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CSG Discussion
triage
post Posted: Apr 20 2014, 02:26 PM
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In Reply To: mullokintyre's post @ Apr 20 2014, 09:40 AM

Mick

Sounds weird doesn't it but the fundamental need for energy and the huge money involved in supplying that energy seems to be enough to smooth over even the worst of conflicts.

Another example of unlikely bedfellows is where the Iranians are working on putting a gas pipeline through Pakistan to supply India. Wouldn't think those three would have much trust in each other either but it seems that everyone but the pollies in NSW understand that without sufficient energy being made available modern civilisation is simply not viable.

Another point is that Mr Putin only has to put up a plausible case that he can supply gas to the South Koreans for him to be able to affect their long-term plans (if there is even only say a 10% chance of them getting gas from Russia at say half the price of Australian or US gas then it is logical for the South Koreans to delay committing to sourcing all their gas from Australia or the US on the off chance that Russia ends up being able to deliver).



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
mullokintyre
post Posted: Apr 20 2014, 09:40 AM
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In Reply To: triage's post @ Apr 20 2014, 07:46 AM

I can't belive that the South Koreans are so stupid as to believe that the North Koreans in allowing a gas pipeline to pass through their territory on its way to the South will not use it to
(a) Siphon of gas and have the South pay for it
(b) Use sabotage/turning it off as a blackmail weapon .

Just as the Europeans what happens when a pipeline is laid through a third country (Ukraine) from Russia.

Mick



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triage
post Posted: Apr 20 2014, 07:46 AM
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In Reply To: jacsar's post @ Apr 19 2014, 11:40 PM

jacsar

Yes I wish current holders of LNG good luck with its endeavours in the US.

As one American oil company executive told a British parliamentary committee looking at fracking last year not only do operators in the US have a distinct advantage over many other locations in that much of the necessary infrastructure to develop quickly a viable unconventional gas industry is already in place but it has the critical advantage that decisions to either develop or not are made by the various regulatory bodies without undue delay.

We know for a fact that a number of anti-development anti-capitalist groups that operate in Australia have an explicit strategy of not looking to actually block gas developments outright but rather to focus on delaying for as long as possible the approval processes required to get a development up and running. And that is what Barry O'Farrell was guilty of doing with the NSW industry: a series of delays that as good as killed off the sector. Talk about doing the devil's work!! Dogmatic defenders of the NSW Liberal Party can make as many excuses as they like for a conservative government using the game plan developed by Mr Putin to shore up the Russian dominance in the international gas markets but the simple fact is that Mr O'Farrell's dithering is the perfect demonstration of how effective the Russian developed and supported game plan is in hobbling competitors. Similar delays are negatively affecting Dart Energy's attempts at opening up a csg field in Scotland: month after month of regulatory delay is just sucking the life-blood out of the company.

Meanwhile Mr Putin is pushing ahead with plans to build a gas pipeline from eastern Siberia into South Korea through North Korea.

http://www.abc.net.au/news/2014-04-19/russ...ea-debt/5400274

Mr Putin can be accused of being many uncomplimentary things but there is no doubting that he is a strategic thinker of the first order imo.

Perhaps that old scallywag Boone Pickens was on the money when he said in a Motley Fool interview last month that the defining advantage that the US has is that there the landowners are also the owners of the mineral and hydrocabon reserves under their land so that they have a direct interest in having those reserves developed whereas everywhere else the underground assets belong to the state so the landowners are less motivated.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
jacsar
post Posted: Apr 20 2014, 12:59 AM
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In Reply To: triage's post @ Apr 19 2014, 02:01 PM

forgot to say very informative post, triage....thanks

 
jacsar
post Posted: Apr 19 2014, 11:40 PM
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In Reply To: triage's post @ Apr 19 2014, 02:01 PM

from the Alaska despatch link... A traditional LNG project involves development of gas fields, pipelines, a liquefaction plant, storage tanks, a shipping terminal and tankers, as well as regasification terminals to receive the LNG -- a coordinated value chain developed in unison.

But for many U.S. export projects, much of this value chain exists already. The project's core undertaking is just the liquefaction plant, a much smaller investment, and, in part because it's smaller, one that allows newer kinds of companies into the business than the government and international oil companies that have dominated the business. The LNG plant merely would provide a service to the resource owner ó processing, storing and shipping the gas; it would never take ownership of the gas, avoiding the risks of commodity prices.

This is what Aussie firm LNG Ltd is doing at Lake Charles, Louisiana and is reflected in its share price since Feb as certain milestones are met and boxes ticked...still more upside to come. Bye, bye Fisherman's Landing

 
triage
post Posted: Apr 19 2014, 02:01 PM
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I used to subscribe to the blogsite macrobusiness but dropped out after a couple of what I thought were fairly biased non-evidence-based unbalanced offerings by the blogger Leith van Onselen - who uses the handle Unconventional Economist - regarding coal seam gas and fracking. Mr van Onselen apparently is an ex-federal Treasury official and an economic dry which should mean that his level of analysis would be very thorough, fearless and data driven (just about any local economist worth their salt would likely to have been blooded either in the federal Treasury or at the RBA). But at least when it comes to csg, fracking and the Australian gas sector generally it appears to me that Mr van Onselen resorts to the more typical level of analysis available in Oz: that of looking for any shred of evidence to support whatever preconcieved bias you have.

One article in particular was where he called for the prohibition of all unconventional gas development entirely on the basis of his having just watched the "doco" Gasland. That Gasland had been out for several years already suggests that he had actually not been following the debate very closely up till then, and that a primary assertion of Gaslands - that fracking was causing gas to seep into people's home water supplies - had been conclusively shown to have been a distortion of the facts but was not picked up by Mr van Onselen caused me to doubt the quality of the research and analysis he had applied in writing his post.

Another more recent article was based on one of the csg companies being fined $1500 for a minor spill at a drilling site in NSW. Based solely on this finding Mr van Onselen declared that this was sufficient evidence that fracking and unconventional gas extraction was unsafe and should be closed down. One $1500 fine and he calls that a key plank in Australia's energy sector should be boarded up. Meanwhile conventional energy producers like BP and car manufacturers like Toyota and GM and pharmaceutical companies have been fined billions of dollars for errors and faults that threatened the community's health and safety but apparently that does not warrant any calls for us to return to burning wood, riding around in horse-pulled buggies and drays or getting exorcising priests and witch doctors to take back control of our health.

I appreciate that a blogger's lot is not easy in that they have to churn out a regular amount of work addressing contentious issues so as to attract enough traffic to generate momentum. But there does appear to be a clear editorial line regarding csg and fracking at macrobusiness which to me pushes a fixed opinion that is fully against the sector rather than analysis that addresses the pros and cons and strengths and weaknesses of what is happening in Qld.

Here is another recent blogentry by another blogger, David Llewellyn-Smith or Houses and Holes, at macrobusiness that again doesn't let a few facts get in the way of a good prejudice.

http://www.macrobusiness.com.au/2014/04/the-lng-cost-curve/

He shows a chart that identifies that most of the older first-wave LNG liquidification facilities were much cheaper to build than many of the newer second-wave facilities and it just so happens that the second wave of LNG export facilities are mostly in Australia. On that basis he claims that the more expensive facilities - that is much of the Australian industry - cannot compete and are white elephants. As was pointed out in the comments section of that blogentry the blogger conventiently did not point out that the Australian facilities are all being built on the back of signed long-term supply agreements based on the price of oil and that many of the main customers of these facilities have also taken a material equity position in them. Whilst they may be relatively high-cost operations as long as they have customers buying the product at profitable rates then they are hardly white elephants.

One of the main arguments that the bloggers at macrobusiness seem to rely on is that north american gas is ready to flood the international markets at prices so low that the Australian industry will be decimated. But that is assuming that the glut of north american gas is a sure thing and is available now when clearly things are not so certain or clear.

As I have mentioned on another ss thread I think there are doubts about some of the straight-line extrapolations regarding the growth of north american shale gas supplies, including present production levels being partly due to the application by producers of the bygones rule and partly due to producers concentrating on the sweet spots in their fields first up. Another assumption made to argue that north american gas will always maintain material price advantages over Australian LNG supplies is that whilst Australian construction and production prices spiked when the sector started growing a similar thing will not happen in the States.

But here is a Bloomberg article that indicates that even in the US labour (or in their case labor) shortages may impact on the costings of building an export industry.

http://www.bloomberg.com/news/2014-04-17/m...campaign=buffer

Anyway there appears to be some uncertainty even amongst the major players in the sector how things will play out regarding the development of a US export industry that will destroy all other sources of gas. Here is an article written by someone who is admittedly hardly independent who reports on what he saw as the sentiment at a recent international gas industry conference. From this take at least there are signs that the US push into LNG exports is not the done deal that many seem to assume and that all this uncertainty is favouring those players that are already in production or at least are close to completing construction of facilities on the basis of long-term contracts.

http://www.alaskadispatch.com/article/2014...al-lng-industry

I think that the quote from the Calvin and Hobbes cartoon strip that Barry Ritholtz put on his blog site is apt:

QUOTE
"CALVIN: The more you know, the harder it is to take decisive action. Once you become informed, you start seeing complexities and shades of gray. You realize that nothing is as clear and simple as it first appears. Ultimately, knowledge is paralyzing. Being a man of action, I canít afford to take that risk.

HOBBES: Youíre ignorant, but at least you act on it."

-Bill Watterson, Calvin & Hobbes




--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle

Said 'Thanks' for this post: balance  
 


arty
post Posted: Mar 9 2014, 07:27 PM
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QUOTE
How come fraccing and shale oil exploration/production is encouraged in the US and China but not in Australia?

As regards China's concern for environmental issues, look no further than current coverage of smog in Beijing. Or you can buy some catfish raised and caught in their "pristine" rivers.

It's also a good idea to brush up on the geological differences between North American and Australian shale and coal seam resources. Can we trust assurances by US-based Multi-Nationals that groundwater contamination just cannot happen?
Yeah, right. Ask anyone from Bhopal to Brazil...

On a less well-known note: A major coal mining project has been rejected in WA's South-West because it might interfere with established viticulture in the same area.
QUOTE
So why should the public take these "protestors" seriously?




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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
bermuda
post Posted: Mar 9 2014, 06:30 PM
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In Reply To: flower's post @ Mar 7 2014, 06:57 PM

Flower,
The Gasland movie gained emotional and long term support until the oil industry also showed a clip of burning kitchen water fawcett taps. This oil industry clip was taken 26 years before fracking was even heard of. It was lost on the audience.

Methane has been bubbling up through pristine aquifers for 150 million years plus. Fox, from Gasland said this fact was irrevelant.

Emotion has taken over.

The water requirements do need addressing but quite often natural unusable saline water is used.


Said 'Thanks' for this post: flower  
 
flower
post Posted: Mar 7 2014, 07:57 PM
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In Reply To: balance's post @ Mar 7 2014, 07:43 PM

Hi balance, taking the latest BRU issue which was given prime time in that ultra left wing programme ----the ABC 7.30 report, the clip showed just a few locals having their say, with children who obviously thought it a huge joke, it was obvious which camp the reporter fell into.

From memory--- I hasten to add -----the clip showed the locals going about their daily business, but unless I was very much mistaken their mode of transport was what appeared to be a fairly new 4WD of quality.

So why should the public take these "protestors" seriously?

Reckon we have listened to and been influenced by minority interests for far too long.

btw: Apparently some of the wells proposed by BRU are plain old vertical ones, but nobody bothered to point that out in the intro.



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balance
post Posted: Mar 7 2014, 07:43 PM
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In Reply To: flower's post @ Mar 7 2014, 06:57 PM

Interesting discussion Flower.

It is difficult to seperate fact from fiction with so much money involved. Then the facts presumably do no fit for every drill site with different geological conditions.
I do not doubt there are valid points of difference on where certain things are safe or not.

On one hand you have some drillers / investors who dont give *&^% about anything in the environment and then you have the extreme left who will stop at nothing to halt any mining or resource development. Unfortunately people can be swayed by poor science (on either side) , propaganda or simply $$.

I've made more money out of CSG than just about anything (on my small scale anyway) but also have sympathy for people on the land worried about what could happen to their plot.

Who can you trust?

I do no think the USA experience is smooth sailing environmentally but their geology and what is allowed to be pumped into the drill holes maybe quite different to here. Right or wrong, it is clear the Gasland movies have had a big impact.

People get scared, reject change and make do with what they know. To be honest I do no blame them whether they are right or wrong.
They may look at Queenstown in Tassie or the Ok Tedi in PNG and think is it worth the risk? Once your land is rooted it stays rooted for a long time.
Like I said, I do not know enough to be an impartial judge and finding one I think would be quite a challenge.



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