Found a nice blog on resource pricing issues (Our Finite World) recently … balanced, informative and data backed. The most recent post on US Natural Gas pricing is quite good and adds a few key points to my understanding of what is up:
- There is very little storage of NatGas … this can’t blunt supply and demand mis-match
- Leases can be use-or-lose, forcing more extraction now
- Off shore rig conversion from NatGas to Oil is occurring
- Obama signed a Exec Order with wide fed powers (for national security…)
Some items I did not see in the post I think are important:
- We just had a very warm winter, so demand was way down
- Industrial use seems to be picking up especially in the chemical and refining industries
- Fracking leakages probably negates any CO2 release advantage over coal
I agree with the blog that there needs to be some long term price floor to help create a stable situation for more industrial re-activation and new uses (like LNG truck fleets) … although fracking seems faster to get on line so the old spike should not occur again as long as easy gas is available. She calls for regulation (perhaps). I hope that LNG exports might create a price floor that also can help with our balance of trade. I also suggest that we keeps non-fracted area on hold for now … although this is mostly state vs federal policy. One natural way is to create a high tax on new operations that can also pay for the impact on roads and water fracking can have.










