Fracking Suddenly a True Believer in “Discipline?” US Natural Gas Net Exports Hit Record, Prices Jump as Production Stalls

Subsidized by investors who lost their shirts, cheap natural gas was a huge benefit to the US economy for years.

By Wolf Richter for WOLF STREET.

The fracking strategy used to be: Production growth at all costs, no matter what the costs. Over the past 13 years, negative cash flows, losses, and, starting in 2015, bankruptcies piled up as a historic boom in production of crude oil and natural gas caused prices to plunge. But now, after a brutal shake-out in 2020, production of natural gas has remained below peak 2019 levels, even as exports rose. Prices have risen in response, but this time, the rising prices haven’t yet triggered another production boom that would collapse prices once again.

The fracking boom has turned the US from a net importer of natural gas into the largest natural gas producer in the world. Much of the production is consumed in the US by power generators, the chemical industry, and other industries. The remaining production is exported via pipeline and LNG.

The price of natural gas is currently at $3.95 per million Btu at the Henry Hub. This morning and during some periods last week, it traded at over $4. Outside of periodic spikes, such as during the Big Freeze in Texas, a range of around $4 is above where it had been over big periods since the fracking-induced price collapse in 2008/2009. The price has nearly tripled since June 2020, when it was trading in the $1.50 range:

Sudden “discipline” in production?

Natural gas production has been in the range of 113 billion cubic feet per month since late last year through May, according to data released by the EIA on Friday. The fact that production hasn’t really budged in months, and remains below peak levels, has caused a lot of talk in the industry of a new-found “discipline” among producers, many of which went through bankruptcy in 2020 and prior years. These producers are suddenly seen, unlike in prior years, as being careful not to trigger another collapse in price.

Production collapsed during the pandemic, but then only partially recovered, interrupted by the February 2021 plunge due to the Big Freeze that shut down production in Texas and some other areas.

Surging exports, via pipeline and LNG.

Fracking caused natural gas production to surge so fast that building out pipelines from producing areas to large urban areas had trouble catching up, particularly in the Northeast. Much of this has by now been resolved but pipeline challenges remain, and parts of the Northeast remain dependent on imports from Canada via pipeline, and during peak demand periods in the winter, on LNG imports.

Due to problems connecting producing areas with cities in both countries, there has been a lively trade in natural gas between the US and Canada, with the US exporting some natural gas to Canada, but importing a lot more. Total pipeline imports in May, nearly all of it from Canada, dropped to 204 billion cubic feet.

Mexico has become a huge customer of the US natural gas industry as the US has been building out its pipeline infrastructure to Mexico, and exports of natural gas to Mexico have surged over the years. The US imports practically no natural gas from Mexico.

Total pipeline natural-gas exports have risen by 70% over the past 10 years, to 260 billion cubic feet in May (green line in the chart below).

LNG export terminals started to come on line in 2016 and have since then multiplied, and US exports of LNG have boomed, overtaking pipeline exports late last year for the first time. In May, the US exported 315 billion cubic feet of LNG (black line).

Both LNG and pipeline exports combined amounted to 575 billion cubic feet, having quadrupled over the past 10 years (red line):

Net exporter of natural gas.

Back in the day, the US produced quite a bit of natural gas, but not enough and had to import large quantities, not only from Canada, but also via LNG, which is much more expensive. Then the fracking boom started, and it did have the effect that the US turned from a large net importer of natural gas into a large net exporter in 2017.

Net exports – driven by a surge in exports and the lowest imports since the early 1990s – hit a new record in May of 370 billion cubic feet:

All of it subsidized by investors who lost their shirts.

Cheap natural gas – after the price collapsed in 2008 and 2009 – brought large benefits to the US economy in form of low-cost electricity and feed stock for the chemical industry.

But it also caused a major shift away from coal which could no longer compete with cheap natural gas and the thermal efficiencies (now in the 65% range) of the combined-cycle powerplant that uses a natural gas combustion turbine (like a jet engine) to drive a generator and then uses the hot exhaust gases to create high-pressure steam (like a coal powerplant) to drive a steam turbine. Just about all coal mines have filed for bankruptcy since the arrival of cheap natural gas and the combined-cycle powerplant, and many have been shut down.

All of this was subsidized by investors who plowed however many hundreds of billions of dollars into the fracking business and watched their money get burned up by cashflow-negative companies, many of which have filed for bankruptcy, including one of the natural-gas fracking pioneers, Chesapeake Energy. It finally filed for Chapter 11 bankruptcy in June 2020, after having teetered on the verge for years, but was kept from going over the cliff by investors that continued feeding it fresh money until they finally cried uncle.

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  86 comments for “Fracking Suddenly a True Believer in “Discipline?” US Natural Gas Net Exports Hit Record, Prices Jump as Production Stalls

  1. Wisoot says:

    Short termism. They just found out frackers are using toxic chemicals – previously protected by trade secrets. In various areas of USA. All coming out now.

    • Wolf Richter says:

      Wisoot,

      “They just found out frackers are using toxic chemicals – previously protected by trade secrets.”

      That has been known for a long time, only the exact composition by each fracker wasn’t disclosed.

      The other option is mountain-top coal mining, $10 gasoline, uber-rich Saudis, and much higher electricity costs.

      There is no free lunch when it comes to energy, not even wind and solar, and not even hydro (damming up rivers), and least of all nuclear (Fukushima).

      But wait, there is kind of a free lunch with energy: Energy conservation through higher efficiencies (such as LED lights, more efficient appliances, vehicles, etc.) and people having fewer babies. That would work. But the latter notion isn’t very popular.

      It’s easier to call for limiting supply (and all the mayhem that would produce) than it is to call for limiting demand. But the problem is demand.

      • raxadian says:

        Coal has not been profitable in decades, it has been a losing business for a while.

        • Moosy says:

          coal is actually doing pretty well. its up 160% yoy and about double the previous two high in 2010 and 2019.

          dirty secret, no pun intended, is China adding more coal power plants than is scuttled in Europe and US combined (or something like that). Come think of it, pretty insane. We don’t use our cleaner coal power plants (with lots of S2 scrubbing) here for producing stuff so we produce it in China with all the logistics and transport pollution on top of that.

          And if your head is still not spinning, consider the fact that green-virtue signaling kings Blackrock and Soros are invested in coal mining quite a bit.

      • Confused says:

        How about enacting a $100,000 annual tax credit for not having a baby? Just kidding. We overuse the IRC for social engineering.

      • Newell Franks says:

        The latter notion is actually actually very popular. Every developed country in the world has a birth rate today that is below replacement. Some like Japan, Italy, Russia, and China are WAY below. In just a few years time the size of the global human family will be going down without plagues or wars as primary drivers… although those may hasten the decline…

        • curiouscat says:

          Surprising how few people realize this and also that an economy can expand only thru population growth or productivity increase. This suggests to me that long term grow trends will be defationary.

        • KGC says:

          It will never happen. What will happen is those less developed countries that have high birthrates will overrun those better developed countries that don’t and thus raise their standard of living while lower that of the host nation. This, not jobs, is the crux of the immigration issue.

        • notsure says:

          KCG…only some developed ciuntr. Japan, Singapore and china have strict immigration policies. so does the wealthy arab nations.

          The US, specifically big corporations like the cheap label.

          Long term this is probably not a good way to grow a country and use up its resources but what do i know.

      • MonkeyBusiness says:

        We need radical conservation. The thing is no politician will ever be elected/reelected based on that premise.

        Everyone wants to have the cake and eat it too.

        Nature vs people. Guess who’ll win.

        • Sierra7 says:

          Monkey Business (and others)
          Humanity will continue to “soil it’s nest”. Human greed only accelerates the process.

        • 91B20 1stCav (AUS) says:

          Monkey-i believe the term is ‘Pyhrric Victory’…

          may we all find a better day.

      • Javert Chip says:

        “…Subsidized by investors who lost their shirts, cheap natural gas was a huge benefit to the US economy for years…”.

        So what? UBER’s (and other multi-billion multi-year losers) doing this, too. Who cares? I’m ok with weapons grade greedy/stupid investors lowering prices for me (for a while).

        • Wolf Richter says:

          Javert Chip,

          Oh, I love it! I’d much rather investors subsidize cheap natural gas than taxpayers. I’m all for it. No one forces them to. It’s voluntary.

          You just can’t do it forever. I’m surprised it worked as long as it did. I thought back in 2014, investors would lose patience. But no. They didn’t until years later.

        • MonkeyBusiness says:

          It’s because those “investors” expected to be bailed out by taxpayers.

          What’s new?

        • Gerrard White says:

          What’s to like in an economy that throws so much money at bad ideas

          You have a high tolerance for consumption of bad ideas as long as they waste money?

          Just not ‘your’ money – but it is ‘your’ economy and ‘your’ society that is wasted

          While throwing mainly all industrial production to China Asia

          While incapable even of infrastructure upkeep

      • Joe Saba says:

        you’re to negative nelly there wolf

        nuclear is still best ALL AROUND – and can be done safely
        rather see fusion reactors though – they can be much smaller

        continued ‘inflation’ – ie DEVALUATION of fiat $dollar is REAL PROBLEM
        paid .50 gallon in 1973 – just as FIAT $dollar began
        today same VALUE is much higher

        • Nacho Libre says:

          Nukilar (nuclear) has a very fat tail risk.

          Not having babies is a one-dimensional thinking that will have a lot of unintended consequences and will bite back bigly.

        • Wolf Richter says:

          Nacho Libre,

          “fewer” is not “not.”

        • Wolf Richter says:

          Joe Saba,

          Tell that to my in-laws who have to deal with Fukushima on a daily basis.

          NOTHING is more expensive than nuclear. Everyone always says it’s safe, and it is until it suddenly isn’t.

          It’s HUGELY expensive, and even if the reactor operates until the end of its lifetime and then has to be decommissioned, it costs billions of dollars to decommission it, and you can never properly get rid of the contaminated materials, and none of those costs are properly figured into the upfront total.

          Nuclear is just too friggin’ expensive. When I was young, there was so much promise in nuclear, pushed by the entire industry, and I loved the idea, and over the years, most of it has turned into blatant lies.

        • Nathan Dumbrowski says:

          Joe. Have you seen the exploding cost of the plant they are building in Georgia right now? Near $50B. Original estimates were in the teens. Re-wired the entire plant, one contractor went belly up and the plant that was suppose to be online in 2013? is still not providing power

          And guess what the tax payer and the future power consumers are paying for the “pride of ownership” already via rate increases

        • Shiloh1 says:

          Nacho Libre, didn’t both Jimmy and Dubya pronounce it that way?

        • Nacho Libre says:

          @Wolf,

          I should have written “having fewer babies is a one-dimensional thinking…”

          China tried one-child policy (not no-child policy) with a narrow thinking that there will be more mouths to feed than they can manage. Fast forward to now, they realize their monumental mistake.

          In USA average number of kids in families is already less than 2. Should we go one-child per family too?

          On the opposite side there are government programs that create incentives to have children out of wedlock and worse, a lifestyle where having more kids means bigger welfare checks.

          And then there are agro-families in other countries where more kids mean more help in their family fields.

        • Wolf Richter says:

          Nacho Libre,

          The major reason why China has been so successful in developing its economy over the past five decades is because of its one-child policy. Compare this to India, which started out way ahead and is now way behind. This policy has allowed Chinese families to focus their limited means on raising one child, and giving it the best education possible.

          Your ideas about “children out of wedlock” are heinous. I’m now ready to go vomit. Where do you live? In the Middle Ages? And that whole sentence smacks of misogyny.

          What is this fake moralistic shit doing here on an article about natural gas??

        • Bill says:

          So true. Fukushima was a Tsunami disaster, not a nuclear disaster. What moron would build anything next to the ocean in Japan? After all the Japanese invented the word “Tsunami.”

        • Wolf Richter says:

          Bill,

          That’s nuclear industry propaganda BS. When parts of a country become uninhabitable due to radiation, it’s always something else, never nuclear. I’m so tired of hearing this crap.

          If the tsunami had hit a natural gas power plant or wind turbines of whatever, there would have been some structural damage that is easy to fix in a few months, and that would have been it.

          Now, Japan has nuclear contamination in all kinds of places, and for the rest of our lives, the Fukushima plant will drain large quantities of radioactive water into the Pacific, and no one is going to be able to stop it anytime soon.

        • Ensign_Nemo says:

          Much of the trouble with nuclear power is that the civilian power reactors are deliberately based on military designs for warships and submarines. Uranium-based reactors are often used as a covert method of creating the infrastructure for a nuclear weapons program, and the cheapest way to do that is to take the R&D that already exists for military reactors and simply run them on land. It makes perfect sense to have water as a coolant when you are at sea – in the worst case, the reactor breaches and the sea water quenches the reactions. On land, there isn’t an ample supply of coolant just outside the walls of the reactor.

          Japan is widely believed to have ‘screwdriver nukes’, which are pre-assemblies of nuclear weapons that can be built very quickly if China or North Korea ever attacks Japan. This is typical of many nations that do not have official nuclear weapons programs but have civilian programs that just happen to give them the raw materials, such as tons of plutonium, that are needed to build weapons if their neighbors attack them. There are ‘civilian’ reactors being built in the Sunni Moslem countries near Iran as a quiet response to the Iranian nuclear program. Saudi Arabia doesn’t really need a nuclear power program for electricity – it flares huge amounts of natural gas from its oil fields – but it does need a response to Iranian nuclear weapons.

        • raxadian says:

          Unfortunately nuclear doesn’t go well with Climate change. Extreme colds and extreme heats waves are causing a lot of trouble to nuclear power plants.

        • Cynical Engineer says:

          In theory, nuclear is an excellent power source. In practice, the devil is in the details.

          Take the Seabrook Nuclear Generating Station in New Hampshire. $16B and counting, and has never produced a single watt of power. They spent over $6B building the monster, and only discovered that the construction was irreparably flawed AFTER they had fueled it. Then they spent $10B+ “decommissioning” the facility.

          My share of that boondoggle shows up every month on my electricity bill as the euphemistically-named “Stranded Cost Recovery Charge”.

          At that, I guess we were lucky. The only location that is heavily contaminated is the plant itself, although they STILL to this day have fuel rods in “temporary storage” on site. They aren’t even pretending that they will be moved to safer/more permanent storage someplace else.

      • polecat says:

        OK, Wolf, granted .. ‘higher efficiencies’may help .. however,still …. Eight plus Billion people can’t have it all. THAT’S the rub. LED’s, moarrrr efficient applicances, and fuel efficient vehicles ain’t gonna cut it when EVERYONE wants to grab that EnergyHogginWesternLifestyle that ALL feel entitled to.

        People will have come to grips with living with less extravance then what they feel owed! You,I, and Everyone!

        CONvenience will no longer be the name of the game.

        • Wolf Richter says:

          polecat,

          Yes, agreed. I’m doing my part. I’m walking nearly everywhere I go. To the doctor and back, 8 miles = 2 birds with one stone: exercise and doctor’s visit. Way to go. Plus, I get to look at beautiful San Francisco and the Bay.

          But if I had tried that when I was living in Tulsa, it would have been 16 miles, mostly without sidewalks, and I would have gotten arrested. It’s not always easy, but we sure could try to be a little less wasteful :-]

          But GDP loves waste. It counts waste as growth, and the more we waste, the bigger the GDP growth. If you buy a huge vehicle that gets 15 mpg and you drive it aggressively so that it gets 12 mpg, and then you wreck it and replace it with even a bigger more wasteful vehicle, you have done wonders for GDP. That’s part of the problem – how we look at economic growth.

      • Greg Hamilton says:

        Wolf,
        Respectfully, U.S. citizens are having fewer babies.

      • Thomas Roberts says:

        Wolf,

        There’s no reason that coal has to be obtained by mountain-top removal, which should be banned. Coal can be obtained the lovely way that the old-timers used to do it. Send em’ underground. Although, I imagine that there could easily be some sort of suit with a helmet with a built in breather, that could greatly reduce health risks. It’s one of those jobs Americans don’t want to do, unless they are highly paid. It would always be possible to give visas to less developed countries in Asia and Africa, which could give them a payout at the end, that’s enough to buy a house (in their home country) and stuff to give their life a jump-start. If that was done, it could be cheaper than mountain top removal.

        That could hold America over until, safe nuclear or possibly fusion is developed.

        • 91B20 1stCav (AUS) says:

          thomas.-mountain-top removal IS cheaper where the seams are in the mountain. btw, you forgot to address cave-ins, gas explosions cave-ins, seam-fires, etc. Make this dangerous, dirty work profitable by cheap overseas wages supplemented with unavoidable human costs, though? Yeah, that might do it, it has so far…

          may we all find a better day.

      • Gerrard White says:

        @Wolf

        ‘The problem is demand’ ..well the problem is people

        Most of the world on a dollar a day want more, energy money infrastructure etc

        Who is to tell them otherwise

        Not long distant people consuming 100 or 150 times more

        Bringing consumption down slightly amongst the very few ‘richer’ might be possible, bringing it down to very consumption carbon friendly one dollar a day is probably not going to work

        Bringing the dollar a day masses up to..what level ? and then stop them going higher?

        Probably a problem also, as those people are mostly in far off countries

        In the face of the bug problem every country went their own way, in the EUUS at least with ongoing disagreement in families towns from state to state

        How much more so with climate change : fear drives people apart does not bring them together

      • If NG just got to parity with gasoline, cost per BTU, it would nearly double. It doesn’t enjoy that parity because there is no economy of scale, it is not ubiquitous, however LNG may help accomplish the transition. Tesla burned sitting on the side of the road in SD. Tesla issued a disclaimer that there are fewer battery fires per thousand miles driven than gas autos, the specious argument airlines use for its safety record, as though I measure my lifespan in miles and not time. With NG you can retrofit existing technology, and there is another energy draw, EVs require building new power generation, power lines and charging stations. and now with the population scattering out it raises the question, what if they spend a few trillion on the wrong infrastructure?

        • Thomas Roberts says:

          Tesla cars are far safer than the average car, this is unquestionable. It mainly has to do with their carbon fiber body, which can be used on any car type. Bringing up rare battery fires is just FUD. Just compare their safety ratings to any other manufacturer.

          As far as infrastructure goes, it was estimated before natural gas took off a little over 10 years ago that, there was enough excess unused electricity in the grid at night to nearly power all passenger cars. Basically, overnight the vast majority of cars would charge when the grid had excess electricity (this works at any time when the car is parked at home). The vast majority of cars on a given day only use a portion of their range and would top off to full capacity every night. This of course, was when we were using coal. To properly power the possible electric car takeover, switching back to miner in the ground coal, would be the most cost effective and greenest way to run America. Eventually renewables and safe nuclear/fusion could take over at some point in the future. No new power lines or plants are needed. The existing coal plants and with some of the new natural gas plants for when peak consumption hits, would be sufficient.

          Large trucks like semis and trains when not powered by the grid (modern trains switch freely between diesel and overhead electrical wires, when available) would just continue to use diesel or could be switched to CNG if desired. When self driving semis take off, it would be easier to move alot of semis onto trains for most of their journey, and the trains could have more overhead electrical lines installed.

          Natural gas for power is the best energy source for peak consumption periods and as backup, but in general is less environmentally friendly then miner in the ground coal, based on everything I’ve seen.

    • Shiloh1 says:

      “Trade Secrets” –

      Benzene

      PFAS compounds

      The gas chromatograph mass spectrophotometer is your friend.

    • wiley says:

      Way Old news Read a book on a family out east,possibly PA who was a farming family along with most of the community.Lots of decades long intergenerational ties,self-reliant people.Everyone started getting strange health issues and some people including the son of the profiled family got debilitated.Welks,streams,drinking water poisoned by criminal negligence,costcutting,and laziness by the frack co.sHeavy metals and horrible chemicals and smells along with lying dr.s,health depts.,mayors,e.p.a. Staff,whole,Erin Brockovich all over again.Fracking is very water intensive,prone to leaks,spills,oooopsies,corruption.

    • Tim Milder says:

      Not true.

  2. historicus says:

    There are some things we shouldnt export
    Non renewables like nat gas and uranium leap to mind
    When we exported oil it was a critical blow to OPEC and served to greatly depress prices

    • Wolf Richter says:

      “There are some things we shouldn’t export.”

      Yes, a good argument can be made for that, in the sense that this is a national resource to be kept for Americans in the future.

      But it’s also easy to shoot down that argument.

      There used to be a ban on exporting crude oil. This led to a boom in exports of petroleum products, such as gasoline. In 2015, that export ban on crude oil was removed, and exports took off (I’ll cover that shortly). There has not been a ban on exporting natural gas.

      • historicus says:

        Our exporting oil knocked OPEC out of the game of price fixing for a few years thus serving a dual purpose
        This knocked the world price of oil down
        The natural gas exporting thus far has only raised the domestic price
        IMO

        • Saltcreep says:

          Hey historicus, I would say that mainly OPEC’s own growing domestic commitments knocked them off their perch of power.

          They have by and large gone from sitting on huge and very highly productive oil reservoirs for which they could choose their sell points in terms of price and quantity as they pleased, and still cover any domestic profligacy they engaged in, to being in a position where they are at the mercy of prices over which they are losing their grip mostly due to their ongoing domestic demands for increased cash flow.

      • Joe Saba says:

        remember we REALLY EXPORTED POLLUTION
        since china, mexico didn’t care about environment

        of course now these same corporate genius’s are finding moving again is going to be costly
        and they still won’t bring back to merika since EPA will regulate them out of business

        • bbbbb says:

          EPA is a Farce!!!It is one of the least effective agencies in Fed govt. To protect humans.Soooooooo political,corrupt,incestuous relationship with those it is charged with regulatingTheyre a garekeeping operation-as in controlling the flow of how toxic the co.s are Really making the air,land,water.

      • Joe Saba says:

        oh forgot
        we are ALSO running out of assets foreigners want
        and soon enough our fiat $dollar is gonna go poof

        of course rest world’s fiat currencies will be in worse shape

        de-populate via covid, bankrupt countries with no water/assets

        • Thomas Roberts says:

          You’re assuming that the foreigners, aren’t simply running out of money. Doesn’t matter either way.

          The world’s population never stopped growing even through the pandemic.

  3. Andrew Wilson says:

    I see China has banned the export of certain fertilisers namely Nitrogen and Phosphate .

    Also China refining capacity has grown exponentially, I think it now has more capacity than the USA. Thats going to put a spanner in the works of the big oil companies. China/Russia/Iran will become an interesting force.

    I think Dubai is the big gas producer, they have huge reserves. The USA started out with the Permian basin which I think was the second biggest field in the world next to Ghawar in Saudi. The oil in Texas gave the USA a huge head start in the world, perhaps that is about to change.

    Does the USA still get %50 of its crude from Alberta at basement prices?

    • Auldyin says:

      AW
      I was recently gobsmacked to learn that China has the 3 largest petro-chem cos in the World.
      I thought WTF, not oil as well! Shell was still OK but Exxon was way down, BP out of sight.
      I quite literally could not believe how the World could change so quickly.

      • Thomas Roberts says:

        China has had power shortages in various areas across the country since last year, when the CCP banned Australian coal to “Punish Australia” for wanting to investigate the CCP-19 Virus origins and other things. In order to reduce electricity demand, the CCP has banned cryptos (to prevent crypto mining, which uses a lot of electricity), shut down many factories, among other things. Refineries use alot of energy, and that could be one of the major reasons, why fertilizers cannot be exported currently. The floods are causing alot of issues in China and so anything related to food production, has to be reserved.

        As far as refining capacity goes, that simply isn’t an issue for most places. In China, the CCP gives out large subsidies to build various things at different times, alot of these projects are wasteful or unproductive or overstated “i.e. they claim they build 24 of something, but only built 8”. Alot of these projects are not functional, or can work only at partial capacity.

        The CCP only views other countries as potential enemies or saps to be exploited. Every country that deals with it, learns the true path, that Xi follows.

        • Andrew Wilson says:

          Thats interesting, Im in the process of trying to order some machinery from a Chinese factory and it appears to be ‘on hold’.

        • Auldyin says:

          TR
          I was stupid, I thought they must be using the established oil majors like everybody else to supply their petro-chem inputs (very specialised technology).
          If they had one winner in the race, I could take that, but the top three is a whole new World to me.

        • Thomas Roberts says:

          They can supply their own needs refinery wise, I’m sure. But they also over build many things, because of government subsidies. It’s very wasteful, they should be using that money to fix up infrastructure (the correct way) to deal with floods. Many countries can build refineries, overbuilding is just pointless. It is also important to remember that any numbers from the CCP is likely made up. For this case, it doesn’t matter, overbuilding wastes money, but has little effect on anything or anyone else.

          Overbuilding in capacity of things like this or steel or many other things is neither here nor there.

  4. chim says:

    Now that its mandated in your area again, will you enjoy your forced masking, Wolf?

    • Paulo says:

      Why would you ask such a question?

      If idiots would just get vaccinated none of this would be an issue the US had so much available vaccine from the get go. It is a GD shame SF has to bring out the masks after turning the corner months ago.

      • Ridgetop says:

        “If idiots would just get vaccinated none of this would be an issue”

        So true.

    • Javert Chip says:

      Speaking of idiots, how’d we go from discussing natural gas to a politically toxic conversation about Covid masks?

    • Wolf Richter says:

      chim,

      That’s what you get when only part of the people are smart enough to get the Trump vaccine, and the rest refuse. Covid is now a preventable disease, but too many people haven’t figured this out yet. So now we need to get the friggin tourists that are running all over this place in thick crowds to put on masks indoors. Good luck!

      But hey, masks didn’t bother me before, and don’t bother me now.

      What bothers me are people who refuse to get vaccinated and then spread BS here and elsewhere. I have lost patience. I’m exasperated.

      If you don’t get vaccinated because you hate Trump or whatever and don’t want the Trump vaccine, fine with me, but don’t post BS here. That’s my new rule.

      And I’m probably going to delete your comment if it starts hijacking this thread.

      • Trucker guy says:

        I’m confused… I thought only the right wing trump supporters weren’t getting the vaccine because of govt nanonbots or whatever horseshit they make up. Are people in coastal Cali not getting it because it was made under Trump’s administration? No offense but if that’s the case then.. well, Californians never ceases to amaze me lol.

        I doubt the vaccine has much progress or effect at this point going forward. Those that will get it have it and those that “undecided” aren’t going to get it. The unvaccinated will keep the pandemic going for the time being. Oh well, that’s the internet for you. We’d be a nation of polio if the internet existed when that vaccine came out. Buncha dumb dumbs I tell ya.

        • Dave says:

          I am entering the hijack thread and am sorry. The highest rate of vaccine refusal is among African Americans in the inner cities. Another group who refuses en masse are the devout religious right.

        • MFG says:

          The NYT had a good article the other day debunking the canard that only right wing T supporters won’t get the vaccine. The situation is way more nuanced.

          In the inner cities, African Americans have the highest rate of refusal as the other poster noted. In Los Angeles County, Latinos have the second highest rate of refusal. These two groups also have the highest case and fatality rates in the county.
          Did not help that the current WH occupants undermined the vaccine on the campaign trail during the debates.

          The thing is, the world, as a whole, has a very low vaccination rate. That means plenty of opportunity for new variants to emerge, such as the Lamda, in South America….

        • Trucker guy says:

          Fair enough I don’t keep up with news outside of major financial news so I’m nearly oblivious to the pandemic at this point.

  5. wkevinw says:

    Fracking natural gas, especially, is very likely the “real” breakthrough it is touted to be. Whether the first “investors” (read speculators) were right or wrong isn’t that important. See railroad history.

    Toxic chemicals- all depends on the actual environmental fate of those that are believed to be trapped by very deep rock deposits. If so, this is not a problem. People/business respond to problems. The pollution from the early frackers is largely gone.

    There is no free lunch. Nobody really knows the environmental impact of all the “green energy” technology. For example, I saw where they are calling copper a “green metal”. Copper is quite toxic. There are a lot of people who have no idea what they are talking about.

    Time will tell, but right now I don’t bet against fracking for the next wave of fuels.

    • Anthony A. says:

      I love these type of threads. I spent 35 years in the oil business. Fracking has been breaking rock containing hydrocarbon since the 1920’s or earlier.

      What really brought the U.S. into the “game” in the last 20 years was the advent of horizontal drilling and much better down hole tooling.

      • Paulo says:

        Yes sir, and modelling using computer imaging so they have a target to drill towards.

        Even water well drill rigs frac bedrock as required. It is long used technology.

      • Wolf Richter says:

        Anthony A.,

        “Fracking” today means a body to technologies that include fracking itself, horizontal drilling, pad drilling, rig mobility, and a million other things that have made “fracking” what it is today. The “fracking” of the ancient times that you speak of is irrelevant.

        • Anthony A. says:

          I’ve been on many recent frac jobs. It’s still about breaking up the formation, whether it’s in a conventional well or a horizontal. This is oilfield technology. If the general public wants to include the entire well drilling, and completion work into one work (Fracking) let them do that. But by oilfield definition, that is not correct. I don’t care what anyone not in the industry says.

      • Augusto says:

        Anthony, well said. I worked as well in the Oil Industry, and as you say, Fracking, well has been around forever, as well as all the associated drilling techniques (multi-well pad drilling, rig mobility, etc..). These techniques have just advanced to the place where hydrocarbons can be produced from the shales that were until recently, non-recoverable. Over time, maybe other formations, other shales, or even clays. My father who was also used to work in O&G liked to say the earth’s crust is literally soaked in hydrocarbons, coal, oil, and natural gas. The scary, “we will run out story”, is 1970’s science fiction. It is just a question of cost and know how to produce, which the industry is constantly working on. Of course if we actually do get it all out and burn it, we will undoubtedly choke to death as well…..unless we can re-inject the CO2, which they are working on.

        • Thomas Roberts says:

          I don’t trust, re-injecting the CO2 into the ground.

          There are alot of hypothetical alternatives such as the space CO2 elevator approach. We could have CO2 pipelines that stretch across America and Canada and then a large pipeline to Antarctica, where the CO2 gets charged and gets launched into space.

          There are alot of theories about changing CO2 into energy or other things.

          There are options, but, I don’t trust underground CO2 Storage. NIMBY.

      • Auldyin says:

        AA
        I reckon it was a price far above the $50 a barrel, where Opec is keeping it now, that brought ‘fracking’ into the picture. Opec will ‘adjust’ the price to keep US’s share exactly where they want it IMO.
        It was tons of easy money that created the whole venture in the first place.

    • Shiloh1 says:

      I love the look of verdigris!

    • Bet says:

      Dare you to swim in a fracking pond
      Chemicals just go away? Tell that to the people who live in the Eagle Ford with the health problems they have. And the future lung disease from the silicate sands. I have personal experience My former farm now oil field is a toxic dump

      • wkevinw says:

        “Chemicals just go away?”- as a matter of fact most do. They “go away”/decompose by natural processes: radiation/light, air/oxygen, biological/biochemical.

        If there wasn’t a way to treat water like that, all the bodies of water would be ridiculously polluted by now. In fact they have been getting less polluted in the developed world for decades because there are ways to engineer the polluted materials to decompose.

        Does that mean there is perfection/no places where pollution is improperly managed? No . If such mismanagement has occurred, there should be legal action.

  6. Auldyin says:

    Methane bubbles up out of the ground over large tracts of Siberia. The Russians would be doing global warming a favour if they burned it and turned it into thermal energy and Co2 which is less harmful in the atmosphere than natural methane.
    As it is, by Nordstream 2, they’ll shortly be able to negate the effect of German Greens shutting down coal and nuclear in Germany much to the chagrin of US frackers who tried for years to strong arm Germany to take their LNG
    You win some you lose some.

  7. Bet says:

    It seems to me the last president to utter the “C” ( conservation) word was Carter. Just think if we had expanded his policies.

    • MonkeyBusiness says:

      You know what happened to him right? He wasn’t reelected. Muppets, the rich, the politicians, etc share at least one thing … everyone wants to have their cake and eat it too.

      YOLO.

  8. David Hall says:

    Natural gas emits less CO2 than coal, oil, gasoline or diesel. It may be used during times when windmills and solar cells do not produce.

    The U.S. was running out of gas in the 2000’s. Massive infrastructure to import liquefied natural gas was being planned and built. The price of natural gas soared. Exxon was the largest company in the world in 2013.

    Someone tweaked existing fracking technology to release more natural gas from shale. There was a rush to purchase drilling leases in the Barnett Shale. As time passed richer shale was discovered elsewhere, technology improved and they found they could get petroleum from fracking the Permian Basin. Prices dropped. Chesapeake Energy was once a hot oil and gas stock. It cooled off heading toward bankruptcy. They discovered oil and gas porous shale is in other nations too. Exxon is no longer in the Dow Jones Industrial Average.

    • Anthony A. says:

      George Mitchell, founder of Mitchell Energy in The Woodlands, Texas was for decades trying to fracture shale and his technical folks finally succeed (early 2000’s or so). When George retired, Mitchell Energy was sold to Devon Energy who is headquartered in Oklahoma.

      The Permian has been drilled for ~ 80 years and all with vertical conventional wells. Horizontal drilling, and better tooling, brought up much of the oil left behind from conventional drilling. Plus, new and deeper geologic reservoirs were found through better 3D seismic technology that gave new life to the Permian. The Eagle Ford is one of the new big reservoirs.

  9. SpencerG says:

    I am not sure that I would call it a newfound production “discipline.” In point of fact the price for the past year was artificially low… due to the Pandemic I suppose but maybe other factors. Now it is back at its long-run average (since 2008) of $4 per million Btu. Taking a wait-and-see approach to new production (at these prices) is probably wise. But I doubt you would see much production discipline if the prices went to $6 per million.

    Moreover a LOT of inputs go into making a multi-year decision on new production. For instance the Nordstream 2 line being completed will shut the U.S. out of expanding LNG markets in Europe for a long time to come. Russia can amply supply all of Europe’s needs with Nordstream gas and as Europe needs more the Russians can make nice with Ukraine and ship more through that route.

    Another limiting factor is that US coal usage has already dropped by 600 million tons per year in just 12 short years. By definition it cannot do that again since there is only 440 million tons of annual usage left to go. Presumably electric producers shed the poorest performing coal power plants first… so what is left will likely take longer than 8 to 12 years to replace.

    A third factor is that a lot of natural gas production hasn’t come from natural gas fracking but from capturing byproducts of oil fracking. As long as the oil frackers aren’t expanding their production natural gas expansion will lag as well. And then there is just the whole issue of whether the first holes dug were the best…

    In short, new production requires new markets. Certainly investors have been burned enough to want to see that frackers can do more than simply PRODUCE natural gas… they need to show that they can profitably SELL it as well. The whole world wants to switch away from coal so maybe the U.S. oil patch can find those markets. But until those can be identified I wouldn’t expect to see anything but replacement production at these prices.

  10. VintageVNvet says:

    Several other possibilities for long and longer range/duration ”non fuel” sources of energy:
    1. Completion of the work A. Einstein was working on at time of his demise leading to understanding and utilizing ”gravity mirror” to propel endless transportation that actually MAKES energy instead of consuming it.
    2. Harnessing of so called dark matter, another of good ol’ Albert’s seminal theoretical works in progress — and several young theoretical physicists going great guns on this tool too.
    3. Completion or at least extension of ”engineering” of solar energy capture material/techniques to move that harvest at least a bunch closer to the amount available, now somewhere in the low teens IIRC from my last read of the subject.
    4. Continuing increase in technology to harvest ALL pollutants that arise from incomplete combustion of coal.
    5. Continuing increase in technology to harvest ALL the energy and pollutants from combustion of wood,,, energy harvest approaching 70%, again IIRC from last reading.
    6. MUCH more increase in technology to harvest energy of ”tides” available globally.
    7. Continuing increase of harvest of garbage/trash to provide energy.
    8. ETC, eh?
    As far as the potential ”hijack”,,, please please please BEE careful with your covid19 PPE and ”detox” measures of all kinds;; some respected MD/epidemiologist types I try to stay current with currently ”suggesting” we are not even done with the current variant and several others very likely,,, and then some other virus also very likely and even worse coming sooner or later;; basically, GAIA doing what must be done to rein in our out of control species!

  11. David W Young says:

    Electricity powered by natural gas is a very clean energy source, aside from the steam clouds created around the plants which no one has labelled out as negative for the environment. I have a different take on nuclear power than most, because the recent Japanese fiasco was a cascade of human errors/design failures similar to Chernobyl but not directly related to American system designs and operations.

    The ability of the Japanese nuclear plant to withstand a 9 Richter earthquake was inadequate and the resultant tsunami showed a glaring lack of safeguards to withstand breached flooding for a reactor right on a populated coastline. The cost of uranium and the number of kilowatts produced per unit of uranium is still very favorable for future energy requirements. Nuclear Engineers cannot eliminate the Human Error Risk Factor to any system design; but since no plant is totally automated and probably shouldn’t be, there will always be that element of risk for any power plant. Mechanical/electrical systems in nuclear plants have 2 to 3 levels of redundancy to greatly reduce operational risks.

    Having multiple sources of fuel for power production is also a strategic protection from repeats of power grid failures as in Texas this past winter where once in a 100 years temperatures brought every energy source to its knees. This should be a case study for every engineer coming out of Grad School in the years ahead. Nuclear power plants were not spared, but they should be in the future.

    If we are talking about nuclear energy powering some aspect of manned space travel into the future, we should be talking about increasing the number of nuclear power plants in the world. Peak oil tells us we really have no alternative, while the Carbon Footprint of Green Energy Sources, in total from mining to equipment production/transport, is not insignificant.

    • 91B20 1stCav (AUS) says:

      DavidWY-to borrow from an old stock market observation: “…the planet can environmentally convulse faster than you can engineer to met the convulsions…”. (Chernobyl -(human/engineering error, rather than environmental), then Fukushima-thank the gawds that a big shake hasn’t yet occured on the San Andreas near Diablo Canyon and San Onofre was determined (human/engineering, again) to be untenable and decommed. Future nukes may be better, but we have plenty of old-tech ones, with their byproducts, to deal with NOW, with very long-term effects if not PERFECTLY managed).

      may we all find a better day.

  12. c1ue says:

    370 billion cubic feet sounds like a lot, but to put it in perspective:
    it is about 7% of what Russia was exporting through the Ukraine prior to the Nord Stream pipelines, and about 5% of what Russia exports to Europe overall.
    So a lot, but more along the lines of diesel for peaker generators than base load.

    • Wolf Richter says:

      c1ue,

      That’s beside the point. The point is that the US – though it is the largest user of natgas for power generation and as feed stock for the chemical industry – produces so much natgas that it has become a net exporter of natural gas despite the huge consumption at home.

      Russia is a flyspeck compared to the US in terms of demand for natural gas by its power generators and chemical companies.

  13. Stanley F Brossart says:

    For the comment on Japanese nuke reactors being on the coast in an earthquake zone look up Diablo canyon and it’s run by PG&E that has contributed to California fire’s including this years disaster.Well run company based on GREED.

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