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serious question preoccupying ; CAN NATURAL GAS BREAK OUT?
Is Natural Gas About to Break Higher? 10 comments
by: Thomas MacLeod July 20, 2009 | about: CHK / EEP / GAS / KMP /
OIH / SE / SRE / UNG / WMB
Thomas MacLeod picture Thomas MacLeod
thought you may find it relevant..
Do equity markets lead commodity markets? Or perhaps more precisely do
commodity equities lead the underlying commodities themselves? Our
experience suggests that commodity equities lead the behaviour of
commodities. Towards the end of last year we noticed that oil and gas
services stocks bottomed even in the face of a plummeting oil price.
This suggested to us that the downside in crude was very limited and
that one should be looking at buying into the falling crude price.
We now find a similar situation arising with natural gas and natural
gas stocks. Oil and Gas pipeline stocks such as Enbridge (EEP),
Williams Co (WMB), Spectra Energy (SE), and Kinder Morgan (KMP), now
appear to have formed solid bases and more importantly they remain
virtually unchanged this year even when natural gas itself has fallen
by some 40%.
More compelling from a fundamental perspective their valuations do not
appear to be demanding. So there are two ways of playing “natural
gas”. One can buy the underlying commodity itself (either via futures
or the ETF UNG) or one can play the next best thing – natural gas
stocks.
However, if one was somewhat bearish on natural gas itself why not
consider pipeline stocks or other natural gas plays (like Chesapeake
(CHK), Nicor (GAS), or Sempra (SRE))?
Of course there is another option and that is oil and gas drillers/
services themselves (OIH). Which option will prove to be the most
profitable? Of course only time will tell!
We have seen finer technical patterns before, however, from a long
term perspective the three charts above appear bullish enough for us.
They appear to have done enough work to establish a strong base from
which we see material upside. This action should drag natural gas
higher.
The foregoing "analysis" may seem rather simplistic but often that is
all that you need especially when you have time on your side.
Disclosure: Long UNG, CHK, KMP, SE, OIH
U.S. Gas Fields Go From Bust to Boom
By BEN CASSELMAN
APRIL 30, 2009
http://online.wsj.com/article/SB124104549891270585.htmlCADDO
PARISH, La. -- A massive natural-gas discovery here in northern Louisiana heralds a big shift in the nation's energy landscape. After an era of declining production, the U.S. is now swimming in natural gas.
Even conservative estimates suggest the Louisiana discovery -- known as the Haynesville Shale, for the dense rock formation that contains the gas -- could hold some 200 trillion cubic feet of natural gas. That's the equivalent of 33 billion barrels of oil, or 18 years' worth of current U.S. oil production. Some industry executives think the field could be several times that size.
"There's no dry hole here," says Joan Dunlap, vice president of Petrohawk Energy Corp., standing beside a drilling rig near a former Shreveport amusement park.
One industry-backed study estimates the U.S. has more than 2,200 trillion cubic feet of gas waiting to be pumped, enough to satisfy nearly 100 years of current U.S. natural-gas demand.
The discoveries have spurred energy experts and policy makers to start looking to natural gas in their pursuit of a wide range of goals: easing the impact of energy-price spikes, reducing dependence on foreign oil, lowering "greenhouse gas" emissions and speeding the transition to renewable fuels.
A climate-change bill being pushed by President Barack Obama could boost reliance on natural gas. The bill, which could emerge from the House Energy and Commerce Committee in May, is expected to set aggressive targets for reducing emissions of carbon dioxide, the most prevalent man-made greenhouse gas.
Meeting such goals would require quickly moving away from coal-fired power plants, which account for substantial carbon emissions. President Obama wants the U.S. to rely more on renewable energy such as wind and solar power, but those technologies aren't ready to shoulder more than a fraction of the nation's energy burden. Advocates for natural gas argue that the fuel, which is cleaner than coal, would be a logical quick fix. In addition, billionaire energy investor T. Boone Pickens has been touting natural gas as an alternative to gasoline and diesel for cars and trucks.
"The availability of natural-gas generation enables us to be much more courageous in charting a transition to a low-carbon economy," says Jason Grumet, executive director of the National Commission on Energy Policy, who was a senior adviser to President Obama during the campaign.
Just three years ago, the conventional wisdom was that U.S. natural-gas production was facing permanent decline. U.S. policy makers were resigned to the idea that the country would have to rely more on foreign imports to supply the fuel that heats half of American homes, generates one-fifth of the nation's electricity, and is a key component in plastics, chemicals and fertilizer.
But new technologies and a drilling boom have helped production rise 11% in the past two years. Now there's a glut, which has driven prices down to a six-year low and prompted producers to temporarily cut back drilling and search for new demand.
The natural-gas discoveries come as oil has become harder to find and more expensive to produce. The U.S. is increasingly reliant on supplies imported from the Middle East and other politically unstable regions. In contrast, 98% of the natural gas consumed in the U.S. is produced in North America.
Coal remains plentiful in the U.S., but is likely to face new restrictions. To produce the same amount of energy, burning gas emits about half as much carbon dioxide as burning coal.
Natural gas has never played more than a supporting role in the nation's energy supply. Crude oil, refined into gasoline or diesel, fuels nearly all U.S. cars or trucks. Coal is the dominant fuel for generating electricity.
Natural-gas production in the U.S. peaked in the early 1970s, then fell for a decade due to weak prices and declining gas fields in Texas, Louisiana and elsewhere. Production bounced back in the 1990s with the discovery of new fields in New Mexico and Wyoming, but by 2002, output was falling again -- this time, most experts thought, for good. Believing the U.S. would soon need to import liquefied natural gas from overseas, companies such as ConocoPhillips, El Paso Corp. and Cheniere Energy Inc. spent billions on terminals, pipelines and storage facilities.
The supply fears drove up prices, which spurred innovation. Oil-and-gas companies had known for decades that there was gas trapped in shale, a nonporous rock common in much of the U.S. but considered too dense to produce much gas.
In the 1980s, Texas oilman George Mitchell began trying to produce gas from a formation near Fort Worth, Texas, known as the Barnett Shale. He pumped millions of gallons of water at high pressure down the well, cracking open the rock and allowing gas to flow to the surface.
Oklahoma City-based Devon Energy Corp. bought Mr. Mitchell's company in 2002. It combined his methods with a technique for drilling straight down to gas-bearing rock, then turning horizontally to stay within the formation. Devon's first horizontal wells produced about three times as much gas as traditional vertical wells.
The development of the Barnett Shale almost single-handedly reversed the decline in U.S. natural-gas production. Last year, the Barnett produced four billion cubic feet of gas a day, making it the largest field in the U.S. Other companies such as Newfield Exploration Co., Southwestern Energy Co. and Range Resources Corp. found shale fields across the U.S.
One of the most aggressive companies was Oklahoma City-based Chesapeake Energy Corp., which got into the Barnett a couple of years behind cross-town rival Devon, and was an early entrant into the second big U.S. field, the Fayetteville Shale in Arkansas. In 2005, Chesapeake Chief Executive Aubrey McClendon sent teams of geologists across the country with a mission: Find the next Barnett. Less than two years later, they told him they had it, in Louisiana.
The Haynesville Shale is centered in northern Louisiana, one of the country's oldest oil- and gas-producing regions. Wildcatters had explored beneath the lush cow pastures and cotton fields as far back as the 1870s. Shreveport, the region's largest city, saw decades of booms and busts until the 1980s, when a glut of cheap oil from overseas all but killed the region's oil industry.
Oil companies knew about the Haynesville Shale, but it was considered a less viable prospect than the Barnett. The shale lies 10,000 or more feet below ground, where high pressure and 300-degree temperatures are enough to fry high-tech drilling equipment.
But in 2006, Chesapeake drilled an exploratory well and decided the results were promising enough to justify the higher cost of drilling in such harsh conditions. By late 2007, Mr. McClendon says, "we knew that we had a tiger by the tail."
In March 2008, as oil and gas prices were soaring, Chesapeake went public with its findings. The rush was on: Dozens of companies dispatched agents to the area to lease land for drilling, turning farmers and ranchers into millionaires overnight.
"There was excitement in the air," recalls Jeffrey Wellborn, a Shreveport resident who sits on the board of the local Sierra Club. "You thought everyone in the world had won the lottery."
The frenzy marked the peak of a nationwide drilling boom that was fueled by a combination of soaring energy prices and easy credit. It didn't last. Between July and October, oil and gas prices fell by more than 50%, and kept falling.
The weakening economy eroded demand for both oil and gas. Natural gas, unlike oil, suffered from a supply glut. U.S. gas production rose 7.2% last year, while oil production fell 1.9%. As a result, oil prices are up 12% since the start of 2009. Natural-gas prices have fallen 41% to their lowest since 2002.
Gas producers saw their profits evaporate and share prices slump. Liquefied-natural-gas imports plunged, leaving import terminals nearly idle. Worried about a glut, companies cut back sharply on drilling and formed a lobbying group to try to boost demand.
The growing supply created opportunities for policy makers and environmentalists, who saw natural gas as a possible solution to the nation's energy problems. Some groups suggested burning more gas and less coal for power generation. Others favor its use in vehicles.
Mr. Pickens has spent millions promoting an energy plan that aims to, among other things, convert thousands of big-rig trucks to run on natural gas. Mr. Pickens has large investments in natural gas and stands to benefit if his plan is adopted. In TV ads, Internet videos and speeches, he emphasizes a different goal: reducing U.S. dependence on foreign oil.
Mr. Pickens arrived for a recent speech in Dallas in a natural-gas-fueled Honda Civic with a bright blue "Pickens Plan" logo. He told a packed auditorium that the U.S. is importing two-thirds of its oil even as the country is "absolutely overwhelmed with natural gas." If the reverse were true, he said, he would favor burning oil.
Some environmentalists have embraced Mr. Pickens's plan as a way to fight climate change. Carl Pope, executive director of the Sierra Club, says he sees natural gas as a "bridge fuel" that could help the U.S. burn less coal and oil until renewable sources of energy are ready to take over.
The dual message of energy security and environmental responsibility has helped Mr. Pickens win powerful allies, including Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and dozens of elected officials from both parties. A bipartisan bill providing tax incentives for natural-gas cars looks likely to pass this year.
Not everyone shares Mr. Pickens's enthusiasm for natural-gas vehicles. Major users of natural gas, such as utilities and chemicals companies, are concerned the plan would drive up prices -- an outcome that would benefit producers.
Energy Secretary Steven Chu and some other policy makers have expressed doubts about the practicality of retrofitting hundreds of thousands of service stations to offer natural gas. Some environmental groups, including the Natural Resources Defense Council, have argued that natural gas is better used to replace coal for power generation, and that cars should run on electricity generated by the sun, wind and natural gas.
Market forces are already helping natural gas make inroads against coal and oil. Gas is now cheaper than coal in many parts of the country, leading utilities to burn more gas. Of the 372 power plants expected to be built in the U.S. over the next three years, 206 will be fired by gas and just 31 by coal, according to the Energy Information Administration.
Natural gas is gaining market share far more slowly in transportation. Earlier this year, AT&T announced it would convert up to 20% of its truck fleet to run on natural gas, largely because it has been cheaper than gasoline in recent years. Cities including New York, Los Angeles and Atlanta have converted part of their bus fleets to run on natural gas, for air-quality reasons.
Shreveport could be the next city to make the switch. In March, Mayor Cedric Glover announced that the oil capital turned natural-gas boomtown would abandon diesel and convert its bus fleet to natural gas.
—Russell Gold contributed to this article.
Write to Ben Casselman at ben.casselman@wsj.com
I was LMAO at your Confucius Says post over on the joke board and couldn't post on that board so thought I'd post over hear on your board. Take care
************************************************
I've got one more for ya
Confucius Says:
*~*~*~*~*~*~*~*~*~*
Man who go to bed with itchy butt,
Wake up with smelly hand! lol
SIGO.PK just acquired wells in Maverick Oil Basin adjacent to TXCO.
Natural gas distributed throughout the Marcellus black shale in northern Appalachia could conservatively boost proven U.S. reserves by trillions of cubic feet if gas production companies employ horizontal drilling techniques, according to a Penn State and State University of New York, Fredonia, team.
"The value of this science could increment the net worth of U.S. energy resources by a trillion dollars, plus or minus billions," says Terry Engelder, professor of geosciences, at Penn State.
The Marcellus shale runs from the southern tier of New York, through the western portion of Pennsylvania into the eastern half of Ohio and through West Virginia. In Pennsylvania, the formation extends from the Appalachian plateau into the western valley and ridge. This area has produced natural gas for years, but the Marcellus shale, a deep layer of rock, is officially identified as holding a relatively small amount of proven or potential reserves. However, many gas production companies are now interested in the Marcellus.
Engelder, working with Gary Lash, professor of geoscience, SUNY Fredonia, has conservatively estimated that the Marcellus shale contains 168 trillion cubic feet of natural gas in place and optimistically suggests that the amounts could be as high as 516 trillion cubic feet.
"Conservatively, we generally only consider 10 percent of gas in place as a potential resource," says Engelder. "The key, of course, is that the Marcellus is more easily produced by horizontal drilling across fractures, and until recently, gas production companies seemed unaware of the presence of the natural fractures necessary for magnifying the success of horizontal drilling in the Marcellus."
The U.S. currently produces roughly 30 trillion cubic feet of gas a year, and these numbers are dropping. According to Engelder, the technology exists to recover 50 trillion cubic feet of gas from the Marcellus, thus keeping the U.S. production up. If this recovery is realized, the Marcellus reservoir would be considered a Super Giant gas field.
Engelder, who has studied this area of the U.S. for most of his career and began looking into fractures under a National Science Foundation grant 25 years ago, has identified and mapped natural fractures in the Marcellus shale. He and Lash will present some of their recent work at the 2008 American Association of Petroleum Geologists Annual Convention and Exhibition this spring.
The researchers look at the patterns of fractures in the shale and determine which are important for gas production. Fractures that correlate with the folding of the ridge and valley system are less common in black shale. However, because of their orientation, the fractures that formed prior to the folding will release gas if the wells cross the fracture zones.
These fractures, referred to as J1 fractures by Engelder and Lash, run as slices from the northeast to the southwest in the Marcellus shale and are fairly close together. While a vertical well may cross one of these fractures and other less productive fractures, a horizontally drilled well aimed to the north northwest will cross a series of very productive J1 fractures.
"It takes $800,000 to drill a vertical well in the Marcellus, but it takes $3 million to drill a horizontal well," says Engelder.
Companies that drill gas wells need to be certain that horizontal drilling will produce the gas they expect and the work by Engelder and Lash suggests that it will.
"We know that the Marcellus shale appears as an outcrop near Batavia, N.Y., east of Buffalo," says Engelder. "And we can see the fractures in the Marcellus in the exposed sections of the ridge and valley areas to the southeast. Because we see them going through the folded areas, we know they were there before the folding. If it happened earlier, then we know they have to be in the intervening basin as well."
The natural fractures in the Marcellus shale are the key to recovering large amounts of gas. As heavily organic sediments were laid down 365 million years ago, the black shale of the Marcellus formed. As the organic material decayed and degraded, methane and other components of natural gas formed and dispersed through the pores in the rock. About 300 million years ago, the pressure of the gas caused fractures to form in the shale. It was not until 280 million years ago that the eastern portion of Pennsylvania was pushed into the folding of the ridge and valley province that makes up that area. Gas that occurs in pockets underground is considered a conventional reservoir; gas that is distributed throughout the rock, like the Marcellus, is called an unconventional reservoir.
The Penn State-Fredonia approach is not restricted to production of the Marcellus shale, but can be applied to any gas-bearing shale with this type of fracture. Because the approach begins with a vertical well and then drills horizontally in the direction that will crosscut the productive fractures, old vertical wells can be reused.
"We can go back to wells that are already drilled and played out, and then drill horizontal from there," says Engelder. "Reusing old wells has both economic and environmental value."
Cooling natural gas to about -260°F at normal pressure results in the condensation of the gas into liquid form, known as Liquefied Natural Gas (LNG). LNG can be very useful, particularly for the transportation of natural gas, since LNG takes up about one six hundredth the volume of gaseous natural gas. While LNG is reasonably costly to produce, advances in technology are reducing the costs associated with the liquification and regasification of LNG. Because it is easy to transport, LNG can serve to make economical those stranded natural gas deposits for which the construction of pipelines is uneconomical.
LNG Delivery Facility with Tanker
Source: NGSA
LNG, when vaporized to gaseous form, will only burn in concentrations of between 5 and 15 percent mixed with air. In addition, LNG, or any vapor associated with LNG, will not explode in an unconfined environment. Thus, in the unlikely event of an LNG spill, the natural gas has little chance of igniting an explosion. Liquification also has the advantage of removing oxygen, carbon dioxide, sulfur, and water from the natural gas, resulting in LNG that is almost pure methane.
LNG is typically transported by specialized tanker with insulated walls, and is kept in liquid form by autorefrigeration, a process in which the LNG is kept at its boiling point, so that any heat additions are countered by the energy lost from LNG vapor that is vented out of storage and used to power the vessel.
The increased use of LNG is allowing for the production and marketing of natural gas deposits that were previously economically unrecoverable. Although it currently accounts for only about 1 percent of natural gas used in the United States, it is expected that LNG imports will provide a steady, dependable source of natural gas for U.S. consumption. According to the EIA, the U.S. imported 0.17 Tcf of natural gas in the form of LNG in 2002. LNG imports are expected to increase at an average annual rate of 15.8 percent, to levels of 4.80 Tcf of natural gas by 2025.
Liquefied natural gas (LNG) imports represent an increasingly important part of the natural gas supply picture in the United States. LNG takes up much less space than gaseous natural gas, allowing it to be shipped much more efficiently.
Deep Sea Drilling Amendment Will Be Good for
Economy & Environment
Natural Gas > Far-Offshore Drilling Legislation Earns Praise > Will Benefit Taxpayers, U.S. Economy
Natural Gas Production Gains Should Lead to Market Stability this Winter
Crude has since slid close to a 17- month low on declining demand for fuel in the US, the world's largest importer
The Pickens Plan
T. Boone Pickens made billions of dollars in the oil business. Today, he’s selling a plan to get America off foreign oil dependence, turning instead to natural gas and wind power
To bad it does not hit Centre County as we own 8 1/2 acres & it is shale in Union Twp
Unconventional natural gas reservoir in Pennsylvania poised to dramatically increase US Production
Public release date: 17-Jan-2008
Contact: A'ndrea Elyse Messer
aem1@psu.edu
814-865-9481
Penn State
http://tinyurl.com/2c7q4x
Dr. Terry Engelder, professor of geosciences, Penn State shows black shale with markings indicating fracturing.
Natural gas distributed throughout the Marcellus black shale in northern Appalachia could conservatively boost proven U.S. reserves by trillions of cubic feet if gas production companies employ horizontal drilling techniques, according to a Penn State and State University of New York, Fredonia, team.
"The value of this science could increment the net worth of U.S. energy resources by a trillion dollars, plus or minus billions," says Terry Engelder, professor of geosciences, at Penn State.
The Marcellus shale runs from the southern tier of New York, through the western portion of Pennsylvania into the eastern half of Ohio and through West Virginia. In Pennsylvania, the formation extends from the Appalachian plateau into the western valley and ridge. This area has produced natural gas for years, but the Marcellus shale, a deep layer of rock, is officially identified as holding a relatively small amount of proven or potential reserves. However, many gas production companies are now interested in the Marcellus.
Engelder, working with Gary Lash, professor of geoscience, SUNY Fredonia, has conservatively estimated that the Marcellus shale contains 168 trillion cubic feet of natural gas in place and optimistically suggests that the amounts could be as high as 516 trillion cubic feet.
"Conservatively, we generally only consider 10 percent of gas in place as a potential resource," says Engelder. "The key, of course, is that the Marcellus is more easily produced by horizontal drilling across fractures, and until recently, gas production companies seemed unaware of the presence of the natural fractures necessary for magnifying the success of horizontal drilling in the Marcellus."
The U.S. currently produces roughly 30 trillion cubic feet of gas a year, and these numbers are dropping. According to Engelder, the technology exists to recover 50 trillion cubic feet of gas from the Marcellus, thus keeping the U.S. production up. If this recovery is realized, the Marcellus reservoir would be considered a Super Giant gas field.
Engelder, who has studied this area of the U.S. for most of his career and began looking into fractures under a National Science Foundation grant 25 years ago, has identified and mapped natural fractures in the Marcellus shale. He and Lash will present some of their recent work at the 2008 American Association of Petroleum Geologists Annual Convention and Exhibition this spring.
The researchers look at the patterns of fractures in the shale and determine which are important for gas production. Fractures that correlate with the folding of the ridge and valley system are less common in black shale. However, because of their orientation, the fractures that formed prior to the folding will release gas if the wells cross the fracture zones.
These fractures, referred to as J1 fractures by Engelder and Lash, run as slices from the northeast to the southwest in the Marcellus shale and are fairly close together. While a vertical well may cross one of these fractures and other less productive fractures, a horizontally drilled well aimed to the north northwest will cross a series of very productive J1 fractures.
"It takes $800,000 to drill a vertical well in the Marcellus, but it takes $3 million to drill a horizontal well," says Engelder.
Companies that drill gas wells need to be certain that horizontal drilling will produce the gas they expect and the work by Engelder and Lash suggests that it will.
"We know that the Marcellus shale appears as an outcrop near Batavia, N.Y., east of Buffalo," says Engelder. "And we can see the fractures in the Marcellus in the exposed sections of the ridge and valley areas to the southeast. Because we see them going through the folded areas, we know they were there before the folding. If it happened earlier, then we know they have to be in the intervening basin as well."
The natural fractures in the Marcellus shale are the key to recovering large amounts of gas. As heavily organic sediments were laid down 365 million years ago, the black shale of the Marcellus formed. As the organic material decayed and degraded, methane and other components of natural gas formed and dispersed through the pores in the rock. About 300 million years ago, the pressure of the gas caused fractures to form in the shale. It was not until 280 million years ago that the eastern portion of Pennsylvania was pushed into the folding of the ridge and valley province that makes up that area. Gas that occurs in pockets underground is considered a conventional reservoir; gas that is distributed throughout the rock, like the Marcellus, is called an unconventional reservoir.
The Penn State-Fredonia approach is not restricted to production of the Marcellus shale, but can be applied to any gas-bearing shale with this type of fracture. Because the approach begins with a vertical well and then drills horizontally in the direction that will crosscut the productive fractures, old vertical wells can be reused.
"We can go back to wells that are already drilled and played out, and then drill horizontal from there," says Engelder. "Reusing old wells has both economic and environmental value."
BEIJING (AFP) - China has discovered huge gas reserves in the southwestern province of Sichuan, hoping that the find will help ease growing concerns about energy security, state media reported Monday.
A total of 3.8 trillion cubic metres (133 trillion cubic feet) of natural gas deposits have been found in the western part of the Sichuan Basin, the China Daily said, citing officials in Dazhou city, near the reserve.
The discovery is equivalent to about 60 years of China's total production at current output levels.
The deposits include proven exploitable reserves of a newly-discovered 244 billion cubic metres of gas alongside the 356 billion cubic metres in Puguang gas field, which was announced in March, the report said.
It has become the largest gas field in the country, topping the Sulige gas field in north China's Inner Mongolia Region discovered last year with exploitable reserves of 533.6 billion cubic metres, the newspaper said.
China plans to boost its annual natural gas output from 49.3 billion cubic metres in 2005 to 92 billion cubic metres by 2010, as consumption is expected to more than double the 2005 figure to top 100 billion cubic metres by 2010.
The government has strengthened exploration efforts in a bid to feed the country's brisk economic expansion that has seen double-digit growth for four consecutive years.
Last week, a large gas field with reserves of nearly 30 billion cubic metres was discovered in Karamay in the Xinjiang region in the northwest.
A major oil field, the Jidong Nanpu oil field in Bohai Bay in the north, has also been announced recently.
The oil field is the largest discovery in the country in more than four decades, with expected reserves reaching one billion tonnes or about 7.35 billion barrels.
U.S. Natural Gas Markets
Prices. The Henry Hub natural gas price is projected to average $7.58 per thousand cubic feet (mcf) in 2007 compared with $7.10 in the previous Outlook (Henry Hub Natural Gas Price). For 2008, the Henry Hub spot price is projected to average $7.86 per mcf.
Production. Domestic dry natural gas production is expected to increase by 2.4 percent in 2007, a slight increase from production growth in 2006, as drilling for natural gas continues at historically high levels. Net imports of natural gas in 2007 are projected to drop for the second consecutive year, though a smaller decline is expected in 2007 (2.0 percent) than was observed in 2006 (5.0 percent). Pipeline imports from Canada are expected to fall by about 180 billion cubic feet (bcf) in 2007. However, EIA still expects total liquefied natural gas (LNG) imports to increase from their 2006 level of 580 bcf to 770 bcf in 2007. LNG import projections remain strong for 2008 as well, expanding by 39 percent and eclipsing the 1 trillion-cubic-foot mark.
Inventories. On February 23, 2007, working gas in storage stood at an estimated 1,733 bcf. Due to cold weather, a record amount of natural gas was withdrawn from storage in February. As a result, after 13 consecutive months of year-over-year increases, February stocks dropped below the year-ago level. Stocks are 263 bcf below the level at this time last year, but are still 179 bcf above the 5-year average (U.S. Working Natural Gas in Storage).
Consumption. A return to normal temperatures in 2007 is expected to drive strong year-over-year growth in residential consumption of natural gas. A first quarter comparison of EIA’s estimated residential consumption shows a 14-percent increase from 2006 to 2007. Taking the year as a whole, residential consumption is expected to increase 10.8 percent in 2007. Similarly, commercial and industrial sector consumption are expected to increase by 6.3 and 1.9 percent, respectively, in 2007 because of a return to normal weather, lower commercial prices, and growing industrial output. All three sectors are expected to show small changes in 2008: residential consumption staying essentially flat and commercial and industrial consumption increasing by 0.6 and 1.5 percent, respectively. Total natural gas consumption growth for 2007 and 2008 is projected to increase by 2.9 and 1.8 percent, respectively, after falling by 1.7 percent in 2006 (Total U.S. Natural Gas Consumption Growth).
About 2 move...float is very low...........
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