Natural Gas

One reason for our essential non-gas-wasting 4,680 mile 50th high school class reunion trip was to see Powder River, wy coal operation. And look at some natural gas operations too.

We use gps to locate vehicle and measure how far we went, what average speed, maximum speed, how long stopped, how long moving, total elapsed time, what altitude, when pursuing quail in New Mexico.

August 24, 2008 Now, companies are drilling long, horizontal wells and pumping in water to fracture the rock, releasing vastly more gas than could the vertical wells of old.

Aug 21 08 - 08:47 AM This week, the State Engineer’s Office began another round of “show cause” correspondence with 42 operators in Wyoming’s Powder River Basin. The State Engineer’s Office (SEO) expressed concerns about 992 wells with permits that are at least five years old and have a history of production of water with no attendant gas production, according to Wyoming Oil and Gas Conservation Commission records. CBM well permits issued by the State Engineer’s Office in that time frame contain a standard condition allowing for a review after five years.

Aug 17, 2008 CHEYENNE, Wyo. (AP) - The state has canceled or suspended permits on 243 natural gas wells in Wyoming.

The well have not produced gas for years but have continued to discharge millions of gallons of water as a byproduct.

And the state is targeting nearly 1,000 additional such wells.

The wells were drilled in the Powder River Basin in search of coal-bed methane. Because the gas is often trapped by water in surrounding aquifers, companies must pump out the water to relieve pressure on the seams and release the gas.

Saturday, August 16, 2008 Nearly 1,000 coal-bed methane wells in Wyoming's Powder River Basin have produced nothing but water for five years, according to state records, and the state engineer's office wants to know why.

There are some good reasons for certain wells not to produce any gas, but the state wants to make sure the water being pumped from the wells in question meets the standard for a "beneficial use," said State Engineer Pat Tyrrell. ...

One of LeResche's major concerns is that the water being pumped in the Clear Creek drainage tends to be laden with salts, which leaves a crust on the soil, and if it were to make its way into Clear Creek itself, it could ruin her vegetable operation, because she irrigates her farm with Clear Creek water.


OK, so oil and natural gas form an important part of our economy and provides us with fuel to heat our homes, drive our cars etc. How long will oil and gas production last in New Mexico?

High diesel prices promote investment in alternatives. It makes sense to replace diesel engines with natural gas engines in many applications. So several companies and cities are remaking their truck and bus fleets to run on natural gas. Waste Management operates a fleet of nearly 500 gas-powered trash trucks. Several cities are shifting their bus fleets to gas; 20% of all new transit buses on order have natural gas engines. This is a viable, rapidly growing industry and a few companies will benefit. ...

The importance of natural gas extends well beyond its role as an emerging transportation fuel. It's a vital feedstock in electricity and chemical production. Synthetic nitrogen fertilizers, which use natural gas as a feedstock, greatly enhance agricultural productivity. Other chemical compounds created from gas are the building blocks for electronics and plastics. Gas is also becoming a popular fuel for home heating. Natural gas furnaces are much more efficient than oil or electric heat furnaces. Without natural gas, many businesses would simply have to close their doors. Reliance on natural gas is a weak link in the global economy. ...

"Exxon said it expects demand for gas to rise in North America, outstripping the ability of gas drillers and producers to keep up. Globally, it said, LNG demand could more than triple, to 500 million metric tons a year, in 2030, from 150 million metric tons a year today. About 20% of gas consumed in North America could be imported by then, up from 3% today." ...

Japan relies on LNG for 97% of its gas and South Korea relies on it for 100%.

Regards, Dan Amoss, CFA
for The Daily Reckoning
Thursday January 10, 2008


The study released recently by University of Montana professor Dave Naugle and other researchers says that sage grouse populations dropped by 86 percent from 2000 to 2005 in areas where there was coal-bed methane activity. Grouse populations outside those areas dropped by 35 percent.

On the Energy Frontier REWARD & RISK By Tim Reiterman Los Angeles Times [W]hat's at stake Although the U.S. is the primary market for the oil, pressure for development also comes from Chinese companies that have been investing hundreds of millions of dollars in leases. Cavernous pit mines account for the bulk of the 1.2 million barrels of oil generated daily in a region with an estimated 174 billion barrels in reserve. Syncrude Canada Ltd., a joint venture that includes Exxon Mobil Corp.-controlled Imperial Oil Resources, has 18,000 workers; it spent $4.2 billion last year and has invested billions more in capital improvements. "It is not a business for the faint of heart," spokesman Alaia Moore said. At Syncrude's Aurora Mine, dozens of electric shovels eat away at the tarry deposits. With each scoop, the behemoths drop 100 tons, of dirt into trucks with beds as big as small houses. Amid clouds of dust, the trucks deliver their payload to machinery that crushes and screens it before it is mixed with hot water and piped into a cone-shaped tank. A form of petroleum called bitumen rises to the top, then is upgraded in a maze of smoke stacks, pipes and steel structures as high as 23 stories. The leftovers are stockpiled on the surrounding landscape. Huge yellow blocks of sulfur impurities are stacked pyramid-fashion. Dunes of sand. expelled from the plant sweep toward the horizon. On lake-sized tailings ponds, floating scarecrows and fire from air cannons discourage birds from alighting on the oily wastewater and dying. Recovering oil from sand requires the use of natural gas to heat water, which produces greenhouses gases and other air pollutants. The water itself is drawn from the 765-mile-long Athabasca River, which flows from glaciers in the Canadian Rockies through numerous small com- munities and sustains water- fowl, fish and other wildlife. Although improved technology and recycling have reduced the amount of water and energy needed for each barrel of oil, Syncrude's reports show overall quantities growing along with oil production. Greg Stringham, vice president of tile Canadian Association of Petroleum Producers, said oil-sands operators were looking at alternatives to natural gas for heating water, including starting controlled fires underground or using nuclear power. Some companies, he said, are looking at ways to sequestercarbon dioxide underground. "The government does not want to shut down thedevelop ment because it provides benefits (to the country) and revenues to them," Stringham said. "All anyone can hope for is the best available technology, not just stop producing oil." Wary partners Provincial water officials say they know of no water pollution from the oil sands, but some elders who once drank directly from the lake now even avoid drinking from remote streams when they hunt and trap. In Fort McKay, which is surrounded by oil mines, tribal Chief Jim Boucher recalled the hard times before the oil sands were developed. Worldwide anti-fur campaigns in the mid-1980s had destroyed traditional trapping, and the town of a few hundred was left with the choice between welfare or seeking another economic opportunity. "We decided to work with the resource development sector," Boucher said. "I am proud of our ability to make a transition and make a good living." Besides providing jobs, oil- sands operators contract with several tribal businesses and donate money for education and community faculties. But the chief acknowledged his tribe's deep fears about environmental and health effects. ... Albuquerque Tribune Sunday July 15, 2007 Note oil-sands, not tar sands.

DECKER, Mont. -- An awkward industrial dance is playing out on the sage flats of the West, a lopsided coupling of billion-dollar energy companies and a skittish ground bird prone to flee at first sight of a drilling rig.

If the bird, the greater sage grouse, lands on the endangered species list as some propose, that could put the brakes on the oil and gas activity surging through Wyoming, Utah, Colorado and Montana.

May 17, 2007 Bank of Montreal disclosed Thursday that trading losses due to bad bets on its natural gas trading portfolio have surged to $680 million from its initial report of $450 million.

Mathew Simmons on the future of energy.

Oil and natural gas are finite in their supply, and should be husbanded for portable energy production, cars, planes, boats, etc. Peak oil theories are justified, China is now training 40 thousand geologists a year to confront these challenges, the US trains 500 geologists and 40,000 lawyers. What’s wrong with this picture?

Gas production in North America topped out in 2002, and has been declining ever since, at the rate of about 1.7% annually in the U.S.

And this depletion has been relentless, despite a tripling of producing gas wells since 1971. We’re drilling more than ever, production is still declining…and now gas drilling rigs have been making an exodus from Canada.

Current supply and demand forecasts indicate that a serious shortfall in natural gas supply is looming. -----

Original Message -----
From: "bill payne"
To: "John Sobolewski"
Sent: Friday, April 20, 2007 11:27 AM
Subject: Quote from abj journal friday april 20, 2007

"Mesa del Sol is a 12,900-acre planned community expected to consist of
35,000 homes and additional commercial space, within 30 years. The water
authority has never had to consider a development of that magnitude, Sanchez
said.

"We can't handle that with our current water supply," he said."

Someone should bring up the subjecdt of additional natural gas, electricity, petroleum energy that would be required for Mesa del Sol. If they did, then they would probably conclude that Mesa del Sol will not happen.

We plan to attend the May 17, 2007 Intergated Resource Planning (Gas IRP) and bring Dave Hughes graphs. And ask some questions about future plans for rationing natural gas.

The average floor area in a newly built home last year reach an all-time high of 2,434 square feet ...

We are probably also in the early stages of a natural gas crisis in the United States. Over the next decade, the gap between U.S. demand for natural gas and dwindling supply may amount to one-and-a-half times the current equivalent of our oil imports. This is a staggering deficit. Natural gas is used for heating in more than half the houses in the United States and accounts for just under 20 percent of our total electricity production. Domestic supply is crashing. We are drilling as fast as we can, with more and more rigs each year, just to keep up.

And to make matters worse, the means of gas delivery - through a vast web of pipeline networks around the nation - makes "just-in-time" delivery the norm and, tragically, also makes "just-in-time" pricing normal, too. Thus, gas prices are responding only to the shortest-term signals - for instance, unusually mild winter weather - rather than to the catastrophic long-term reserve picture.

Finally, we are unlikely to solve our natural gas problems with imports for technical reasons having to do with the cost and difficulty of moving the stuff by means other than pipelines and for geopolitical reasons, namely that most of the remaining gas in the world is in Asia.

Sempra Aggressively Pursues Opportunities

April 11, 2007

By Al Senia, Guest Editor

[F]undamentally, Hulse and other Sempra executives see a growing need for natural gas worldwide and adequate supplies in many parts of the world that have small local markets and the desire to export their supplies. "On an energy-equivalent basis, proven gas reserves now exceed proven oil reserves," said Hulse. "So there is more energy locked in gas than there is in oil. As we analyze that going forward, it means gas is going to take a more predominant role in our energy mix."

To meet that need, Sempra has invested $2.2 billion in developing three LNG receiving terminals in Baja, Mexico, in Port Arthur, Texas and near Lake Charles, La. The $800 million Baja facility, known as Costa Azul, is the most interesting because it will be the first of its kind on the Pacific Coast. It is expected to process 1 billion cubic feet (bcf) per day of natural gas when it begins commercial operation next year. Officials hope to eventually increase daily production to 2.5 bcf. ...

Natural gas can be found in pockets by itself or in petroleum deposits. Natural gas wells average 5,000 feet deep!

The Natural Gas Pit

At one time, the oilpatch used one barrel of conventional oil to find 100 more--a tidy energy profit ratio. The tarsands, a thoroughly unconventional product, make a mockery of such accounting and boast a net energy intensity two to three times that of conventional heavy oil. As a consequence, it now takes the energy equivalent of one barrel of oil to create two barrels of oil from the tarsands.

Much of this energy comes from natural gas, a relatively clean fuel used to steam up the tar or upgrade the carbon-heavy pitch into a marketable product. According to a 2005 report by the Pembina Institute, the industry daily consumes more than half a billion cubic feet of natural gas, or "enough to heat 3.2 million Canadian homes per day." (In 2006, industry consumption actually surpassed a billion cubic feet daily and partly accounted for falling gas exports to the U.S.) By 2012, the tarsands will burn enough natural gas each day to heat every home in Canada.

Given that experts say Canada has only a nine-year supply of proven natural gas reserves left (undiscovered and unconventional reserves might extend that timeline, but with large environmental costs), former Alberta premier Peter Lougheed has described the natural gas addiction in the tarsands as a waste of a "valuable resource." Houston investment banker Simmons, author of Twilight In The Desert (a look at Saudi Arabia's dwindling oil reserves) is even more blunt: "If I were a Canadian, I'd make it illegal to use precious natural gas and potable freshwater to turn gold into lead in the tarsands." His recommendations for policy-makers are equally stark: go slow, charge for water, cap tarsands production and "find some other way to produce this atrocious resource other than using scarce natural gas....To get more addicted to the tarsands doesn't make any sense to me."

A mud volcano that has erupted in Indonesia, forcing the evacuation of thousands of villagers, was most probably caused by drilling for gas, according to the first published scientific study into the phenomenon.

The Western Canada Sedimentary Basin (WCSB) is one of the major gas-producing areas of North America. It supplies about a quarter of all gas used by the US and Canada, and 98% of Canadian production. Current production is 450 million cubic metres a day. To put this into perspective, this volume is close to half a cubic kilometre, and the mass of this much gas is 330,000 tonnes.

The severity of the crisis is much greater than I assumed might occur when I first began speaking out on the potential for sharply escalating natural gas prices almost five years ago.

Fraud?




Thursday December 28, 2006

KARACHI: Four power plants have been closed in the country due to scarce supply of natural gas, federal water and power minister told a press conference in Karachi. Federal Minister for Water & Power Liaquat Ali Jatoi told the newsmen here that the power plants of Muzaffargarh, KAPCO, Jamshoro and Kotri have been shutdown due to lowering gas supply, which has cut down power production for Wapda. He said that the power plants could not be operated with only 25 percent gas supply. The prime minister has been informed about the situation, he further said.

Because there is said to be only 50 to 75 years of natural gas on domestic property, such groups maintain that policymakers ought to pursue a sustainable energy strategy.

Do not fear the enemy, for your enemy can only take your life. It is far better that you fear the media, for they will steal your HONOR. That awful power, the public opinion of a nation, is created in America by a horde of ignorant, self-complacent simpletons who failed at ditching and shoemaking and fetched up in journalism on their way to the poorhouse.
Mark Twain

Many, if not most, of the articles posted on energy are written by liberal arts-educated writers, not engineers or scientists.

There are lots of not-to-bright PhDs and engineers. And lots of really smart self-educated people too.

Writers [msm = mainstream media] have been accused of attempting to shape the news [spin doctors - See and hear Al Gore comment on this in An Inconvient Truth].

These writers sometime rely on FACTOIDS. Factoid? "only 50 to 75 years of natural gas on domestic property"

Maybe Twain's statement, "[a] horde of ignorant, self-complacent simpletons ..." is more meaningful?

This impending crisis can be prevented by adopting a comprehensive national energy strategy to reduce U.S. dependence upon natural gas as a fuel to generate electricity.

British Gas is the most expensive energy supplier in the UK, with average annual gas bills up 91% since 2003, to £707, and the average electricity bill 81% higher at £428. It hiked household bills by 22% in March and put a further 12.4% on the cost of gas and 9.4% on the cost of electricity in September.

Below is just for the US.
----- Original Message -----
From: w.d.reynolds@att.net
To: bill payne
Sent: Saturday, December 09, 2006 5:07 PM
Subject: Re: peak natural gas(7)

Bill: Per day. This represents about 50% of the daily production from all sources at standard temperature and pressure. About 7.5 million tons annually.

Warren

-------------- Original message from "bill payne" : --------------

Warren

"Although, the refineries right now use over 4 billion cu. ft. of hydrogen via catalytic "cracking" of natural gas in their refinery processing of oil.

4 billion cu. ft per ? Day? Month? Year?

thanks

bill


Warren Reynolds forward the below link on Friday December 8, 2006.

Coming to grips with, even accepting the idea of Peak Oil has taken at least 10 years, like the acceptance of climate change and the need to do something about it – which has taken about 15 years. How long will it take for Peak Gas to be accepted as fundamentally linked and related to Peak Oil?

Peak Gas will surely arrive while the jury is still out, debating whether Peak Gas exists!

Citadel trading costs hit $5.5bn

The importance to Wall Street of a handful of large hedge funds was starkly illustrated by the disclosure that Citadel Investment Group paid more than $5.5bn in interest, fees and other investment costs last year. Although the net asset value of Citadel’s two funds is only about $13bn, its costs are high because its managers trade frequently and take on huge leverage.

[o]il tycoon Pickens, who took home an equally astounding $1.4 billion from two hedge funds he quietly launched ten years ago.

With any luck, Pickens and his hedge fund will get creamed again, as he presumably did when oil fell and he was still on TV trying to talk up the price.

Amaranth Advisors lost some $6.5 billion on natural gas bets gone wrong, but that hasn't stopped hedge funds from wagering $3 billion on the volatile commodity over the last 10 months, Bloomberg News reports. Citadel Investment Group, T. Boone Pickens and the Merchant Commodity fund are just some of the energy investors to pour money into the sector, expecting a big rebound. In fact, Citadel picked up some of Amaranth?s bad trades, which ConocoPhillips analyst Jim Duncan estimates could be in the money already. 'If you told me I had to go long or short today, I would go long,' Pickens told Bloomberg, which reports his hedge fund is up 120% this year. Experts expect a favorable turn for natural gas, with demand expected to rise 3% in the U.S. next year, coupled with tightening supplies worldwide.

See T Boone Pickens below.

November 14-17, 2006 photos of Patterson oil rig southwest of Hope, NM.



Note plastic pipe.

Pipe runs a mile or more to the east.

Water is scarce so assumption is that pipe is to carry water to drill site.

Quaneco contacted us in the spring of 2006



to invest in a natural gas drilling project. We didn't do it. Quaneco.com doesn't appear to work on Sunday December 3, 2006. Googling Quaneco gas.

Gustavson Associates.

There is a second Patterson rig operating about 7 miles to the east of the above rig.

We wonder how these projects are being funded?

We read on Internet that pension funds are seeking higher rates of return by investing in more risky projects.

Reason these photos were taken is that senior citizen [b 1939] hunting buddy and bill [b 1937 - 45 days after Saddam ... who he hopes to outlive.] were quail hunting on opening day in New Mexico!

Quail are located 1 near water, 2 in brushy draws, or 3 in the open when you hear them call ... and, of course, 4 when you see them driving around in essential non-gas-wasting food-gathering travel.

We heard quail calls and pursued.



No quail located. But we got lots of senior citizen exercise.

Bill harvested 6 quail.

Here's senior hunting buddy cleaning victims ... who he took home to eat.



While bill drank a cold Corona.

That's a corona bottle you see just to the left of hunting buddy's watch.

Dear readers, these essential non-gas-wasting trips may be coming to an end for other than the reason of advancing age.

We may be entering into one of the wildest periods in human history. Post peak oil and natural gas.

So we continue to do our senior citizen things with interesting people and hope we can get matters settled before they get far worse.

Are We Heading for Peak Gas?

It’s estimated that unconventional gas production now comprises about 40% of total U.S. production. But it’s important to remember that this type of production requires far higher levels of drilling activity compared with conventional production.

Manufacturing Process -
How we make Ammonium Nitrate 34-0-0 / 34.5-0-0

Ammonium nitrate is made by first making nitric acid* and then neutralizing the nitric acid with anhydrous ammonia, creating ammonium nitrate liquor. The liquor is evaporated to 99% ammonium nitrate and formed into dense ammonium nitrate granules or prills.The granules are coated with a conditioning agent to improve handling and storage properties.

All major nitrogen (N) fertilizer sources begin with the fixation of non-plant available atmospheric N2 molecules into anhydrous ammonia molecules (NH3). Our atmosphere is approximately 78% N2. The process of converting N2 to NH3 is referred to as the Haber-Bosch process after the chemists who discovered and commercialized this reaction. The production of NH3 involves

Air (N2) + Natural Gas (CH4) = Anhydrous ammonia (NH3)

Anhydrous ammonia contains 82% N and is a gas that is handled as a liquid under pressure, similar to propane. Anhydrous ammonia is widely used in the Corn Belt and Great Plains for direct application to crops, but is not widely used in Virginia, although there is some use on the Eastern Shore of Maryland.

Since air is still free, the major cost of manufacturing anhydrous ammonia is associated with the cost of natural gas. As natural gas prices have risen in the U.S., the cost of producing anhydrous ammonia has increased to the point that much U.S. production capacity has been closed. This is because the value of natural gas is greater for other uses, i.e. home heating and electrical power generation, than for N fertilizer production.

Propane is a by-product from two sources: natural gas processing and crude oil refining. Most of the LPG used in the United States is produced domestically. When natural gas is produced, it contains methane and other light hydrocarbons that are separated in a gas processing plant. Because propane boils at -44°F and ethane boils at -127°F, it is separated from methane by combining increasing pressure and decreasing temperature.

The natural gas liquid components recovered during processing include ethane, propane, and butane, as well as heavier hydrocarbons.

Propane and butane, along with other gases, are also produced during crude refining as by-products of the processes that rearrange or break down molecular structure to obtain more desirable petroleum compounds.

----- Original Message ----- From: Whiskey & Gunpowder To: bpayne37@comcast.net Sent: Wednesday, November 22, 2006 12:02 PM Subject: Peak Oil & Gas, Energy Cornucopia, and Reality, Part II Whiskey & Gunpowder November 22, 2006 by Dan Amoss York, U.S.A. Peak Oil & Gas, Energy Cornucopia, and Reality, Part II In Part I of this article, I commented on an October press release from CERA. More specifically, I explained why you should take CERA’s long-term oil and gas supply forecasts with a grain of salt. My colleague Byron King wrote about how CERA declined the invitation to send a representative to last month’s ASPO-USA conference. The conference welcomed presenters from a wide range of backgrounds, and CERA certainly would have added to the discussion by presenting its case. Nevertheless, there was plenty of intellectual firepower to analyze how the world is dealing with the challenges posed by depletion of oil and natural gas. Among the experts was Dave Hughes, a very qualified professional who informed the audience about his research on both natural gas and Canadian tar sands (or “oil sands”).

Payne has been receiving literature trying to get us to invest in natural gas well projects.

Oct. 16 (Bloomberg) -- Citadel Investment Group LLC, the $12 billion hedge fund manager, T. Boone Pickens and the Merchant Commodity fund expect natural gas to rebound from a historic losing streak.

Hedge funds amassed a $3 billion wager on rising prices in New York futures markets as gas plunged 74 percent in the past 10 months, the biggest drop of any commodity. Chicago-based Citadel added to its bet in September by taking over trades from Amaranth Advisers LLC, the hedge fund that's closing after losing $6.5 billion in the gas market.

Demand for gas, used for furnaces and power plants, will outstrip supply as production from U.S. wells declines in 2007, say the chief executive officers of energy producers Devon Energy Corp. and EOG Resources Inc. Natural gas will average $9 per million British thermal units over the next 12 months, says EOG's chief, Mark Papa, up from less than $6 last week.

``If you told me I had to go long or short today, I would go long,'' betting on higher prices, said Pickens, whose Dallas hedge fund is up 120 percent this year. Gas may reach $10 this winter if cold weather depletes inventories, he said on Oct. 11 in New York. He declined to predict when his fund might get back into the gas market after exiting earlier this year.

Natural gas may rise as high as $12 per million Btu by March, said Michael Coleman, founder of Singapore-based Aisling Analytics Pte Ltd., which runs the $386 million Merchant Commodity hedge fund.

Falling Supply

While demand for gas to run power plants is increasing in North America, supply isn't growing, said Michael Morris, chief executive of Columbus, Ohio-based American Electric Power Co., the second-biggest U.S. electricity producer. Prices fell earlier this year after the fifth-warmest winter on record and a cool summer that reduced demand for electricity to run air conditioners.

The amount of gas pumped from U.S. wells is likely to decrease 1 percent this year, and supplies from new wells are declining at a faster rate than five years ago, said David Khani, an oil and gas analyst at Friedman, Billings, Ramsey & Co. analyst in Arlington, Virginia.

Daily U.S. production of natural gas fell to a 12-year low of 49.8 billion cubic feet in 2005 because of damage to plants from hurricanes, according to the U.S. Energy Department.

``The critical part is the production capacity of natural gas wells, and that is flat at best from the past winter,'' Devon Chief Executive Larry Nichols said in a telephone interview. Prices may rise ``dramatically,'' especially if winter is colder than normal, he said. Devon, based in Oklahoma City, is the second-largest independent U.S. natural gas producer.

We were expecting below envelope which arrived in Tuesday February 5, 2008 mail. And we are ready as you can see below.