrong, but you're also being misleading by selectively presenting facts.

The MATS, published in 2012, required all coal power plants in the US to either install pollution equipment or shut down. This was a response to power plants that had been grandfathered into the system without pollution controls. Today, there isn't a single coal-fired power plant in the US that emits significant quantities of mercury - or any toxic element, for that matter.

How do I know this? I asked a coal power plant engineer who is personally responsible for his plant's emissions. Whereas he refuses to use gas-fired appliances and will only use his fireplace for special occasions on account of home air pollution, he has no concerns about coal power plant pollution.

I would highly recommend discussing subjects with knowledgeable experts prior to forming an opinion.

We use a small unvented natural gas fireplace beneath a cracked window in our living room. We have a three bedroom house with a large multipurpose room and a living room. The little fireplace completely heats the whole house (which is well insulated and has dual paned windows). We have central heat and air, but only use the air, unless we are gone in the winter. It works great for us and we prefer the ambience of a fire. Our cost is very small for the natural gas, the "delivery" of the piped gas is often higher than the gas itself. Chefs work over large natural gas stoves all day long and I have never heard of one with any related health complaints. I have done extensive research about natural gas. I have CO2 monitors and pulse Ox testers which are always normal and have never had an alarm. 

[KeyboardWarrior + 527]

16 hours ago, BenFranklin'sSpectacles said:

CO2 and intermittency are issues in the West, whose populations oppose coal and nuclear - mostly because they're sufficiently wealthy to indulge in virtue signaling. CO2 and intermittency are not issues in China or India, who don't have time or money for nonsense and, therefore, eagerly embrace coal and nuclear.

It's worth noting that even Japan, when faced with a lack of nuclear and high LNG costs, is building new coal power plants.

I’m wondering if supercritical coal plants will put coal on a rebound. Coal is still cheaper than NG per mmbtu so if plant efficiencies are leveled with CCG I’d bet coal is here to stay for a while. 

On the other hand, coal is about as unpopular as nuclear so I’m not sure how this will balance. What do you think?