4 ms·

In Booming Oil Field, Natural Gas Can Be Free

41 points by prostoalex 8y ago

neonate 8y ago
https://outline.com/4ZTV5c https://outline.com/4ZTV5c
TheSpiceIsLife 8y ago
A guy a went to trade school with, two decades ago, used to tells stories of drilling for oil in South Australia and finding nat gas, more nat gas, and nat gas again. They’d just cap the well and move on.
whatshisface 8y ago
This situation will not last forever because new chemical plants and pipelines will be built. Typically the natural gas is processed into things like plastic pellets that are then shipped to China for assembly into goods to be shipped back. It is easy to see why reducing fossil fuel use is so hard when it acts like the juice of life for economies near the places that have it.
- gleglegle 8y ago
  Not true. Flaring of natural gas will happen until it’s prohibited, as it has since the inception of the industry. Building pipelines and chemical plants is not viable in most of the cases where gas is flared.
  - whatshisface 8y ago
    The article is focusing on trading gas at low prices, which means that the transportation infrastructure is there, to get it to a useful place (otherwise it wouldn't be low-price gas, it would be unsold gas). Gas is flared when it can't be sold, but in this case we see gas being sold at extraordinarily low prices. New ethylene plants are being built in the US gulf coast area. Here are some links: https://news.exxonmobil.com/press-release/exxonmobil-starts-new-ethane-cracker-baytown-texas https://news.exxonmobil.com/press-release/exxonmobil-starts-... http://analysis.petchem-update.com/supply-chain-logistics/ineos-build-sm-plant-us-gulf-coast-more-ethylene-projects-scheduled-china http://analysis.petchem-update.com/supply-chain-logistics/in... http://analysis.petchem-update.com/supply-chain-logistics/us-ethylene-growth-spurs-new-plastics-export-routes http://analysis.petchem-update.com/supply-chain-logistics/us... New pipelines are presently being constructed: https://napipelines.com/oil-pipeline-report-new-administration/ https://napipelines.com/oil-pipeline-report-new-administrati... The coming increase in gas prices off the absolute bedrock level they are at now cannot be priced in to present-day gas prices because gas is so hard to store. However, it is probably already priced in to oil company shares, so even though this information is true I doubt there is any money left to be made off of it.
  - jackfoxy 8y ago
    I'm pretty sure it's a safety issue. You can flare the natural gas, or you can collect it, if it's economic to do so, but you can't just let it accumulate in the general vicinity. Boom.
    - d1tchdigger 8y ago
      Not only that, but poisonous gases (mainly H2S) are also present in natural gas, which can kill you in concentrations as low as 100 ppm, which, in percentage terms, is 0.01%. This gas is heavier than air, so it also tends to concentrate in low lying areas.
ChuckMcM 8y ago
Given the excess pipeline capacity to Mexico from the article I'm guessing building a chemical plant in Mexico would be good thing, except it probably takes 3 - 5 years before you can bring a plant online and who knows what gas prices or demand will be like 5 years from now.
npongratz 8y ago
Enough flaring that the fields show up at night via satellite, rivaling some cities: https://www.npr.org/sections/krulwich/2013/01/16/169511949/a-mysterious-patch-of-light-shows-up-in-the-north-dakota-dark https://www.npr.org/sections/krulwich/2013/01/16/169511949/a...
phil21 8y ago
One of the more interesting crypto mining ideas I've been exposed to (and it's been quite a few...) is co-locating shipping containers with natural gas generators plus compute at oil fields flaring off natural gas. The idea was the companies would potentially even pay you for taking it, since most states(?) will charge you some nominal "environmental" fee for flaring it. I have no idea if anyone actually went through with the idea, but it certainly was discussed quite a bit a couple years ago. It's an exceedingly interesting use case. Effectively free raw energy, but almost no proper connectivity. Very few use cases for such a situation, but even a 3G modem is fine for mining. I'm not certain what other uses one could come up with for on-site use of this energy...
- npongratz 8y ago
  Anecdote alert: based on conversations I've had with workers on location, there's plenty of energy being generated -- the heat from flaring wells can be felt hundreds of yards away.
- aaron695 8y ago
  It's also be a interesting way to steal gas and convert it to $ (Where someone else owns it) and pay no taxes and skip environmental regulations, no transport fees etc. I'd be an interesting theft, setup a rig in a National Park or something. In Mexico and Nigeria they do it the old school way. https://www.rollingstone.com/culture/culture-features/drug-war-mexico-gas-oil-cartel-717563/ https://www.rollingstone.com/culture/culture-features/drug-w... https://oilprice.com/Energy/Crude-Oil/Nigerias-Oil-Theft-Epidemic.html https://oilprice.com/Energy/Crude-Oil/Nigerias-Oil-Theft-Epi...
- samstave 8y ago
  Would this be the same flaring off that one sees on Oil Rigs? -- I wonder if @RDL would be inclined to speak on the idea of floating a data-barge comprised of the sea-based-data-tubes that Gates has been funding (Project Natik) https://gizmodo.com/microsofts-newest-data-center-is-a-giant-metal-can-at-t-1826606291 https://gizmodo.com/microsofts-newest-data-center-is-a-giant...
Nasrudith 8y ago
Disclaimer - couldn't read more than an introductory two paragraphs - this may be addressed in text. I wonder why they don't just start stockpiling liquefied natural gas and wait for the value to eventually rise. Even if prices don't rise sufficiently to sell it could potentially be vertically integrated to substitute for burning coal for input heat in oil refineries. Perhaps it is related to the liquification process costs plus storage.
- D_Alex 8y ago
  One big problem is that the production usually starts at a high rate, then declines quite rapidly - say 20-50% per year - for the remainder of the field life. If you design for the peak rate, the plant will be expensive and underutilized. If you design for a lower rate, the plant will economically insignificant and you still have to flare a lot of the gas initially.
  - Nasrudith 8y ago
    Ah so even if they could make some sort of mobile liquifier (no guarantees of something sufficently big like that being energy efficient net let alone financially a good investment) it would be a logistical pain.
- samstave 8y ago
  I wonder if it would be because storing/creating liguified natural gas in large quantities requires an incredibly complex, expensive system to do so? (I am speculating on the economic of this based on this guy: https://www.telegraph.co.uk/finance/newsbysector/transport/10496977/Worlds-largest-ship-bigger-than-Empire-State-Building-launches.html https://www.telegraph.co.uk/finance/newsbysector/transport/1...
cat199 8y ago
"The resulting greenhouse-gas emissions are equivalent to the daily exhaust emitted by about 2.7 million cars" why i find those seriously concerned about carbon footprint from eating meat a bit strange..

41 points by prostoalex 8y ago

https://outline.com/4ZTV5c https://outline.com/4ZTV5c

A guy a went to trade school with, two decades ago, used to tells stories of drilling for oil in South Australia and finding nat gas, more nat gas, and nat gas again. They’d just cap the well and move on.

whatshisface 8y ago

This situation will not last forever because new chemical plants and pipelines will be built. Typically the natural gas is processed into things like plastic pellets that are then shipped to China for assembly into goods to be shipped back. It is easy to see why reducing fossil fuel use is so hard when it acts like the juice of life for economies near the places that have it.

gleglegle 8y ago
Not true. Flaring of natural gas will happen until it’s prohibited, as it has since the inception of the industry. Building pipelines and chemical plants is not viable in most of the cases where gas is flared.
- whatshisface 8y ago
  The article is focusing on trading gas at low prices, which means that the transportation infrastructure is there, to get it to a useful place (otherwise it wouldn't be low-price gas, it would be unsold gas). Gas is flared when it can't be sold, but in this case we see gas being sold at extraordinarily low prices. New ethylene plants are being built in the US gulf coast area. Here are some links: https://news.exxonmobil.com/press-release/exxonmobil-starts-new-ethane-cracker-baytown-texas https://news.exxonmobil.com/press-release/exxonmobil-starts-... http://analysis.petchem-update.com/supply-chain-logistics/ineos-build-sm-plant-us-gulf-coast-more-ethylene-projects-scheduled-china http://analysis.petchem-update.com/supply-chain-logistics/in... http://analysis.petchem-update.com/supply-chain-logistics/us-ethylene-growth-spurs-new-plastics-export-routes http://analysis.petchem-update.com/supply-chain-logistics/us... New pipelines are presently being constructed: https://napipelines.com/oil-pipeline-report-new-administration/ https://napipelines.com/oil-pipeline-report-new-administrati... The coming increase in gas prices off the absolute bedrock level they are at now cannot be priced in to present-day gas prices because gas is so hard to store. However, it is probably already priced in to oil company shares, so even though this information is true I doubt there is any money left to be made off of it.
- jackfoxy 8y ago
  I'm pretty sure it's a safety issue. You can flare the natural gas, or you can collect it, if it's economic to do so, but you can't just let it accumulate in the general vicinity. Boom.
  - d1tchdigger 8y ago
    Not only that, but poisonous gases (mainly H2S) are also present in natural gas, which can kill you in concentrations as low as 100 ppm, which, in percentage terms, is 0.01%. This gas is heavier than air, so it also tends to concentrate in low lying areas.

ChuckMcM 8y ago

Given the excess pipeline capacity to Mexico from the article I'm guessing building a chemical plant in Mexico would be good thing, except it probably takes 3 - 5 years before you can bring a plant online and who knows what gas prices or demand will be like 5 years from now.

npongratz 8y ago

Enough flaring that the fields show up at night via satellite, rivaling some cities: https://www.npr.org/sections/krulwich/2013/01/16/169511949/a-mysterious-patch-of-light-shows-up-in-the-north-dakota-dark https://www.npr.org/sections/krulwich/2013/01/16/169511949/a...

phil21 8y ago

One of the more interesting crypto mining ideas I've been exposed to (and it's been quite a few...) is co-locating shipping containers with natural gas generators plus compute at oil fields flaring off natural gas. The idea was the companies would potentially even pay you for taking it, since most states(?) will charge you some nominal "environmental" fee for flaring it. I have no idea if anyone actually went through with the idea, but it certainly was discussed quite a bit a couple years ago. It's an exceedingly interesting use case. Effectively free raw energy, but almost no proper connectivity. Very few use cases for such a situation, but even a 3G modem is fine for mining. I'm not certain what other uses one could come up with for on-site use of this energy...

npongratz 8y ago
Anecdote alert: based on conversations I've had with workers on location, there's plenty of energy being generated -- the heat from flaring wells can be felt hundreds of yards away.
aaron695 8y ago
It's also be a interesting way to steal gas and convert it to $ (Where someone else owns it) and pay no taxes and skip environmental regulations, no transport fees etc. I'd be an interesting theft, setup a rig in a National Park or something. In Mexico and Nigeria they do it the old school way. https://www.rollingstone.com/culture/culture-features/drug-war-mexico-gas-oil-cartel-717563/ https://www.rollingstone.com/culture/culture-features/drug-w... https://oilprice.com/Energy/Crude-Oil/Nigerias-Oil-Theft-Epidemic.html https://oilprice.com/Energy/Crude-Oil/Nigerias-Oil-Theft-Epi...
samstave 8y ago
Would this be the same flaring off that one sees on Oil Rigs? -- I wonder if @RDL would be inclined to speak on the idea of floating a data-barge comprised of the sea-based-data-tubes that Gates has been funding (Project Natik) https://gizmodo.com/microsofts-newest-data-center-is-a-giant-metal-can-at-t-1826606291 https://gizmodo.com/microsofts-newest-data-center-is-a-giant...

Nasrudith 8y ago

Disclaimer - couldn't read more than an introductory two paragraphs - this may be addressed in text. I wonder why they don't just start stockpiling liquefied natural gas and wait for the value to eventually rise. Even if prices don't rise sufficiently to sell it could potentially be vertically integrated to substitute for burning coal for input heat in oil refineries. Perhaps it is related to the liquification process costs plus storage.

D_Alex 8y ago
One big problem is that the production usually starts at a high rate, then declines quite rapidly - say 20-50% per year - for the remainder of the field life. If you design for the peak rate, the plant will be expensive and underutilized. If you design for a lower rate, the plant will economically insignificant and you still have to flare a lot of the gas initially.
- Nasrudith 8y ago
  Ah so even if they could make some sort of mobile liquifier (no guarantees of something sufficently big like that being energy efficient net let alone financially a good investment) it would be a logistical pain.
samstave 8y ago
I wonder if it would be because storing/creating liguified natural gas in large quantities requires an incredibly complex, expensive system to do so? (I am speculating on the economic of this based on this guy: https://www.telegraph.co.uk/finance/newsbysector/transport/10496977/Worlds-largest-ship-bigger-than-Empire-State-Building-launches.html https://www.telegraph.co.uk/finance/newsbysector/transport/1...

cat199 8y ago

"The resulting greenhouse-gas emissions are equivalent to the daily exhaust emitted by about 2.7 million cars" why i find those seriously concerned about carbon footprint from eating meat a bit strange..