Natural Gas, A Real "Alternative" Fuel For Vehicles

Natural gas, because of its clean burning characteristics, has long been used to power vehicles such as fork lift trucks inside warehouses.  Consider how clean burning natural gas is, many of us cook our food over natural gas stoves in our enclosed kitchens.  Now that we have an abundance of gas, thanks to the combined technologies of horizontal drilling and hydraulic fracturing, why not use this gas to power our cars and trucks, in addition to generating electricity and heating our homes as is already being done.  It makes sense to me and many others.

Now this gas is being used to power vehicles in Louisiana, by EnCana, ironically, a Canadian company.  They produce a lot of gas in Louisiana from horizontal wells drilled in the Haynesville Shale.  (Some of which I proudly helped steer while drilling.)  The following article comes from "The Shreveport Times" and shows and describes what EnCana has going.  This was not done because of Federal government subsidies, or even encouragement for that matter, just intelligent free market enterprise.  Do you hear that Mr. Obama?  This is economic activity, job creation, and wealth building you can count on.  Fire all your current advisers, they don't have any idea what they are doing.
Peter

source: http://www.shreveporttimes.com/article/20120225/NEWS01/202250325/DeSoto-LNG-station-first-Louisiana

DeSoto LNG station first in Louisiana

NEAR FRIERSON — A liquefied natural gas fueling station formally opened Friday by EnCana Natural Gas Inc. at the Relay Station holds the distinction of many "firsts." It's the first:

• LNG station open in Louisiana.
• Public LNG station in the U.S.
• Location for Heckmann Water Resources to use LNG trucks.

And when the Relay Station in a couple of months opens its compressed natural gas pumps, the facility will be the first in the state to offer four fueling options: LNG, compressed natural gas, or CNG, gasoline and diesel.

(continued)

Peak Oil? What Peak Oil? When?

Basically I think the following ten points about oil and gas production are correct.  The relatively new process of combining horizontal drilling to provide much greater access to oil and gas reservoirs, combined with multi-stage hydraulic fracturing to enhance flow rates is, as they say, a dramatic "game changer" in America's quest for energy independence.

It is not just the technology that makes this so exciting.  From this geologists perspective, what is really significant is this production is coming from organic-rich shales, arguably the most abundant sedimentary rock type on Earth.  Throw out all the old rules of exploration requiring source rock, maturation, migration, reservoir, structural trapping mechanism, and sealing rocks.  It is much simpler now.  What "Peak Oil"?  It's a brand new ball game.  Re-set the scoreboard, go long the drillers and oil field service companies.  Gentlemen (and women), start your engines.
Peter


10 Points To Consider When Examining The U.S. Quest For Energy Independence

http://seekingalpha.com/article/384031-10-points-to-consider-when-examining-the-u-s-quest-for-energy-independence?source=email_macro_view&ifp=0

We are currently at a time when domestic gasoline and diesel prices follow global fundamentals rather than domestic supply / demand dynamics. We are also at a juncture where natural gas is set to either remain a domestic fuel or become a global piece of the puzzle through LNG exports. At this time of uncertainty, it is good to take a step back and review the facts and forecasts to consider whether the U.S. can become energy dependent, and even if it does, will prices still be dictated on a global scale?

1) Oil production in North Dakota, has surpassed that of Opec member Ecuador, and is set to become the second largest oil producing state in the U.S. this year, surpassing Alaska and California.

2) EIA states that U.S. oil imports in 2005 = 60% of total consumption, U.S. oil imports in 2010 = 49%, U.S. oil imports In 2035 = 36%.

(Click to expand)

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3) Bentek states over the next five years the U.S. will see 75 oil pipeline expansions, 25 railroad expansions, and 7 refinery expansions

4) The new kids on the block in terms of shale plays over the next five years taking over from Bakken, Marcellus, and Eagle Ford include Utica in Ohio, Niobrara in Colorado, and Monterey in California.  (Don't forget the father of them all, the Barnett Shale under me here in the Fort Worth Basin.  Peter)

5) EIA slashed the estimate for Marcellus gas shale reserves in its latest 2012 outlook, from 410 Tcf to 141 Tcf.

6) This led to a huge write-down in total U.S. gas shale reserves from 827 Tcf in last year's report to 482 Tcf in the 2012 report

7) According to Reuters / EIA, China is one of the largest holders of gas shale reserves at 1,275 Tcf



8) According to research by IHS CERA, 600k jobs have been created by shale in the U.S., with that set to reach 870k in 2015. This number is set to nearly double to 1.6mln by 2035.  (Someone explain this to the Obama Administration quick.....please.)

9) EIA is calling for shale to make up 49% of natural gas supply by 2035. IHS CERA is calling for this number to be more like 60%

10) EIA expects U.S. oil production to increase by 1.2mbd from 5.5mbpd in 2010 to 6.7mbpd in 2020. Bentek is somewhat more bullish, calling for an additional 2.2mbpd by 2016.

These 10 facts and stats all bode well for the U.S. (...even no.7, as multinational companies pump money into the U.S. / Canada to cut their teeth on joint ventures, before taking what they have learned and applying it globally). As for the downward revisions of estimates of natural gas reserves, they will continue to be revised up and down, but nevertheless new discoveries will be made.

It is impossible to predict whether prices will be dictated by global fundamentals in the future; all that can be said is that the U.S. is becoming increasing less reliant on other countries, and more reliant on itself. That has to be a good thing.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 

About the author: Energy Burrito

Matt Smith spent his twenties working in investment management in London, England, before swapping his bowler hat for a banjo and moving to Louisville, KY, and Summit Energy. Matt is a Commodity Analyst at Summit, and produces a number of pieces of research across a number of global commodities.... More

• Company: Summit Energy
• Blog: Energy Burrito

Compressed Natural Gas: Fuel Of The Future For Autos?

The following article gives a brief summary of what could be done with natural gas. The cost of these home fueling stations called "The Phill" is high today, but as with most things, if they were made in quantity the price would come down.

As I see it, one of the beauties of this system is that many, if not most people already have natural gas being piped into their homes for heating and cooking. It is usually very safe, and all the infrastructure to supply this gas is in place. Can anyone think of a better way of lessening our dependence on foreign oil?

As I've shown before on this blog, natural gas is the cleanest of hydrocarbon-based fuels, and as we're seeing with these Shale Gas plays around the United States, the gas is there, in the ground, ready to be produced. Someone with some deep pockets ought to buy the company making "The Phill". Boone Pickens has apparently tried, and maybe he will still succeed.
Peter




Maker of Natural Gas Fueling Systems Tanks
By Clifford Krauss (source)




FuelMaker.com The Phill, a residential compressed natural gas fueling system, never really caught on.

Natural gas is cheap and plentiful, and last summer the future for vehicles fueled by compressed natural gas — or CNG — looked bright. But then crude oil and gasoline prices tanked. Now, the future of CNG cars looks a lot less certain.

It hardly got any attention, but late last week FuelMaker, the Honda-owned maker of natural gas fueling systems — including a residential model called the “Phill” — filed for bankruptcy.
Clean Energy Fuels, a natural gas distributor owned by T. Boone Pickens, had been trying to buy the company from Honda for $17 million, but the two sides could never make a deal. The Phill, which has been on the market about six years, never caught on. Perhaps that is because it takes four hours to fill an empty tank with the device, and it costs up to $6,000.

An even bigger problem for FuelMaker might have been the fact that very few drivers own CNG vehicles. Most are fleet cars, buses and trucks owned by companies and public transportation agencies. And, of course, few gasoline filling stations offer compressed natural gas.

At the moment, the Honda Civic GX is the only CNG car on the market, and it is available at only a select number of dealerships in a few states including California and New York.