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Guest Post: A Surprising New Twist in the U.S. Natural Gas Market

Tyler Durden's picture





 

Submitted by Keith Schaefer via OilPrice.com,

The U.S. natural gas market may be on the verge of a big swing.

And it’s not about the talk of the town, Liquid Natural Gas (LNG).

It's about an unexpected source of natural gas demand:

Mexico

Mexican imports of U.S. gas have skyrocketed 92% since 2008. And with export capacity projected to grow to over 7 billion cubic feet per day (Bcf/d), Mexico could start taking 10% of U.S. production—in a very short time frame, with very low capital costs compared to the LNG boom unfolding.

There is a lot less risk, and a lot less cost in getting huge natural gas exports to Mexico, compared to LNG—and the volumes may be enough to move margins in the North American market.

At least six new pipeline projects are now on the books, aimed at sending gas southward.

Today, I’ll explain what’s happening now, and what potential impact this extra demand could have on natural gas prices.

To find out, we take a look below at exactly what’s happening in Mexico, what’s getting built, and who’s positioned to take advantage.

The Not-So-Slow Death of a Gas Producer

Mexico used to have a pretty decent gas industry.

Between 1990 and 2008, the nation’s nat gas production grew steadily, nearly doubling over the two decades.

The bulk of this output comes from national oil and gas company Petroleos Mexicanos, or Pemex. With strong natural gas prices between 2003 and 2008, Pemex stepped up its drilling, growing gas production from 4.5 Bcf/d to nearly 7.5 Bcf/d.

But with the collapse in gas prices in early 2008, that changed. Pemex stopped a lot of its gas drilling activity. Instead, the Mexican government made a strategic decision to meet domestic demand by importing now-cheap gas.

Since that time, Pemex’s gas production has fallen steadily, by about 15% from 2008 levels.

The lack of investment in the gas sector has also had a big effect on Mexican reserves. In the late 1990s, the nation had more than 60 Tcf of proven reserves. Today, gas in the ground has fallen off a cliff, with only about 17 Tcf proven reserves remaining.

At the same time as production has been falling, Mexico’s gas demand is ramping up.

Gas consumption across the country has risen 160% since 1990 to 2.36 Tcf per year. Since 2007—while domestic production has been nose-diving—Mexico’s gas use has jumped 16.7%.

Much of the rise in demand has been driven by fuel-switching. In 2000, only 20% of Mexican power generation was fueled by natural gas. But by 2007, nat gas use increased to account for 50% of power output. Largely displacing oil-fired generation.

On the back of this rising demand, Mexico’s natural gas supply-demand balance is—for the first-time ever—near deficit. Current gas usage amounts to nearly 6.5 Bcf/d, and Pemex is now producing less than that.

The Switch is On

Faced with a supply short-fall, Mexican nat gas imports have been on a tear.

Between 2003 and 2007, Mexico was bringing in between 350 and 400 Bcf a year of imported gas. But since gas got cheap in 2008, imports have jumped 92%. Total imports hit 767 Bcf in 2012.

Overall, imported gas now accounts for about 30% of total Mexican supply. The majority coming through pipeline feed from the U.S. Only about 20% is supplied via LNG.

Mexico is now importing about 2.1 Bcf/d. Or about 3% of total U.S. gas production. Numbers that are starting to get significant.

The really interesting part of this story is the growth potential.

The switch from oil- to gas-fired power generation is continuing across Mexico. Just this month, gas infrastructure providers GDF SUEZ Mexico and GE Energy Financial Services announced they will extend their Mayakan pipeline into the Yucatan Peninsula—underpinned by a 300 MMcf/d gas-supply contract with Mexican electric utility CFE, who are switching power plants in the Yucatan to gas generation.

A slate of other gas-fired projects are on the books, particularly in northern Mexico. Overall, the nation is looking to add 28 gigawatts of new generating capacity. With all this activity, the national Secretaría de Energía forecasts that Mexican gas demand will grow 3.3% annually through 2016.

The Northern Natural Gas Neighbour

For gas-hungry Mexico, the collapse of U.S. natural gas prices couldn’t have been better-timed.

Cheap nat gas from abundant shale production in the southern states has provided a ready source of imports. What’s more, a good deal of pipeline infrastructure is already in place. This pipe used to bring Mexican gas to U.S. consumers—but increasingly flows have been reversed to feed Mexico’s demand.
Mexican purchases of U.S. gas have been driven by pricing. Between 2000 and 2004—with low nat gas prices prevailing—Mexico’s imports from the U.S. jumped 10-fold, from 4 Bcf per month to 40 Bcf per month.

Import growth slacked off with the high prices of 2005 through 2008. But as of 2010, imports are on the rise again. In March 2010, Mexico imported 20.7 Bcf. By October 2012, imports hit a record 60.5 Bcf.

The numbers imply that Mexico’s peak demand for U.S. gas is currently something like 1.95 Bcf/d. And there’s room for that to grow. Total U.S. export capacity to Mexico was estimated at 3.8 Bcf/d in 2012.

The really interesting thing is that some of the biggest players in U.S. gas transmission are betting Mexican demand will rise well beyond current export capacity.

Major pipeline operator El Paso Natural Gas recently commissioned an expansion of export capacity at its Wilcox Lateral transmission site at the eastern Arizona/Mexico border. The upgrade added 0.185 Bcf/d of gas throughput.

At least five other similar projects are on the books across Arizona and Texas. All told, these could add up to 3.3 Bcf/d of additional gas export capacity to Mexico. Taking total capacity to more than 7 Bcf/d.

What Does This Mean for Natural Gas Prices?

The question then becomes: what would increased exports mean for gas prices?

At current peak demand levels of 1.95 Bcf/d, Mexico is taking about 3% of total marketed U.S. gas (about 69 Bcf/d as of March 2013).

There is some evidence that this demand is already pushing up prices.

In 2012, Mexican buyers of U.S. gas paid an average of $2.94/Mcf. Considerably higher than the price at many trading hubs near in the southern U.S.

Mexican export prices were 7.3% higher than the average Henry Hub price for 2012. The premium to U.S. hubs near the Mexican border was even larger. Exported gas prices were 8.9% higher than 2012 average prices at Houston Ship Channel, Texas. And 10.5% higher than the El Paso Permian hub on the Texas/New Mexico border.

It thus appears that Mexican consumers are willing to pay more than U.S. buyers to secure supply—the marginal price is higher in that region.

And that’s at today’s export levels. If existing export capacity of 3.8 Bcf/d is filled as Mexico takes more gas, we’re talking about 5.5% of U.S. production heading south. And if currently-slated expansion projects come online on top of that, we could see over 10% of current U.S. supply going to Mexico. Then the marginal buyer could impact prices outside that region.

All in, Mexico could create an extra 5 bcf/d demand in the coming three years. As context, an extra 5 bcf/d demand from the power sector in 2012 sent natural gas prices doubling in the US from $2-$4/mcf in one year.

This story was written by Dave Forest, contributing editor to Oil & Gas Investments Bulletin

 


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Thu, 07/04/2013 - 21:07 | Link to Comment FieldingMellish
FieldingMellish's picture

Thanks to the miracle of modern finance, commodities are now completely unnecessary. Everything can be cured by continuously supplying the world with more reserve currency which magically only ever goes up in value. Carry on.

Thu, 07/04/2013 - 23:45 | Link to Comment WayBehind
WayBehind's picture

As they do in California, they will sell it back to us at even higher prices.

Fri, 07/05/2013 - 03:37 | Link to Comment LetThemEatRand
LetThemEatRand's picture

And thanks to the government (backed by the US military) Skilling is out in a few years.  And Corzine is free.  And Goldman Sachs' executives are richer.  Happy Fucking Independence Day.

Fri, 07/05/2013 - 07:11 | Link to Comment Bearhug Bernanke
Bearhug Bernanke's picture

Yeah, but at least we nailed Martha Stewart for insider trading! That'll show 'em (who's above the law and who isn't)!

Thu, 07/04/2013 - 21:17 | Link to Comment Handful of Dust
Handful of Dust's picture

Wasn't UNG over $100/share at gas' peak?

Thu, 07/04/2013 - 21:38 | Link to Comment El Oregonian
El Oregonian's picture

All the gas our politicians are burping out? Priceless...

Thu, 07/04/2013 - 22:25 | Link to Comment mofreedom
mofreedom's picture

the mexicans get our nat gas at market and we get their pinto bean farters and have to pay for all their shit at jacked up gub prices...

Thu, 07/04/2013 - 23:08 | Link to Comment mofreedom
mofreedom's picture

fine, they want our gas they take all the illegal aliens back, period.

Thu, 07/04/2013 - 23:27 | Link to Comment merizobeach
merizobeach's picture

Good luck affording fruits and vegetables without Mexicans in the fields harvesting them.  Good luck affording dinner at a restaurant without Mexicans in the kitchen.  Good luck affording your landscaping without Mexicans bundled up in the blasting summer heat.  Etc.  Get the point, you racist cock?

Thu, 07/04/2013 - 23:35 | Link to Comment mofreedom
mofreedom's picture

seasonal laborers can stay when needed...my kids can bus your dishes...i do all my own labor...you cock sucker.

Fri, 07/05/2013 - 01:13 | Link to Comment MisterMousePotato
MisterMousePotato's picture

@ merizobeach

This carnard? Again? Really?

It's probably been about 15 years now, but a real study was done concerning field labor costs as a percentage of the cost of produce by (I think it was at USC, but wherever it was, it was no hotbed of conservatism, that I do recall).

Field labor, it turns out, is about 15% of the cost of your head of lettuce. And field laborers are not paid as little as what most people seem to think. In fact, from personal experience in the orange groves of Florida several decades ago, I know for a fact that it can actually pay pretty damn well if one is willing to work, if not all that hard, at least pretty hard and pretty diligently for more hours than, oh, say, your average government employee puts in.

Accordingly, one could double the pay of field labor to $20-30 an hour, and your head of lettuce would go up about fifteen cents.

In fact, the study went on to conclude that, before we would all be subjected to the dreaded Five Dollar A Head lettuce, field labor wages would have to rise to $500 an hour or thereabouts (literally).

In other words, it's pretty damn obvious that there is some room here to increase wages, here in America, for Americans, without making lettuce or strawberries unaffordable.

For that matter, someone point out to me why it would be horrible to allow field labor wages to rise. To $20 an hour or $30 or whatever? All of a sudden, there'd be a glut of good paying jobs here in the Central Valley of California. That's bad? Well, sure. It'll mean that your socks or your lettuce are going to cost ten or twenty cents more. So what? At least compared to the pathologies associated with illegal immigration? Or taxpayers picking up the tab for making that labor life sustaining?

Well, Americans are lazy and etc. Mexicans work hard. Right?

About ten years ago (right around the time of George Bush's amnesty push), there was an article in The Wall Street Journal, I think it was, that went into some detail about a [nursery in California, I think it was] where, every April, a slew of Mexicans arrived (legally) to work until November or thereabouts. They lived in barracks type accomodations provided by the company and were paid $12 an hour.

Now, I'd be the first to admit that that doesn't sound particularly appealing. (Perhaps I'd feel differently if I or my family were starving, but we're not.)

However, in the article, they interviewed a few of the Mexican field hands, and one of them was a little surprised, saying, "Are you kidding? This is great. I can make more money here in a day than I can make in a week back home [(in Mexico)]."

See what the problem is? We pay Americans $12 an hour, but we pay the Mexicans - what? - $80 an hour?

For $80 an hour, I'll live in a barracks and pick strawberries like a motherfucker. All day long.

And for that kinda dough, I guarantee you that I would have no problem filling the bus with enthusiastic and grateful workers no matter where I went ... the parking lot of Beverly Hills High School or the EBT line on Michigan Avenue in Detroit.

In other words, it's not just that we pay Mexicans more than we pay Americans, we pay them so much more that they are incentivized to work hard.

If you really think Mexicans work harder than Americans (well, *certain* Americans, anyway) in any sort of abstract sense, well, first off compare and contrast the two countries. Too, I'd bet my life that 'an American' is no more inclined to sit in the shade and drink cervasas than a Mexican. Considering the word "siesta," and its origins, one might even wonder if Mexicans might even be more predisposed thus.

Fri, 07/05/2013 - 01:34 | Link to Comment Freddie
Freddie's picture

+100
Thank you.

Fri, 07/05/2013 - 03:15 | Link to Comment Simplifiedfrisbee
Simplifiedfrisbee's picture

"Many people get degrees and educate themselves straight into stupidity." It is a fact that none of us are excluded from error. Good that we all agree. Now, regarding this article, for one to conclude that these "barracks" are actually named labor housing or labor camps, one would have to experience California. So experience it for yourself, by taking a trip to these seasonal labor locations so to understand how "truthful" certain parts of the referenced article were. Furthermore, these well furnished and well maintained camps far exceed the living standards of those who inhabit them seasonally because of American housing standards and the inferior Mexican housing standards. Mexico is extremely rich in natural resources and has some of the most fertile land in the entire world, but lacks in so many other regards. Huge lacking. Cmon, China is competing with Mexico in cheap labor wars. So it is no surprise that the laborer was extremely enthused of working the vines seasonally while having an air conditioner and newer accommodations. That worker poses no threat, financially, to the "true" American worker. Heck, all the ranchers I have ever met welcome hard working folks. Problem is, they can not find them "sons of bitches" around as easily any more. According to them they have "gotten fat off of mom's tities." "They ain't worth a shit but to ask for money and hang out with their friends." Race matters diddly squat. It is the output they look for. More output, more harvest, more money. Regarding the hourly wages garnered, the "working effort" in many work areas have dropped significantly. We have gotten lazier as Americans. Admit to it, so to possibly change it! I'm behind a computer as you are. I have seen it first hand! Most work forces today have routine zombie environments that facilitate more of the workers lacking than talent. Most of us are over priviladged, wining people who exclude our culpability. Easily we point the finger however. Our work force is mentally inferior to withstand pruning a vineyard, pruning an Orange orchard or picking pomegranates. In my opinion, today's generation can not psychologically cope being with their own thoughts while attending a living organism because of the desolation that technology has brought to our culture. The ego is far too entitled and it translates today. Americans are awesome. Mexicans are awesome. Zimbabweans are awesome. Even South Africans can ride along. I simply can not allow such ignorance to manifest itself because of the economic implications regarding time and output.

Fri, 07/05/2013 - 06:39 | Link to Comment sherryw
sherryw's picture

Paragraphing makes it more readable.

Fri, 07/05/2013 - 08:57 | Link to Comment Bobbyrib
Bobbyrib's picture

What bullshit. If the 1% can pay someone $12 an hour, they will not pay an American $20 to do the same job. Those ranchers are full of shit.

Fri, 07/05/2013 - 01:29 | Link to Comment Freddie
Freddie's picture

LOL! You idiot. That is the John McCain pro-amnesty speech about $10 lettuce and other BS. Pushed by big business whore like McDonalds, Big Ag, Yum (Taco Bell dog food house).

Hire American kids and other people. Maybe pay them .50 cents more an hour and you might get better American workers.

Fri, 07/05/2013 - 08:37 | Link to Comment Doowleb
Doowleb's picture

What race are Mexicans again?

In Canada we send them back home after the harvest.

Thu, 07/04/2013 - 23:31 | Link to Comment mofreedom
mofreedom's picture

what about illegal don't you understand.

the current illegal doesn't want to be legal and have to pay taxes.

the current illegal doesn't want more illegals to come in and further depress wages.

go to a naturalization ceremony, you won't see one person there from mexico.

 

Fri, 07/05/2013 - 03:08 | Link to Comment MisterMousePotato
MisterMousePotato's picture

My curiousity piqued by this comment, I went and looked up the official statistics and figures.

And, you know what?

mofreedom is right. 2009 - 2011 (latest figures I could find) showed naturalizations were 15%, 10%, and 13% for Mexicans.

Fri, 07/05/2013 - 03:19 | Link to Comment Simplifiedfrisbee
Simplifiedfrisbee's picture

The ego will be your demise. Refrain from being guided by such thoughts. Far more worthy it is to look up and pray.

Thu, 07/04/2013 - 21:19 | Link to Comment espirit
espirit's picture

Nat gas used to be the ace-in-the-hole for a post peak oil future, but...

since we're going to ship it all southward and beyond to economies that have transitioned to it's effective utilization, we get what we get when all the fossils run out.

No future planning = no future.

Thu, 07/04/2013 - 21:56 | Link to Comment ISEEIT
ISEEIT's picture

My name is Eyore?

Evil, forwardist... 'thinking?' = Their version of the future.

Not mine.

Peak oil is shit.

Mankind's excuse won't be that easy.

The wall isn't ability, the 'wall' is fiction.

We need energy.

They need us not to have it.

Hence the 'transparency' of this regime.....

LMFAO!

If it's this obvious today?

WTF?

Next thing ya 'know' Captain Kirk will be in your face saying "wake-up"...

Spock is getting ready to explain this shit!

LOL.

Thu, 07/04/2013 - 22:02 | Link to Comment CPL
CPL's picture

<fingers snapping as applause>

That cat sure ain't square.

Thu, 07/04/2013 - 22:47 | Link to Comment BigJim
BigJim's picture

Man's got some serious shit, knowimsayin?

Thu, 07/04/2013 - 21:23 | Link to Comment adr
adr's picture

Another reason to add massive export tariffs and fuck over the garbage country sending an invasion army to tale over America.

I get to pay more to heat my home so some fucking Mexican drug lord can have power for his operation.

The most likely case is probably related to the auto manufacturers and tech companies setting up shop in Mexico. They need a lot of power and infrastructure.

Thu, 07/04/2013 - 21:37 | Link to Comment tip e. canoe
tip e. canoe's picture

solution : ween your home off natgas ASAP.

Thu, 07/04/2013 - 22:19 | Link to Comment tip e. canoe
tip e. canoe's picture

keep junkin bitchez

you know i'm right

Fri, 07/05/2013 - 09:12 | Link to Comment marathonman
marathonman's picture

Mexicans became drug lords because we idiots believed that the War on Drugs was a good idea.  It's prohibition economics all over.  Want to kill off the Mexican drug lords?  Quit the War on Drugs!  Watch the price drop and all those drug lords business implode.  You might have a few more crack heads, but at least they won't have to knock over your house or car-jack you to afford their habit.

Thu, 07/04/2013 - 21:25 | Link to Comment AGuy
AGuy's picture

"Nat gas used to be the ace-in-the-hole for a post peak oil future, but..."

It never was, NatGas is Local in the sense its difficuilt to ship oversea (ie LNG). NatGat prices are likely to rise as drilling for NatGas is now none existant and Shale gas well have a very short life of about 18 months. With Obama and the EPA forcing the closure of at least 15 GW of Coal fired power plants by 2015 its very likely that NatGas prices will double, triple or quadruple in the next five years.

 

 

Thu, 07/04/2013 - 21:29 | Link to Comment FieldingMellish
FieldingMellish's picture

Thankfully, energy is not considered a "core" part of CPI. Even if it was, we could always hedonically substitute it out for iPads.

Thu, 07/04/2013 - 21:52 | Link to Comment Poor Grogman
Poor Grogman's picture

Now you are catching on.

Stop worrying, and start borrowing,* fiat money for everyone at a super low introductory rate of .002%

Would you like a lolly little girl?

*my own work!

Fri, 07/05/2013 - 00:32 | Link to Comment LongBallsShortBrains
LongBallsShortBrains's picture

I'd like my lolly licked, little girl

Fri, 07/05/2013 - 01:23 | Link to Comment cpzimmon
cpzimmon's picture

I knew somebody would say it.

Thu, 07/04/2013 - 22:50 | Link to Comment Jim in MN
Jim in MN's picture

You just use the app with a video of a little blue flame, and like cook and heat in the winter with it.  iEnergy!

Fri, 07/05/2013 - 06:36 | Link to Comment sherryw
sherryw's picture

I was in a restaurant not of my choosing last week and on all four sides of a post in the middle were four large video screens of a fire burning! True! I walked close by it but there was no warmth.........

Thu, 07/04/2013 - 22:27 | Link to Comment nflux
nflux's picture

I believe that 18 months is the point where the average production is 50% of the orginial. with around 8% declines annually after that. Total productive life of a well is around 7-8 years on average.

Fri, 07/05/2013 - 09:15 | Link to Comment AGuy
AGuy's picture

"I believe that 18 months is the point where the average production is 50% of the orginial."

Nope, after about a year production declines to about 50% after 18 months production drops by 80% to 95%. They can refrack the well to stimulate production but is still less than 50% of the original production rate. Fracking is about 90% hype and marketing and about 10% of real production. FWIW: Fracking is literally squeezing oil and gas from a stone.

Here is one article that I found about depletion rate I found with a quick google search

http://www.huffingtonpost.com/anne-butterfield/colorados-elegant-solutio...

" the depletion rate on fracking wells is 63-85 percent in the first year, according to Dave Hughes of the Geological Survey of Canada."

Fri, 07/05/2013 - 10:50 | Link to Comment WallowaMountainMan
WallowaMountainMan's picture

true cost of fracking can be measured by comparing the amount of energy it takes to recover from sea water the amount of water lost to gain an equivalent amount of energy from fracking.

 

Thu, 07/04/2013 - 22:43 | Link to Comment firstdivision
firstdivision's picture

You do realize that Obama only said new regulations are needed as a way to boost donations from energy companies to the democratic party. In other news, the neighbor to the north has wised up on which team will win http://mobile.bloomberg.com/news/2013-07-04/toronto-reviews-bid-to-becom...

Fri, 07/05/2013 - 01:18 | Link to Comment MisterMousePotato
MisterMousePotato's picture

Democrat Party, not "democratic." Big difference. Common mistake.

Fri, 07/05/2013 - 01:29 | Link to Comment Bloodstock
Bloodstock's picture

Demon-rat party. They are demon rats!

Fri, 07/05/2013 - 07:48 | Link to Comment granolageek
granolageek's picture

It's not Obama, it's Adam Smith.

Combined cycle plants, that weren't perfected till the 90s are just as efficient as coal, and a whole lot cheaper. Unless coal is predictably a lot cheaper than gas, which it has not been, also since the 90s, utility capex will be on gas. 

We're 20 years into a 40 year depreciation cycle. No wonder coal is butt-hurt.

Fri, 07/05/2013 - 11:18 | Link to Comment AGuy
AGuy's picture

NatGas is too important to use for electricity production. NatGas is the only economical resource for many petro chemicals, such as fertializer, plastics and industrial chemicals (Nitric Acid, etc). Nat gas is also very useful for commericial heating especially in big cities.

 

 

Thu, 07/04/2013 - 21:31 | Link to Comment samsara
samsara's picture

That's's what happens when your petroleum production goes into terminal decline. Like the US, Like the UK, et al.

Mexico ( which had the 3rd largest oil we'll in the world. Cantarell) went into decline,

How ironic, weren't we importing like 15% of our Nat Gas From Canada(which was 50% of their production?

Fri, 07/05/2013 - 01:04 | Link to Comment MikeMcGspot
MikeMcGspot's picture

It does not matter that wells go into decline, there is an infinate number of new ones to replace the old. Ray Kurizwiel says pretty soon energy won't matter, moores law will take over. the law of entrophy will be broken in the trans human age.

We will all be safe.

/Sarc

Thu, 07/04/2013 - 21:33 | Link to Comment Seasmoke
Seasmoke's picture

I switched from Oil to NG to heat my home 6 years ago. Fucking Mexico better not mess it up.

Thu, 07/04/2013 - 21:33 | Link to Comment Mr. Hudson
Mr. Hudson's picture

: "Mexicans used to have a pretty decent gas"

It's because they used to soak their beans in water overnight before cooking them.

Thu, 07/04/2013 - 22:52 | Link to Comment Jim in MN
Jim in MN's picture

You need to go see more Carlos Mencia shows to upgrade your racism, dude. 

Thu, 07/04/2013 - 21:55 | Link to Comment earleflorida
earleflorida's picture

Keep the Government out of 'Free Market Enterprise'?... and/or-- is the 'Greenie-agenda', behind the 2.0 Arab Spring?!

http://www.bloomberg.com/news/2012-03-29/natural-gas-vehicles-will-run-best-without-subsidies.html    Mar. 29, 2012  

Note: [worthy?] China is weaning the coal industry off of the power grid?! In a big push for alternates: hydropower, nuclear power, solar/electric panels, and natural-gas/ fracking-shaleGas and Thermal/Wave&Tidal energy... not to forget light-water Nuke-Thorium Reactors modules.

funny how the clusterfuck congress and k-street have set america back by a century or so--- where catching-up means we've got too kill moar nations off to prove our bravado!!! like a brainless bully that finally gets outwitted by a nerd in a chess-pit? 

Thu, 07/04/2013 - 21:40 | Link to Comment eddiebe
eddiebe's picture

Smart for Mexico to import their energy and send us pesos. They are learning.

Thu, 07/04/2013 - 21:42 | Link to Comment suicidalpsychologist
suicidalpsychologist's picture

that s great and all, but what when there are no ressources anymore? Oh, wait, we ll probably have killed ourselves fighting for the last ressources first.

Thu, 07/04/2013 - 22:05 | Link to Comment nobodyimportant
nobodyimportant's picture

WTF are ressources?

Thu, 07/04/2013 - 22:13 | Link to Comment earleflorida
earleflorida's picture

if you've got the time? 

Prof. Albert [University of Colorado/Boulder] Bartlett: "the Most Important Video You'll Ever See" (8 part series/ segments~ 11min.`s max.)      http://www.youtube.com/watch?v=F-QA2rkpBSY

Fri, 07/05/2013 - 00:22 | Link to Comment MikeMcGspot
MikeMcGspot's picture

There will always be resources, it is what we make of them that counts in terms of survival. The scenario of balance relates to how many people are after the resources.

Imaganie if you will some scenario a hundred years out or so, where the world population has plunged due to averice and greed or what ever to a billion people? What resources will be available to these people? There is going to be a shit load, of the most concentrated resources any small group of people have ever seen.

Buildings with steel, glass, electronics, knowledge, granite countertops by the millions just laying around for people to reconfigure without mining. Insulation, regrowth of forrests..

LIkely a solid 10 ounces of gold per person, as this is not likely to be destroyed by any big event.

Of course you can take the other scenario of infinate growth whereby we are at a solid 17 billion people on July 4th 2113.

That would be more like your story, but then if everyone killed each other except a few. There will be more resources about than people know what to do with because we have spent centuries concentrating and gathering them together.

Our legacy.

 

Thu, 07/04/2013 - 21:50 | Link to Comment world_debt_slave
world_debt_slave's picture

Sadly the war on coal will be our undoing, shutting down and not building new coal plants. Wait until nat gas prices rise and see what happens with our electric bills with the drunkness of nat gas low pricing.

Thu, 07/04/2013 - 23:47 | Link to Comment MikeMcGspot
MikeMcGspot's picture

Coal is not going away, Nat Gas is a short term challenge to Nuke and Coal in the FRN world. I expect those areas of the planet  with the best diversity and depth of energy supply will have a good shot of survival over the longer term. A little wind, Solar, Hydro. What say you?

Thu, 07/04/2013 - 21:55 | Link to Comment devo
devo's picture

More speculation. Nice.

Thu, 07/04/2013 - 22:17 | Link to Comment ToNYC
ToNYC's picture

Energy prices are what's bank this day, tomorrow your partners stash, next, the other guys. Poker all day, boy plunger.

Thu, 07/04/2013 - 22:45 | Link to Comment BigJim
BigJim's picture

You really had to be there.

Fri, 07/05/2013 - 00:04 | Link to Comment MikeMcGspot
MikeMcGspot's picture

Good point, this is why I'm investing in Diesel way  more than gold.

Thu, 07/04/2013 - 22:33 | Link to Comment ebworthen
ebworthen's picture

They need the cheap natural gas for all the jobs that have been sent down there by the U.S. Corporatocracy.

Don't wonder why EBT/Food Stamps are at an all time high; fewer jobs = more public assistance.

Natural Gas for vehicles?  DUH.  Yeah, I want to pay $300 a month to heat my home.

Meanwhile, they stream over the border to lower the wage scale and fill the pews.

Of what value is citizenship and sovereignty when sold to the highest bidder?

Independence Day indeed.

From what?

Thu, 07/04/2013 - 23:34 | Link to Comment MikeMcGspot
MikeMcGspot's picture


 

Independence from what? Your sorry ass attitude. How can you live with yourself? You are really good about bitching about things. Very short on solutions other than haul out the guiltiness and bring all the little kids out to watch their evil parents get their heads wacked Can't you do any better? Jack up you game bitch. Let’s hear some alternatives if you can other than, “Life sucks then you die” History repeats itself. Pretend if you may for a moment, you are an architect of this existence rather than a prognosticator of urban porn legends of Madison Ave..   


 

 

 

Fri, 07/05/2013 - 01:22 | Link to Comment ebworthen
ebworthen's picture

Tut-tut.

My solutions are in my post, or did you not read carefully?

You sound like you care and are a good Man, so try again.

Fri, 07/05/2013 - 00:36 | Link to Comment MikeMcGspot
MikeMcGspot's picture

You are so tied to your bitching you will never get over it. Problem, problem, problem. Build a fence, shoot the mother fuckers, chop their heads off.

You are so insightful.

Wash rinse and repeat.

Sorry ass MOFO.

Thu, 07/04/2013 - 22:33 | Link to Comment walküre
walküre's picture

When NG prices start to climb steadily, the Mexicans will open more wells rather than importing. They will start to export. The Canadians alone are sitting on enough NG to power North America for a millenium. The only reason why NG prices exploded before the crash of 2008 was pure and simple market speculation driven by exuberance. Well, with some luck we will see another collapse just before NG prices get driven up again.

Someone please take the matches away from the kid traders and gamers before they burn down the house with all that confetti paper they've created.

Thu, 07/04/2013 - 23:28 | Link to Comment Escrava Isaura
Escrava Isaura's picture

Walkure, can you supply some links with, say, ONLY half-millenium reservers from Canada?

 

I have 58 TCF for Canada but Canada consumes 3TCF of natural gas a year... However, Canadian Tar Sand needs 200 TCF of natural gas to burn it.

Thu, 07/04/2013 - 22:36 | Link to Comment Fuku Ben
Thu, 07/04/2013 - 22:40 | Link to Comment kito
kito's picture

The article doesn't account for the fact that all major trucking corridor stations will have cng/lng pumps within 10 years and that the major engine companies have begun to build Nat gas powered truck engines.....

Thu, 07/04/2013 - 22:54 | Link to Comment Jim in MN
Jim in MN's picture

I can hear T. Boone Pickens cackling....

Thu, 07/04/2013 - 22:55 | Link to Comment Skateboarder
Skateboarder's picture

I/You don't know what will happen to oil in 10 years. These measures are being adopted to help buffer massive supply chain crashes in all sectors producing tangible products, in case oil turns out for the worse as the primary fuel for the world in just 10 short years. Remember, if shit don't move, this species apparently doesn't work.

Thu, 07/04/2013 - 23:19 | Link to Comment MikeMcGspot
MikeMcGspot's picture

Hey Gandalf, see the news? TOD is going out of business http://www.theoildrum.com/node/10059 per Lenan.

Life sucks then you dies sometimes in terms of information integrity.

 

Fri, 07/05/2013 - 00:26 | Link to Comment Skateboarder
Skateboarder's picture

Wow. That's pretty harsh man. I hadn't been there in a while, but it's sad to see it get archived and stopped. It's bullshit when online communities get disrupted. Digitally analagous to PRoC demolishing entire villages to build olympic facilities, etc., if that makes any sense.

Fri, 07/05/2013 - 00:01 | Link to Comment MikeMcGspot
MikeMcGspot's picture

It will be intersting to see what the trucks look like, will we have to start raising our bridges to accomodate big ass LNG tanks on the top of tractor trailors to get even a close to similar haul per ton and range as we get with Diesel? How many stations will be needed per mile? What is the cost per station? I have not done the math on it yet but did drive dual fuel trucks back in the early 80s delivering newspapers, there was a big tank in the back of my truck for the LNG, A small one for the petrol. Fueling time was quite a bit longer too for LNG, but I imagine the technology has improved since then. BTU per ton has not likely gottenn much better. Please share as you can your knowledge on the subject of the math of it all.

TY

Thu, 07/04/2013 - 23:18 | Link to Comment KashNCarry
KashNCarry's picture

The big money is on bringing industry back to North America from China where people will work for substantially less in Mexico than they will in China as labor rates ae going up in China.

Thu, 07/04/2013 - 23:49 | Link to Comment earleflorida
earleflorida's picture

slightly out-dated... but certainly relevant? Remember that guy cheney from the nixon, ford/rockefeller?, bush #41 and bush #43 regimes? Well you can't forget in early 2000??? when he got the supremes [yep... brought right to the court and had it sealed forever!] to block the transcripts from the press disclosing the 'energy program plans for the countries future, with a guest list not privy for public consumption'?    

http://www.ontheissues.org/celeb/Dick_Cheney_Energy_+_Oil.htm

what was it that happened on 911 when bush #43 brother was supervising the entire WTC security... 

???

Fri, 07/05/2013 - 02:11 | Link to Comment Missiondweller
Missiondweller's picture

How about we keep ALL of that gas here in the US and benefit from a competitive advantage in the manufacturing sectors and provide AMERICAN jobs?

Fri, 07/05/2013 - 13:52 | Link to Comment earleflorida
earleflorida's picture

true that! but mexico gives us their dope money for america's mryiad of laundromats [citi, wf, db, etel.], and in turn we give them gas`indigestion to grow more. works great for the MIC/US Treasury/Homeland Security Delivery System's? haven't heard any complaints on the border as yet!?

Fri, 07/05/2013 - 05:07 | Link to Comment dunce
dunce's picture

Ae one time we imported natural gas from Mexico. Those pipelines must still exist. all that need be done ischange some valves and move it in the other direction. I wonder about obama finding an excuse to screw up the deal on the proposed pipe lines.

Fri, 07/05/2013 - 05:55 | Link to Comment omi
omi's picture

I've got one better. http://www.voanews.com/content/putin-pushes-russian-agenda-at-global-gas-summit/1693129.html

Putin tries to get OPEC going for GAS.

Fri, 07/05/2013 - 07:05 | Link to Comment Never One Roach
Never One Roach's picture

Mecico has incredible potantial--natural resources, beautiful country, etc---  but poor leadership and super-corrupt.

If they got their act together (look at China) they could be a propsperous nation and attract tourist and much more foreign investment. Then we would not have the flood of poor immigrants wanting to cross the border for a so-called 'better life.'

Fri, 07/05/2013 - 09:39 | Link to Comment Flakmeister
Flakmeister's picture

Nat Gas will converge to roughly $7 per mcf in line with cost of production...

Rig counts have collapsed as the and E&P cos. are hemmoraging cash....

Rig counts are at an 18 year low...

http://www.reuters.com/article/2013/06/21/energy-natgas-rigs-idUSL2N0EX11920130621

These two charts are all you need to know about NGs future

Here are imports

http://www.eia.gov/dnav/ng/ng_move_impc_s1_m.htm

Here are exports

http://www.eia.gov/dnav/ng/ng_move_expc_s1_m.htm

Pay attention to the arbitrage that is possible in the LNG market..

The result of drill baby drill is be the increase in NG prices to reflect a global market...

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