the big picture on natural gas
DESCRIPTION
North America currently has the cheapest natural gas prices in the world. Can this trend continue?TRANSCRIPT
The Big Picture on Natural Gas
Jim Letourneau, P.Geol.Big Picture Guywww.JimLetourneau.com
Montreal Investment Conference - November 28, 2011
Energy Policy
"We have only two modes - complacency and panic."— James R. Schlesinger, the first U.S. Dept. of Energy secretary, in 1977, on the country's approach to energy.
Energy Use Per Capita
3 Game Changers
• Shale oil
• Shale gas
• Enhanced Oil Recovery
Energy Sources
CA - Electricity Renewables
CA - Electricity Translations
IMPORTS=COAL
THERMAL=NATURAL GAS
California Electricity - All
Quebec - 97% Hydro
Utica Shale Resource
•18-40 trillion cubic feet
•Market value of $70-140 billion
Natural Resources Canada
Global Natural Gas Prices
Platts Commodity Pulse
Global Arbitrage
North America has the cheapest natural gas in the world!
What Happened?
What Happened?
Bullish Arguments•The gas oil ratio is 6:1 on an energy
equivalence basis and prices should return to that ratio.
•Natural gas prices always “come back”
•The environmental concerns will cause more delays and more expense.
•Shale gas wells decline quickly
Bullish Arguments
•The gas oil ratio is 6:1 on an energy equivalence basis and prices should return to that ratio.
Bullish Arguments
•Natural gas prices always “come back”
Bullish Arguments
•The environmental concerns will cause more delays and more expense.
Bullish Arguments
•Shale gas well production declines quickly
Declines - Fayetteville
Refrac!
Refrac!
What to Do?
Tough market for natural gas producers. Large efficient operators will rule the roost.
What to Do?
Great time for natural gas consumers.
Beneficiaries
•Natural gas vehicles•Gas to liquids•Petrochemicals•LNG Terminals/Transport
ConclusionYou can never outsmart the market, if that's what you're trying to do, find something you love, for reasons you understand, that not everyone agrees with you about, and put your money in it.
GENE SISKEL
www.JimLetourneau.com
Jim Letourneau, P.Geol.Big Picture Guy