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Too cheap to use?

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December 08, 2010 – Comments (13) | RELATED TICKERS: UNG

Quick question about natural gas because I don't know too much about it.  I always hear that we have way too much of supply of natural gas.  So then why the hell aren't we using it?  High supply = cheap price...why wouldn't we want to use cheap energy?

13 Comments – Post Your Own

#1) On December 08, 2010 at 7:14 PM, mroc237 (23.35) wrote:

Cause Obama is too busy raping the financial sector and taking the unnecessarily long and painful road back to economic recovery. If he just spent some money in the right places (ie. energy infrastructure, which is desperately needed anyway) then natural gas could take off.And I don't mean take off in an investment sense alone but for the entire country. It would lower energy costs as a whole, create jobs, stimulate economy, create new business for gas powered cars, decrease our dependency on foreign oil and offshore drilling (which I personally don't mind but many do) not to mention being good for the environment and literally hundreds, if not thousands, of small cap gas operations located locally in America.

 But no... Obama is Obama. Too caught up in going after the "bad guys" who make capital gains and dividends by powering America's ventures with their investments. Who knows, maybe he's just looking out for GM's interests. What a jack ass.

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#2) On December 08, 2010 at 7:18 PM, Valyooo (99.63) wrote:

Agreed on all parts, i just dont get the "its too abundant" argument- that seems like a good thing to me.

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#3) On December 08, 2010 at 7:32 PM, mroc237 (23.35) wrote:

That argument is because from the private market no one is willing to put in major investments because due to the enormous supply when we do start using it everyone will be supplying it and prices will be low and uniform. Thus there is little if any advantage for the "first mover" who invests billions of dollars relative to a company that waits.

That's why (and I usually never say this being a libertarian) in this case government should interfere and invest its own money. After all the people who benefit the most are US citizens so taxpayers should probably pay for it at least in form of tax credits for businesses.

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#4) On December 08, 2010 at 7:48 PM, Valyooo (99.63) wrote:

I get that from the business perspective, but i always hear "petroleum is just too cheap not to  use" and simultaneously hear "nat gas is too cheap to use" so I was a little mixed up. Thanks for clarification.

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#5) On December 08, 2010 at 8:01 PM, chk999 (99.98) wrote:

The big deal is conversion costs. You can run motor vehicles on nat gas, but the conversion kit (new gas tank, new plumbing from the tank to the engine, new fuel injectors and changes to the software to run the engine correctly) are kinda expensive for retro fits. We also don't have enough compressed natural gas filling stations and it is costly to add that to an existing filling station.

If people were really convinced that nat gas prices were going to stay low, more new CNG vehicles would be sold and more service station owners would put in the fueling equipment.

The gov could help ramp this up by offering tax breaks on CNG fueling equipment for service stations and mandating that all gov fleet vehicles were CNG. The gov seems to believe in magic pixy dust power, so that isn't happening yet. Maybe in two years. 

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#6) On December 08, 2010 at 11:53 PM, SweetMircha (90.46) wrote:

My thoughts are that like oil which is a precious, non-renewable commodity; so too is natural gas. The price of natural gas has fallen over the past couple of years which is the opposite for oil.

The search for the natural gas has taken on a more difficult method by extracting it the difficult way via shale extraction.  This is long and tedious compared to drilling wells the old fashioned way.

I live on Vancouver Island, BC, Canada.  We pay almost double the price for using natural gas than the mainland of BC (Vancouver) does.  Terasen Gas, the supplier uses the excuse of having to ship it across the Juan De Fuca Strait from Vancouver area to Victoria (the Island), about 10 miles away or so.

With regards to vehicles running on natural gas, I would think that it would be hard on the car's system when it has to use a conversion kit to modify it. I would imagine that the life of the car may be shortened due to it not being specifically built for that use of natural gas.

Just putting my thoughts forward regarding this even though I could be totally wrong in my thinking.

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#7) On December 09, 2010 at 12:35 AM, HarryCaraysGhost (99.74) wrote:

 I gotta go with chk999

That and the fact that Goldman Sachs probably has some oil connections.

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#8) On December 09, 2010 at 12:25 PM, lemoneater (80.61) wrote:

Good question, Valyooo. I asked a similar question myself on saunafool's blog.

http://caps.fool.com/Blogs/time-to-buy-refineries/484448

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#9) On December 09, 2010 at 12:53 PM, Starfirenv (< 20) wrote:

@#7- Hey John et al, Ya think. You must not have seen this.

http://www.washingtonsblog.com/2010/06/chairman-of-goldman-sachs-international.html

Follow the links if you're interested.

Goog 'grooming obama' sometime. The Atlantic ran some interesting stuff.

 

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#10) On December 09, 2010 at 4:08 PM, Starfirenv (< 20) wrote:

And I think GS and BP were th 2 largest camp. contributors to the president. Go figure.

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#11) On December 09, 2010 at 4:47 PM, miteycasey (31.88) wrote:

Goldman Sachs owns 30% oil refinery in Coffeeville, Ks.

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#12) On December 09, 2010 at 6:39 PM, rexlove (99.53) wrote:

This country does sit on large amounts of natural gas. However some environmentalists are against tapping this resource because it usually involves a process called "fracking". (Not sure if I spelled that right.) This can impact ground water wells.

However I think the potential environmental impact of this is nothing compared to the impact of oil and coal. Hopefully Obama will stop worrying about healthcare and clean coal and realize how great natural gas is. 

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#13) On December 10, 2010 at 1:55 AM, HarryCaraysGhost (99.74) wrote:

@9 hey mark, thats awesome that you see my sarcasm, and back it up with links, (I can't belive that dude was the financial planner for the vatican, that would explain some things though)

Congrats on making the playoffs.

In my case "missed it by that much"

Cheers.

 

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