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Post by curiousgeorge on Nov 7, 2011 23:26:16 GMT
curiousgeorge, thanks for the link. However I could not help but think that picture is not as rosy as it sounds. Incomes are up, but so are production costs. I have a hard time believing that in this country farm incomes are up 31%. Weather has taken a toll just about everywhere. Texas is in one of the worst droughts ever and areas of the upper midwest and east have been hit hard by flooding this spring and summer. Through most of the year fuel prices were reasonable and that can change in a growing season. Since most fertilizer is petroleum based I think the 500 pound gorilla hiding in the closet is increasing fuel prices. Perhaps sigurdur can shed some light on the link you provided. I am always skeptical of counting other peoples money because there is a tendency to look through rose colored glasses and count all the profits without seeing all the costs. That's easy to understand. The commodity speculators buy and sell futures contracts based on things like the weather and projected yields. Farmers are the beneficiaries of high prices driven by short supply and high demand. Especially if it's unexpected. They also carry crop insurance if their crop fails due to weather, insects, etc. Crop insurance may or may not cover the entire loss, but usually will cover 75% or more. And there are Federal funds also available in many cases. The worst scenario for a farmer is to have a bumper crop with low demand. If they can't sell it for a profit, they have to eat the difference between contract price and input costs. That can put a farm out of business in a couple years, which is why the feds prop up agriculture. Political leaders recognize that people need to eat, and if a lot of farms go under, folks get real hungry and start causing all kinds of havoc - up to and including revolutions with real guns. A complicating factor is that commodities are traded globally. So a bad year in the US is very often a really good year in Brazil for example. And vice versa. Keep in mind that a "good" year for a farmer is high demand and low supply on a global basis. |
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Post by glennkoks on Nov 8, 2011 0:22:03 GMT
hairball, thats a pretty picture but shale maps don't equate well with economically recoverable gas. We have plenty of it but it is a finite resource and I would not count on gas to stay below 7.00 dollars if the economy continues to recover. As I said it was 14 dollars a few years ago.
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Post by hairball on Nov 8, 2011 1:00:50 GMT
Glennkoks,
It was $14 before the fracking revolution.
Earlier this year the US Energy Information Administration's report found 6,622,000,000,000,000 cubic feet of presently recoverable shale gas - and it only surveyed 32 countries.
There will be no energy crisis in our lifetimes.
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Post by ebrainsh on Nov 8, 2011 1:29:42 GMT
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Post by hairball on Nov 8, 2011 1:53:06 GMT
It would be enough to run all the automobiles in the world for over 50,000 100 years, so no. EDIT: sorry, I was running each car on a gallon a year the first time :/ |
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Post by curiousgeorge on Nov 8, 2011 2:26:06 GMT
Glennkoks, It was $14 before the fracking revolution. Earlier this year the US Energy Information Administration's report found 6,622,000,000,000,000 cubic feet of presently recoverable shale gas - and it only surveyed 32 countries. There will be no energy crisis in our lifetimes. Well, certainly not in my lifetime (nearly 70 now). ;D Crystal ball gazing is always tons of fun tho.  Been a favorite pastime of people since - well, since people. Occasionally, somebody is even mostly right. These days the only difference is that our crystal balls are (gasp) powered by fossil fuels and are rectangular, instead of globular and owned by gypsies. About the same degree of accuracy tho.  |
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Post by glennkoks on Nov 8, 2011 3:34:20 GMT
hairball, We had been fracking wells for years before it jumped to 14 dollars in 07. Proven reserves is one thing, getting it out of the ground and into your automobile is a whole different matter. Pipelines, pump stations, dehydration units are all needed. On top of that I just don't see us converting to natural gas until it is cost effective. We are much more likely to drive smaller cars and pay 10 dollars a gallon for gasoline than we are are convert to natural gas.
Not a huge issue for us but poorer countries would be hurt much more and are much less able to afford the conversion to natural gas. Natural gas pipelines and facilities are rare in the third world and being a "gas" instead of a liquid has its own set of challenges.
Once again I do not subscribe to the alarmism of peak oil but there will be challenges as oil becomes rarer and more expensive.
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Post by hairball on Nov 8, 2011 4:15:19 GMT
Glenkoks,
I agree we have plenty of (not so cheap) oil. I was merely demonstrating that 6.5 quadrillion cubic feet of methane is more than the "drop in the bucket" that Ebrainish thought it was. Nevermind the fact that Russia and the Middle East weren't even included in the survey which found that much *presently recoverable* shale gas in the limited number of plays they could find surveys of.
Poor countries are going to stay poor if they don't have energy. All that is needed is investment and for enviro-wackos to be correctly ignored. I don't get your drift about "Pipelines, pump stations, dehydration units are all needed". There weren't a whole lot of pipelines, pump stations or refineries before the invention of the automobile.
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Post by glennkoks on Nov 8, 2011 6:43:21 GMT
hairball, Your going to need a bunch more pipelines, pump stations and dehydration units if your planning on converting the worlds automobiles to run on natural gas. It is a process that will take years.
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Post by sigurdur on Nov 9, 2011 2:25:47 GMT
sigurdur, the first well in the Eagle Ford shale was drilled by Petrohawk in 2008. Initial production rates range from 1200 to 2000 BOE(barrels oil equivalent) with some wells coming in as high as 3000 BOE. In comparison Bakken initial production rates range from 800 to 1500 BOE per day. The addition of these new unconventional oil plays will go along way to decreasing our dependency on foreign oil but they will not be enough to stop the trend of higher prices. On your farm just how much of your total costs is spent on fuel and fertilizer? Because long term I can only see these costs going up and probably at a faster rate than the prices of your crops. Glenn: The price of fuel/elec/fertilizer is already outstripping the increase in local cash prices for commoddities. As a percentage I spend approx 27% on those 3 items alone. And that was this year, projected fert costs are up another 15% for next year. Used to be one priced nh3, (nitrogen) as 10 times the prices of natural gas. That does not apply anymore. NH3 is at 900.00 ton right now. I use over 100 tons per year of this, and that does not include phosphorous nor potash. Going to be quite large checks written. Prices had better stay in this price range. |
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Post by glennkoks on Nov 9, 2011 4:13:10 GMT
sigurdur, Why the huge disparity in fertilizer prices when natural gas is so cheap? Is it manufactured so far away the trucking costs are causing the run up? Regulation, red tape? With your costs running so high do you see a continued trend to higher food prices? A farmer is not going to grow food if he cant make a living.
On my first trip up here in September I was amazed at the amount of Hay this state produces. Coming from a drought stricken Texas I actually formulated a plan to try and make an extra buck paying the hot shot trucking companies servicing the oilfield to bring hay back to Texas to avoid "deadheading". I thought they would be more than happy to avoid a deadhead back, I could get a discounted rate and make a buck they could make a buck and everyone would be happy. With a little bit of research I realized that due to fuel costs a deadhead is actually cheaper than hauling hay back to Texas.
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nl7sx
New Member
Posts: 2
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Post by nl7sx on Nov 18, 2011 2:18:17 GMT
AND....more oil is being created all the time, so the odds are we will never run out of oil. The deciding factor will be the cost of getting it from so far down. We might even learn how to make more energy than in the oil reserves. The population might even double to 14 billion as the planet further greens. More people, more shit, more vegetation and lusher vegetation from more carbon dioxide....it's going to be very interesting! This doesn't include those interesting possibilities between nations, the religions, poor vs rich etc. Remember the Chinese curse: "May you live in interesting times!"
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Post by sigurdur on Nov 18, 2011 2:41:07 GMT
sigurdur, Why the huge disparity in fertilizer prices when natural gas is so cheap? Is it manufactured so far away the trucking costs are causing the run up? Regulation, red tape? With your costs running so high do you see a continued trend to higher food prices? A farmer is not going to grow food if he cant make a living. On my first trip up here in September I was amazed at the amount of Hay this state produces. Coming from a drought stricken Texas I actually formulated a plan to try and make an extra buck paying the hot shot trucking companies servicing the oilfield to bring hay back to Texas to avoid "deadheading". I thought they would be more than happy to avoid a deadhead back, I could get a discounted rate and make a buck they could make a buck and everyone would be happy. With a little bit of research I realized that due to fuel costs a deadhead is actually cheaper than hauling hay back to Texas. Food Prices are actually very cheap. As a percentage of disposable income, I think prices bottomed approx 4 years ago. Do I see fert etc continueing to rise? Yes. The food process, production, distribution etc use a lot of energy. Energy is not going to decline in price because the inexpensive enery has become a smaller mix of the total. Hydrogen becomes practicle at approx 5.50 US per gallon. I think that we will see that price within 5 years. The practicallity of useing H for a fuel source tho still requires investigation as metal fatigues very quickly. The most practicle use of H will prob be NH3 production, thus extending the natural gas supply even more. As far as the price/end user cost of nitrogen type fertilizers, someone is making a reallllllllll killing. |
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Post by glennkoks on Nov 19, 2011 6:14:54 GMT
Im sure someone is making a killing but from what I have read it is a complicated process. Im sure filled with cost increasing governmental red tape. Is there any local manufacturing of nitrogen fertilizer or is it mostly done abroad?
Hydrogen has a whole set of downsides to using as a fuel in our auto's. In addition to metal fatigue it's more volatile. I think natural gas is probably the answer to gasoline in the long term. It's cleaner and we have plenty of it.
It's too bad you don't have a mobile unit that creates NH3 out of all the gas I have been seeing flared off in the western part of North Dakota.
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Post by sigurdur on Nov 19, 2011 7:01:10 GMT
Glenn:
I hate the idea that there is not a pipeline to move that gas instead of it being flared off. Such a waste of a finite commodity. I would rather see production slowed to allow that gas to be captured and utilized.
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