Recently in Natural gas Category

While fuming about assaults on the oil and gas industry, US Representative Dan Boren, a devout Blue Dog Democrat from Oklahoma, told the Natural Gas Roundtable why his quest to fend off tax hikes is personal.

"If you took away intangible drilling costs, it would decimate the industry. If you took away the depletion allowance, it would be terrible," he said at this week's roundtable session. For the uninitiated, intangible drilling costs are expenses incurred while exploring for gas and oil. Federal tax law lets producers write off those costs. The depletion allowance includes deductions from gross income that are allowed by the federal tax code to investors in commodities like oil for the depletion of the minerals deposits.

If it's to be a slap fight, then bring it on. We may have an entertaining season to look forward to.

Natural gas: It's the bridge fuel. No, it's crack cocaine. And now it's the fuel that's a bit "bitchy." That is what Exelon chief John Rowe felt comfortable enough to say this week, when state utility regulators had their annual meeting in the company's home city, Chicago.

That didn't take long.

Only two and one-half hours after Devon Energy announced Monday morning that it would put it billions of dollars of Gulf of Mexico deepwater assets and some foreign fields up for sale to focus on US shale gas, the New York Times brought back the ghost of the China National Offshore Oil Corporation to haunt the story.

Under the headline "Devon Energy's Asset Sale May Draw China's Interest," the newspaper reports that CNOOC might be a logical bidder for Devon's Gulf properties.

Government-controlled CNOOC got a short, sharp lesson in US energy nationalism in 2005 when it bid $18.5 billion for California-based Unocal and its GOM fields, topping Chevron's bid by a few billion (back when billions with a "b" meant something).

Dr. Doom doesn't give a fig for your commodities exchange traded funds.

In an interview with the Hard Assets Investor website ("Common Sense on Commodities"), Dr. Nouriel Roubini, who called the top on the market in 2005 with predictions of, well, doom by 2008, said speculators pouring cash into commodities funds were to blame for oil prices near $100/barrel and above.

What we have here is a failure among gas industry advocates to sing the same song from the same song book.

The Dallas Morning News reported Friday that T. Boone Pickens said US natural gas supply will probably dry up in about 30 years. After that, the country will need some other transportation fuel, such as fuel cells or batteries.

"Natural gas is just a bridge," he said in a speech at the University of Texas. "Twenty-five, 30 years is what we're going to get out of it." He said pretty much the same thing a few weeks ago at the first meeting of the House Natural Gas Caucus.

Have no fear, natural gas is here, and with it are "tremendous opportunities to reduce carbon emissions by putting natural gas to more use in the electric sector," Skip Horvath, president and CEO, Natural Gas Supply Association, insisted Monday.

Horvath's assertion was prompted by a question posed in National Journal's blog by Senate Energy and Natural Resources Committee Chairman Jeff Bingaman: Should we start swapping coal-fired power plants for natural gas-fired plants? (A timely question as the gas lobby presses for incentives in the climate change bill.)

Bingaman, a Democrat from New Mexico, said the idea was posed October 28 by Lamar McKay, chairman and president, BP America. McKay testified before Bingaman's committee "that replacing about 8-10 of these old coal plants per year in this manner would account for about 10% of the cumulative 2020 domestic emissions reduction contemplated by pending climate bills, and that these reductions would come at a cost equivalent to about $13/ton of CO2 reduced," the senator said.

"I Want to Talk About Me," Toby Keith sings, and the natural gas industry seems to be singing along. But already "It's All About You," other traditional power-fuel groups might vocalize in return, along with the youth group pureNRG. For those sectors, the conversation always seems to get around to gas, anyway.

The gas industry is still seeking more from the climate change bill Congress will pass ... sometime. Probably. After having been scolded roundly by former Senator Tim Wirth and others several months ago for having missed the boat on the issue, the gas sector got itself in gear.

It hasn't succeeded so far in getting provisions it wants the Senate to include, so the industry, along with coal and nuclear, and efficiency interests, is continuing to work senators on the issue. The Kerry-Boxer bill is the vehicle for action, though it could be viewed as only a kind of position paper: A lot of horse-trading is yet to come.

Along come the contrarians. As shale gas is hailed as the resource that will enable natural gas to be our long bridge to a low-carbon future, two people in one day call the thought a bubble that needs to be burst.

The director of a geoscience consulting firm told a Denver meeting that shale gas companies have been seriously overstating reserves that can be produced commercially. He said they are promoting two miracles, our colleague John Kingston reports: that producing shale gas can be both low-risk and high-reward, and that an exploration venture can have both high capital costs and low gas prices -- "and still make lots of money."

In almost breathless prose, the New York Times discovered Sunday that there's shale gas out there.

All over the world. Lots of it. As with US shale, estimates of proved reserves are all over the map -- ranging from as low as 10 years' worth to as high as several centuries' worth.