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Gas engine future


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#51 Greg Locock

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Posted 26 March 2012 - 23:30

Natural gas can be converted to a liquid fuel by the Fischer–Tropsch process. So when oil gets too expensive or scarce there will still be a way of fuelling trucks, trains and aircraft. (and maybe even Autogyros)


Trucks should use CNG, trains could as well. F-T sounds like the solution to everyhthing, but it is messy, innefficient, and expensive, so it isn't really the ideal approach. For aircraft it is probably the best appraoch in an oil less world as thus far there seems no better system for storing large numbers of hydrogen atoms, which is the name of the game.

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#52 Canuck

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Posted 27 March 2012 - 02:20

Canuck,

The free market laws of supply and demand sometimes work in your favor! Recent advances in drilling technology have made it profitable to extract the massive reserves of NG that were previously uneconomical to produce. The economics that surround oil and gas markets are complex, and I personally find the subject quite interesting. Over the past few years, crude oil has jumped in price while NG has plummeted. Oil prices have increased mostly due to world political issues, while NG prices have fallen due to technology developments.

Eventually, NG prices will settle-out a bit higher than they currently are, while oil prices will settle-out much lower than they currently are. The only real use for crude oil is for transportation fuels like gasoline, diesel and jet fuel. On the other hand, there are lots of uses for NG, such as electrical power generation, as feedstocks for chemical and plastics production, or for production of agricultural fertilizers.

Enjoy that cheap NG while it lasts. North American supplies are projected to run out sometime in the next 150 years.

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I'm familiar with the O&G market - my livelihood is tied directly to it. I work with one eye on rig counts and the other on market pricing. Here's what I'm absolutely certain of: supply and demand has little to do with the pricing of commodities in a speculator's market. I used to pay in excess of $12, now I'm paying $3 (NG). The $12 was in large part due to positions taken by the Amaranth hedge fund and the hedge fund that bet against them. That was a $2billion bust and wiped out Amaranth and a few others.

Goldman-Sachs has a "special exception" from the SEC that lets them trade on the CBOE despite them not taking delivery of the commodities they're speculating in. Their foray into CBOE speculation drove oil prices over $140/barrel at a time when there was a glut of oil in the marketplace. To begin to detail how badly broken the supply-and-demand equation is perverted and broken would be a PhD in itself.

In the meantime, I will continue to enjoy the absurdly low price of NG energy.

#53 John Brundage

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Posted 27 March 2012 - 02:53

I'm familiar with the O&G market - my livelihood is tied directly to it. I work with one eye on rig counts and the other on market pricing. Here's what I'm absolutely certain of: supply and demand has little to do with the pricing of commodities in a speculator's market. I used to pay in excess of $12, now I'm paying $3 (NG). The $12 was in large part due to positions taken by the Amaranth hedge fund and the hedge fund that bet against them. That was a $2billion bust and wiped out Amaranth and a few others.

Goldman-Sachs has a "special exception" from the SEC that lets them trade on the CBOE despite them not taking delivery of the commodities they're speculating in. Their foray into CBOE speculation drove oil prices over $140/barrel at a time when there was a glut of oil in the marketplace. To begin to detail how badly broken the supply-and-demand equation is perverted and broken would be a PhD in itse

:up:

#54 gruntguru

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Posted 27 March 2012 - 04:46

In the meantime, I will continue to enjoy the absurdly low price of NG energy.

Why not lock-in that low price with a long futures contract? :)

#55 bigleagueslider

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Posted 28 March 2012 - 05:42

Why not lock-in that low price with a long futures contract? :)


gruntguru,

As Canuck noted, oil and gas are fungible commodities, and their market price at any given time is set by commodity traders. These commodity markets react more to the effect of perceived future events rather than current supply and demand conditions. However, the notion that commodity traders can manipulate prices at will and thus continually rake in profits is naive and demonstrates a lack of understanding of how commodity markets function. For trading markets to work, there must be an equal number of buyers and sellers. If a futures trader is going to sell his contracts at a profit, he must find a buyer willing to pay his asking price. Traders can also take positions betting on prices to fall. The markets work both ways.

As for hedging fuel costs with futures contracts, this is commonly done by large fuel consumers such as rail freight companies, trucking companies, and airlines. But it's a tricky business.

Interesting subject.

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#56 gruntguru

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Posted 28 March 2012 - 09:09

Slider.
I agree whole heartedly with your assessment of futures markets. In the main, speculators provide a useful service to genuine hedgers by taking over some of their risk. On the other hand there is undoubtedly a degree of manipulation of some markets by some larger players.

#57 johnny yuma

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Posted 30 March 2012 - 04:27

Today's Daily Telegraph, Sydney,has a report in Carsguide of the newly released "Phill" system,which converts your car to petrol/natural gas ,with a smallish 100km gas range (no,not a stove) and a home overnight fill-up unit using the gas from domestic supply.Price is steep at $8500 all up.

#58 bigleagueslider

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Posted 30 March 2012 - 05:28

Slider.
I agree whole heartedly with your assessment of futures markets. In the main, speculators provide a useful service to genuine hedgers by taking over some of their risk. On the other hand there is undoubtedly a degree of manipulation of some markets by some larger players.


gruntguru,

Due to the sheer size of any trading market, whether it's equities, currencies, or commodities, it is very difficult for individual traders to manipulate prices. The only entities that have the resources necessary to manipulate markets are governments themselves. Once again, no one involved in the commodities market can make a dollar in profit without someone else eventually losing a dollar.

If there is someone consumers should truly be angry at, it's government revenue agencies, and not commodity traders. The commodity traders take a financial risk with every trade. If the trader generates a capital gain on the trade, the US government takes 1/3 of that profit without incurring any risk. To hear US politicians complain about commodity traders making a profit is the height of hypocrisy. The US government profits more from the commodity market activity than any one else.

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#59 Greg Locock

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Posted 03 April 2012 - 02:50

fairly low signal to noise ratio article here http://www.thetrutha...emand-for-ngvs/

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#60 johnny yuma

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Posted 03 April 2012 - 04:45

The US government profits more from the commodity market activity than any one else.

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[/quote]
Thats fine as long as there are "profits".Start worrying when they tax turnover...although
it is perhaps the only effective way to tax any form of gambling !
Comrade yuma

#61 bigleagueslider

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Posted 05 April 2012 - 01:45

Greg Locock,

Thanks for the article link.

Of course, like most things economic, the conclusion drawn about the relationship between current low NG prices and demand for NG fueled cars is a bit too simplistic. Low NG prices are a fairly recent event, there is not yet widespread availability of NG automobiles, there is not a large NG refueling infrastructure existing in most areas, and NG automobiles do not have the same range on a tank of fuel as a gasoline or diesel engine car.

In California, where I live, there is actually huge demand for the NG Honda Civic. You have to wait several months to get one, and dealers are charging about $5000 over sticker price.

It's all relative.

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#62 Bob Riebe

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Posted 05 April 2012 - 15:04

One item with these gas cars; now I can go 450 miles before I have to think hard about refueling, while at the same time have access to a full trunk large enough to carry what ever gear I need for travel and camping.

How far will these cars go without eliminating all the trunk space.

Although I was at a free new car show last weekend and the little econobox crap-wagons they try to pass as full sized are a bad joke.

#63 bigleagueslider

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Posted 07 April 2012 - 02:00

One item with these gas cars; now I can go 450 miles before I have to think hard about refueling, while at the same time have access to a full trunk large enough to carry what ever gear I need for travel and camping.

How far will these cars go without eliminating all the trunk space.

Although I was at a free new car show last weekend and the little econobox crap-wagons they try to pass as full sized are a bad joke.


Bob,

Range is the biggest issue with NG autos. Due to the large volume needed by compressed NG fuel, the range is only about half of that from a gasoline or diesel fueled equivalent.

I'd like to know more about that "free new car show" you attended. What kind of new cars were they giving away for free? :lol:

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