A nifty graph and a warning from Gregor.us:
HT: FT EnergySource
The July issue of Gregor.us Monthly, The Burden of Transition, takes a renewed look at North America’s quite large natural gas inheritance, but then wonders how our economy could transition more fully to that resource. At our present moment, nothing is more clarifying to the case of peak cheap oil than to watch Brent trade at 73.50 as double digit unemployment negatively blooms across the United States. Strictly on a BTU basis, natural gas is dirt cheap and trades at an equivalent to 24 dollar oil. What a pity. If only we were set up structurally to capture more of this energy, at nearly 1/3 the price of oil.
North America does not have new natural gas deposits. But, we do have a new technique to extract this gas, from shale
rock. Over the past year, both a learning curve and a cost curve have kicked in on shale natural gas, and the result is that our total resource base is leaping ahead rather quickly. As one might imagine, there’s a fair amount of dispute over the size and recoverability of this resource. I see a mistake from each side, in the debate.First, natural gas is not oil. It’s fairly meaningless to tally up the BTU content of a 2000 trillion cubic foot (tcf) resource base (in the USA) and then equate that, say, to Saudi reserves of oil. Liquid energy carries a price premium and for good reason....MORE