Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Sun Mar 05, 2006 2:24 pm Post subject: Natural Gas
Isn't natural gas much easier to pump than oil? It's a gas, so isn't all that's involved is piercing the field and letting it flow? Doesn't that mean that it's a lot easier to pump natural gas and, thus, deplete the field than oil?
Obviously, I know very little any basic primer on the Natural gas pumping mechanics would be great
Posted: Sun Mar 05, 2006 3:06 pm Post subject: Re: Natural Gas
Russ wrote:
Isn't natural gas much easier to pump than oil? It's a gas, so isn't all that's involved is piercing the field and letting it flow? Doesn't that mean that it's a lot easier to pump natural gas and, thus, deplete the field than oil?
Obviously, I know very little any basic primer on the Natural gas pumping mechanics would be great
Viscosity differences between gas and oil is huge, and all in natural gases favor. Natural gas isn't "pumped", give it a 2psi pressure differential and it'll just move right along.
From that prespective, yes, it does make a gas field easier to deplete than an oil field, plus there aren't quite the "changing recovery factor" arguements which make for lively and interesting reserve changes.
Posted: Sun Mar 05, 2006 7:17 pm Post subject: Re: Natural Gas
Russ wrote:
So how quickly do reserves deplete? Or, how long does North America have?
Gas reserves suffer from the same reporting problems that oil reserves do, so all the usual debates can take place. Plus, its easier to produce small gas wells than small oil wells, both from an operational standpoint and an economic one, and small wells is what all wells become at some point in time or another.
My guess is once a big LNG terminal opens near a decent sized hub, north american natural gas problems just translate to world natural gas problems, same as oil, post early 70's. So maybe the question is when does the world run out, and how high will the price have to be to sustain LNG operations world wide.
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