5 ms·

I wonder at what price gas needs to be for this to be profitable?

by plehoux 12y ago

mabbo 12y ago
They aren't making more fossil fuels. Wait long enough, just about anything to extract them efficiently becomes profitable.
- lkrubner 12y ago
  "They aren't making more fossil fuels." -- Well, they are, just rather slowly. All the fossil fuels we use now have been created since the Cambrian and most have been created since the start of the Mesozoic. And if we are willing to wait another 300 million years, we can have yet another 2 centuries of vigorous economic growth based on fossil fuel consumption. In fact, we can probably have 200 good years, every 300 million years, for as long as the Earth lasts.
  - bdamm 12y ago
    2 centuries? I think you may not be including the availability of coal, from which oil can be produced.
  - hughw 12y ago
    Thomas Gold thought it would last a good bit longer. He hypothesized Earth's methane is primordial, dating to the origin of the planet (as with other planets in the solar system). There would be a virtually limitless supply. http://metaresearch.org/publications/bulletin/2007issues/0915/Mrb07cp5.asp http://metaresearch.org/publications/bulletin/2007issues/091...
  - Gravityloss 12y ago
    That's disputed. Carbon storage might have stopped quickly wheen wood devouring fungi evolved. http://news.clarku.edu/news/2012/06/28/findings-point-to-fungi-as-prime-suspects-in-fossil-fuel-mystery/ http://news.clarku.edu/news/2012/06/28/findings-point-to-fun...
  - ars 12y ago
    There are hydrocarbons (methane especially) on other planets. Oil is old algae, but methane might not be - there is a lot of energy in the Earth's core than can make it.
- venomsnake 12y ago
  Tell that to the algae in the ocean. Anyway we won't run out of fossils. But I am hopeful for replacement. We almost tamed production, battery tech is progressing. The only hard place for fossil fuels to be replaced if push comes to shove is air travel.
brc 12y ago
Australia has gone all-in on natural gas, it is in track to be the worlds biggest gas exporter. Is that a problem in the face of falling hydrocarbon prices? Yes, yes it is. This thing probably remains profitable because of the economies of scale. Other projects, pipelines, etc? We shall see. The resources industry accelerates like a race car and stops like and ocean liner. Which leads to decadal wild price swings and associated profitability. But it would have a long expected lifetime and will all add up. The need for gas isn't going anywhere over the long run.
- kristianp 12y ago
  It makes me wonder about the understanding of game theory in the resources industry. Currently big iron ore producers are increasing their output in response to falling prices, hoping to put smaller players out of business, but reducing their own margins in the process due to oversupply.
patrickg_zill 12y ago
LNG prices vary a lot around the globe, so, wherever they are highest is where the LNG ships will deliver it. Right now I believe Japan and other parts of Asia pay a lot more for LNG than say, the USA does. Actually this PDF shows the disparity quite nicely: http://www.ferc.gov/market-oversight/othr-mkts/lng/othr-lng-wld-pr-est.pdf http://www.ferc.gov/market-oversight/othr-mkts/lng/othr-lng-... And with the location of the Prelude's operation being just north of Australia, you will note that the highest-priced areas are quite close by.

I wonder at what price gas needs to be for this to be profitable?

by plehoux 12y ago

I wonder at what price gas needs to be for this to be profitable?

mabbo 12y ago

They aren't making more fossil fuels. Wait long enough, just about anything to extract them efficiently becomes profitable.

lkrubner 12y ago
"They aren't making more fossil fuels." -- Well, they are, just rather slowly. All the fossil fuels we use now have been created since the Cambrian and most have been created since the start of the Mesozoic. And if we are willing to wait another 300 million years, we can have yet another 2 centuries of vigorous economic growth based on fossil fuel consumption. In fact, we can probably have 200 good years, every 300 million years, for as long as the Earth lasts.
- bdamm 12y ago
  2 centuries? I think you may not be including the availability of coal, from which oil can be produced.
- hughw 12y ago
  Thomas Gold thought it would last a good bit longer. He hypothesized Earth's methane is primordial, dating to the origin of the planet (as with other planets in the solar system). There would be a virtually limitless supply. http://metaresearch.org/publications/bulletin/2007issues/0915/Mrb07cp5.asp http://metaresearch.org/publications/bulletin/2007issues/091...
- Gravityloss 12y ago
  That's disputed. Carbon storage might have stopped quickly wheen wood devouring fungi evolved. http://news.clarku.edu/news/2012/06/28/findings-point-to-fungi-as-prime-suspects-in-fossil-fuel-mystery/ http://news.clarku.edu/news/2012/06/28/findings-point-to-fun...
- ars 12y ago
  There are hydrocarbons (methane especially) on other planets. Oil is old algae, but methane might not be - there is a lot of energy in the Earth's core than can make it.
venomsnake 12y ago
Tell that to the algae in the ocean. Anyway we won't run out of fossils. But I am hopeful for replacement. We almost tamed production, battery tech is progressing. The only hard place for fossil fuels to be replaced if push comes to shove is air travel.

brc 12y ago

Australia has gone all-in on natural gas, it is in track to be the worlds biggest gas exporter. Is that a problem in the face of falling hydrocarbon prices? Yes, yes it is. This thing probably remains profitable because of the economies of scale. Other projects, pipelines, etc? We shall see. The resources industry accelerates like a race car and stops like and ocean liner. Which leads to decadal wild price swings and associated profitability. But it would have a long expected lifetime and will all add up. The need for gas isn't going anywhere over the long run.

kristianp 12y ago
It makes me wonder about the understanding of game theory in the resources industry. Currently big iron ore producers are increasing their output in response to falling prices, hoping to put smaller players out of business, but reducing their own margins in the process due to oversupply.

patrickg_zill 12y ago

LNG prices vary a lot around the globe, so, wherever they are highest is where the LNG ships will deliver it. Right now I believe Japan and other parts of Asia pay a lot more for LNG than say, the USA does. Actually this PDF shows the disparity quite nicely: http://www.ferc.gov/market-oversight/othr-mkts/lng/othr-lng-wld-pr-est.pdf http://www.ferc.gov/market-oversight/othr-mkts/lng/othr-lng-... And with the location of the Prelude's operation being just north of Australia, you will note that the highest-priced areas are quite close by.