"Still hope for [North Slope] gas pipeline"

'“Current market prices for natural gas in North America may not provide adequate return for full development of shale resources in North America,” the Black & Veatch report says. “Significant levels of current shale production appear to be driven by requirements to drill to maintain acreage positions.”'

http://www.petroleumnews.com/pntruncate/760927191.shtml 

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Replies to This Discussion

Permalink Reply by paleface on November 27, 2010 at 9:23am
I would think the north east shale gas would become the primary supplier because of location to big demand areas NY,PHILA and electric power plants with lower cost to produce than Alaska, as long as regulators don't drive the gas companys away.
Permalink Reply by Ann Ticopa on November 27, 2010 at 12:52pm
No, I wouldn't expect to see much Alaskan gas in the NE either. But perhaps in other parts of the U.S.?

The company that did the report for the Alaskan government does acknowledge that there are unknowns. But they speculate that in about 10 years, the price of gas will up to a point where the pipeline venture would be profitable. They also think that shale gas production costs are underestimated and will increase.

They mention leasing costs as being hard to determine. If one thinks about TC, the gascos lucked out in having a substantial acreage leased at T/BR rates. Assuming six wells/sq. mile, the early leasing cost per well was a trivial $5,000. In September, it was up to about $250K and the royalty had increased 20%. Landowners do have a blind spot when it comes to our contribution to development costs. We worry about a severance tax and/or regulations driving gascos out of PA. But how many would be willing to accept a lower bonus/royalty to keep the gascos in PA?

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Permalink Reply by William Ladd on November 27, 2010 at 12:21pm
I wish these speculators would get off their fat butts and quit passing bad gas! They need to go to work with a pick and shovel instead of their spreadsheets and start putting in the infrastuctures necessary to be ready to move gas from these wells.

Everyone from the very top to blue collar workers need to go on a subsistance payment schedule. The greed factor has to be erased. High living must be curtailed until everyone can be allowed to enjoy the gifts and treasures of the earth!
Permalink Reply by Tim Hale on November 30, 2010 at 10:52pm
William,
Lets be careful here. Most of the physical natural gas industry is not wall street. I, nor my firm, spec. I have been working on the infrastructures necessary to get those picks and shovels moving. But a few spreadsheets are required to raise the billions required to make this happen, it comes from banks and investors who recently have not been so friendly. In the mean time, we are faced with all kinds of crazy requirements. For example, we are conducting "Indiana Bat surveys" of all right of ways per the DEP and EPA. Only a 6 month delay....I was wishing those bats would move back to Indiana and out of pennsylvania....or cracking some rock a mile below your feet will somehow hurt you is crazy. Its ok to strip mine in PA but not drill for gas....My God. Help is coming my friend....lets face it there lots of fat butts...just not on my end. Attaching the job creators helps the other sides cause and misses the point. Going back to the pick and shovel work.....God Bless you and wish me well.
Permalink Reply by Ann Ticopa on December 1, 2010 at 10:31am
Permalink Reply by Tim Hale on November 30, 2010 at 10:28pm
Guys,
The Alaskan gas be going to Japan , China , and Korea via LNG tankers from a plant somewhere on the western side of Alaska inorder to pay for American purchases from those countries. The cost to produce shale gas here in the eastern us is less than the cost of transporting Alaskan gas here, assuming it was free. It's ok, I will let my 7th generation kids (140-160 years from now) figure out how to pay for their China, Indian and Korean purchases at Walmart then, since we have that much gas. Our major oil companies finally thru the towel in when Exxon puchased XTO (6 months ago), Shell purchased East (3 months ago) and now Chevron purchased Atlas (3 weeks ago)...that story is over. Maybe free trade does work...they took all of the Pennsylvanian blue collar jobs and now we get to sell them the energy to do it.
Permalink Reply by Ann Ticopa on December 1, 2010 at 10:43am
The Alaska pipeline route is undecided.

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