GNUBEE (29.03)

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Frack Me?, No Frack YOU!

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July 12, 2011 – Comments (6) | RELATED TICKERS: FRA , K , N

So I found myself watching a town hall meeting for fracking in PA last night. (it was recorded from last month) And basically it could be summed up as people spening a few hours telling each other to "frack off"

Yeah I know State Cable Networks usually have great programing, like televised senate proceedings and other "must see" TV. Basically there were both poles of the issue. Those who work for or are benefiting from the gas wells, and those who have been negatively effected, or fear the the area will become a toxic wasteland.

The meeting made for much better TV than any Mark Burnett Series. You had the "Been in the industry for 50 years, my daddy was a gasman, and his pappy before him" speakers. the "Science shows gas drilling has caused no ill effects (and the science shows that it has caused three eyed fish) sets. Then there is the "I had no job, now I can raise my family back in PA" group. The "I've personally suffered many ill effects from the wells group", who were countered with speakers who said fracking has never contaminated a well. The farmers who stated the birth defects of their cattle, and the multiple speakers asking the " Washington advisory panel" to step down for taking monies from the gas industry. While this panel "had the balls to say they are impartial" (that guy was good)

I guess what made this entertaining (some speakers were intriguing too) was the hecklers, as well as the speakers who passionatley discussed the dangers of fracking as well as the lack of regulation. While the guy in the back who simply shouted "BOO" was nice, the guy waiving 5 fanned out dollar bills in the corner of the camera when a pro-gas speaker had the mike gets the prize for best heckler. There was even one woman I fully expected to open her purse and start hurling cats at the panel, she was definitley amped up to speak. However one speaker stood out the most to me. It was the one who stated that this gas is not the "bridge to the future, less foreign oil and self depenence" that it is touted as.

She stated the gas has already been spoken for by China, India and Sovereign wealth funds. Now here's where I have to do some research myself. but I figured I'd see what the collective knows.

Does anyone know how much of that is true? What percentage of Marcellus gas is slated for export? Because it sounds like there is money to be made for sure, but I'd want to know if (probaly more of when) this gas is extracted who's going to be buying it. In a global economy I'm always looking for goods that are desired on a global arena, and lets face it, everyone needs energy.

The top players include, Range Resources, Chesapeake, EXCO,Andarko,XTO,Rex Energy, Cabot, and EOG.

In closing, sometimes its good to not watch enough TV to know the channels and aimlessly scroll through the 100's, because sometimes you get lucky and stumble upon real Gem's of current American debates (no not the Deficit/budget talks).

6 Comments – Post Your Own

#1) On July 12, 2011 at 12:35 PM, chk999 (99.99) wrote:

She stated the gas has already been spoken for by China, India and Sovereign wealth funds.

This really makes no sense. They would have to buy mineral rights on the acreage and then build LNG export facilites. I haven't heard about them doing either.

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#2) On July 12, 2011 at 1:15 PM, GNUBEE (29.03) wrote:

The arguement as I understand it is that heavy foreign investment in the extraction and export facilities equates to the "foreigners stealing our gas". So China et al. wouldnt buy the town, just invest in the companies that already hold leases.

I'm more concerned with who's going to buy all this gas? Chesapeake just announced they are spending a billion dollars to help ramp up domestic consumption. I have also heard the argument that all this gas has no where to go. If it goes overseas, fine with me. I just want to be sure there's a buyer, not just the same buyers at now depressed (supply) prices.

I've said before that we should sell it to the rest of the world, at least it means we have a valuable and in demand product.

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#3) On July 12, 2011 at 2:07 PM, motleyanimal (99.25) wrote:

It is unlikely that any Marcellus gas will be exported. It sits between 2 huge markets, the northeast and midwest states, so why sell it someplace else? Aside from that, there are no liqufication plants in the region, although there is speculation that some import terminals could be converted. Here is an interesting article below. It is from a left oriented human rights and environmental group, but is essentially factual.

http://www.pressaction.com/news/weblog/full_article/gasexport07032011/

I doubt that the statement: "the gas has already been spoken for by China, India and Sovereign wealth funds." has any truth to it.

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#4) On July 12, 2011 at 2:44 PM, GNUBEE (29.03) wrote:

Thanks Naotomas,

It would seem then that CHK's recent annoucement of needing to spur domestic consumption would jive with an inability (or lack of desire) to export. My searcing today has yielded about the same conclusion.

I also read that China has thier own shale reserves, but is getting involved in the hopes to aquire the technology and tecniques necessary to capitalize them.

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#5) On July 12, 2011 at 8:05 PM, awallejr (84.38) wrote:

Well LNG was given approval to export. And I suspect what that one lady meant was that the gas will be sold over there more than likely (since you can get 2-3 times what you get domestically).

I still have questions about how much gas really is there that can be drilled. Correct me if I am wrong but basically you are trying to squeeze gas trapped between the cracks in shale formations. Sounds like these wells literally could burn out fast.

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#6) On July 13, 2011 at 4:23 PM, smartmuffin (< 20) wrote: