EVERYTHING YOU WANTED TO KNOW ABOUT NATURAL GAS BUT WERE AFRAID TO ASK

We could have a French style body count this winter and gasoline may cost too much to transport the bodies to the morgue.
Unlike what I and many others believed, retail gasoline prices aren't coming down any time soon. Iraq oil will be back on line September 4th and the smart money is betting the pipeline will be blown up no later than September 6th. It is the failure to bring this promised oil into the market that is causing the current high crude prices (gasoline too).

Natural gas is an even bigger problem. Enviros have stopped all drilling for the fields upon fields of natural gas available in this country. The normal price has been under $2. Right now it is over $5 for all winter months and it will go to $8 if we have a freeze with no new supply. If you live in a cold climate outside the heating oil burning east coast, you use natural gas. You are fucked. No. You are raped. Your heating bills could triple. You could actually run out of natural gas.

There are problems in getting correct inventory numbers on natural gas. This is because as a gas the volume expands in hot weather and contracts in cold weather. So a mathematical formula is brought into play to measure it. The real interesting thing is Liquified Natural Gas, natural gas made so cold that the volume shrinks. Even more interesting is that once "re-gassified" it can be pumped BACK INTO THE GROUND and stored that way, instead of in some big open air tank. BUT, BUT, BUT you meant the liquid gas has to be "re-gassified", like warmed up so it can be used? Thaaaaat's right and here come the enviro wackos and the NIMBYS

LNG re-gasification terminals are viewed as large, obstructive and generally displeasing to the eye for local residents and businesses. Although designs to bury such large facilities underground have been forthcoming, general apprehension related to the "don't build in my backyard" philosophy still emphatically exists. So, like oil refineries, we don't have the capacity to re-gassify as we should.

Even more weird, since you can store the crap underground by pumping it back into the ground, some companies have done just that. And guess what? The government has no idea how much is sitting in this type of storage right now. Neither does API. So.....is there enough gas for the winter or isn't there?, that is the question. Right now NOBODY knows and that is one of the reasons traders left for holiday one day early.

Have a nice winter.

Oh, and did I mention a terrorist attack? One on a re-gassification plant would cause an explosion like your wife catching you with another man. Well, not quite. Even though an LNG explosion of an entire ship would only be bad, the enviros are picturing it as a mushroom cloud explosion capable of killing hundreds of thousands.

And did I mention FERC? That's a government regulatory body that won't let companies that build and own re-gassification plants SELL their product to anyone other than a FERC desiginated buyer. Meaning no free market. Meaning no profits unless the government says they can have a profit. And the government decides how much. Sort of hurts investment too.

Have a nice year and may you spend Christmas in a bathing suit.