As an "in the shale" landowner, I care about growing natural gas sales in hope of supporting, and possibly even raising, the price of natural gas. This can impact the size of my monthly royalty check.
Everyone already is aware the Saudis, and OPEC, are competing hard against USA shale oil producers. This has driven down the cost of gasoline, which is a sweet outcome. But there is other fallout which concerns me. Declining cost of crude is lowering the price of home heating oil.
The impact could come our way via reduced numbers of conversions. We want homeowners to convert from oil heat to natural gas heat. Those conversions are driven by the cost differential between the two fuels. Homeowners must invest money into their homes to pay for a conversion. When the cost differential between oil and natural gas is large, homeowners recoup their investment more quickly. Thanks to the Saudis the cost differential, though still in our favor, is smaller today than it was just a year ago.
The above hit home for me as I was reading this article, from Maine:
To read that article you have to answer one or two questions. It's painless. There is no need to sign in or sign up or anything stupid like that. Just click to answer their question(s) and they will instantly show you the article.
"Saudis "--ans--YES,YES--look @ the mkts & realize the short, & long term effects---you need capital (capex) to drill, oil, ng, ngls condensate--it requires O & G cos to borrow huge sums of $$$--are banks going to keep lending to a "falling knife " ???---our so/called Saudi friends are hell-bent on destroying the Shale process that is taking place in the US &CA whether it be oil, ng et al---pls note that about 20% of the growth in GNP (US) is from " Shale "---
17 of the 19 Trade Center bombers were SAUDIS...
Hey Mike, should we nuke Arizona?
In 2012 the national electorate was
72% white and
41% made over $50,000..
In Ohio the slow down in production will allow the state government to figure out we are missing out on money to pay for infrastructure by allowing producers to walk away with NGLs that are not documented with the ODNR.
Like WV did recently, ODNR will have time to figure out how to track NGLs (maybe take a look at WV plan) and the lawmakers can change the severance tax in the Revised Code to include NGLs.
I can't leave out the landowners especially our Buck Well 1H, this slow down will minimize how much product is stolen and allow the Dept Of Justice to act before CHK walks away with billions as they have done in every state, PA being the closest example.
As Bruce Buck once said and I have quoted several times "If they aren't going to pay me for what they are taking, they can leave it in the ground". Bruce has yet to get an NGL royalty since they are still BAD. What a bad joke the producer is pulling on Bruce, I hope the ceo gets his stripped pajamas and free room an board for this one. It's time the laws of each state and the Federal Government are enforced on everyone regardless of wealth and power. The higher up the food chain the longer the sentence since they obviously understand what they are doing to our country and it's citizens. Long Live the Democracy.
Just a quick note..... Peoples Gas.... will be switching their customers to Natural Gas. They said that it will save the customers $$$$$ ! Sounds good to me.
That's a lot of part swapping to make a switch to a new type of gas (orifices etc.)
I don't understand what your saying. Switch from what? All of Peoples customers are using natural gas.
I think the Nuke talk is a bit over the top. The question is "Are the Saudis hurting our prospects?" Delaying yes, which most of us are used to anyway. It is my opinion that this is not necessarily a Saudi vs. US Shale Drillers as it is a Saudis vs. Russia issue. The demand will still be there domestically, infrustructure is what is light years behind. Once infrustructure is in place and the chemical companies can use all the compounds that are produced we will see a major move. In the mean time leasing will slow in new areas, and that is to be expected. 10 more years is my guess.
The British own MOST of our OIL anyway...
Gulf and Alaska..
and every BP station on every corner of the US...
and the British run the Middle East since WW1
Not much left of this country...
At least Obama sent Churchhills statue back :)
This afternoon's update:
"West Texas Intermediate oil fell below $60 a barrel for the first time since July 2009 as Saudi Arabia questioned the need to cut output, bolstering speculation that the kingdom will defend market share."
“The market is in free fall,” Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania, said by phone. “Prices will continue to fall until the Saudis signal that they are prepared to take action or we see the global economy pick up.”
Your link to still more detail is here.