Saturday, October 11, 2014

The Natural Gas Tsunami -- Richard Zeits

Over at SeekingAlpha:
The meteoric rise of the Marcellus and Utica natural gas production to over 15 Bcf/d in less than five years of active development looks almost miraculous. This explosive growth would not be possible, however, without the Midstream Industry being able to deliver gathering and takeaway solutions at an equally remarkable pace. The takeaway capacity ramp-up is particularly impressive considering the tedious permitting process and significant lead times for new projects in the Northeast.
In fact, the Marcellus and Utica region may be able to add another 10-15 Bcf a day in production volumes already by 2020.
The resulting 25-30 Bcf a day of potential production in 2020 is an enormous amount of natural gas to produce, gather and take away. It would equate to 20%-25% of all natural gas produced in North America in 2020. While this figure may be difficult to believe in, the forecast has credible underpinnings to support it.
Much of this growth is already detectable in the multi-year contractual commitments for new proposed transportation capacity that is designed to take natural gas out of the basin. Moreover, the existing pipeline systems - that are still in early stages of being reconfigured for the new structure of inter-regional flows - provide sufficient reserve of takeaway capacity to accommodate growing production volumes.
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Connecting the Dots -- Saudi v Kuwait

The other day I noted that Kuwait bought into the Canadian shale play -- the Duvernay. Lots of story lines.I was not aware of this story line over at Rigzone: Kuwait and Saudi in price war.

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Meanwhile in Baghdad -- Things Not Looking So Good

CNN is reporting that leaders of Iraq's Anbar province now desperate; now requesting US troops on the ground. Won't happen. Airstrikes will need to destroy Anbar to save it. The only thing between Baghdad and ISIL is Anbar.

Baghdad before November? Sort of reads like Patton's race to Berlin, doesn't it? And one has to remember: ISIL is JV; can you imagine what's about to happen if Syria/Iran/Al Qaeda send in the varsity?

Kuwait next?

Dominoes, anyone?

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We're Way Beyond "Boots On Ground" Talk

We're way beyond blaming President Obama, or suggesting what President Obama might do or might not do now. I think he's pretty much watching this play out; there's not much else the US can do. We're way beyond arguing whether "troops on the ground" is a possibility. I don't think folks realize how difficult it is for the US Army to turn on a dime. US Marine expeditionary forces are not going to stop ISIL; they might slow ISIL down, but the slaughter would be horrendous and President Obama won't want to watch that on television under his watch.

If the US sends in "the cavalry" now, at best, a Pyrrhic victory. And the US doesn't do Pyrrhic victories on purpose.

It's hard not to imagine the following scenario playing out.
The absolute fear of mass executions and beheadings by ISIS will result in panic in Baghdad.

We will start to get reports of Baghdad residents streaming south out of Baghdad towards Kuwait, where there is still a US presence.

Once refugees start streaming out of Baghdad, the battle for Baghdad is over. It's human nature. The Iraqi leaders will have no buffer, no "human shield" between them and ISIS. 
Air strikes won't stop ISIS. A multi-million dollar cruise missile to take out a Toyota pick-up truck. The math doesn't add up. And it's way too late to put US "boots on the ground." Helicopters are "boots on the ground," (see linked article above) but shoulder-fired ground-to-air missiles will quickly halt US helicopters. Once one US helicopter goes down and ISIS has the video of the helicopter crew, dead or alive, President Obama will have a catastrophic political problem. But the question of sending in more US troops will be off the table. It's too late. That train has left the station.

Oh, all that talk about the oil fields? That's a given once the ISIL-flagged convoy starts streaming into Baghdad.

President Obama is focused on the November elections.

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Remember: ISIS Is The JV Team ...

... the coach will send in the A-Team if necessary. 

2 comments:

  1. Duvernay is not tar sands, but a shale oil play.

    Interesting news from the BP refinery in Bellingham: they no longer will accept oil by rail if they are DOT-111 cars. Those Quantum refineries will be needed to degas Bakken crude, as DOT-111 will probably be fine for degassed crude, as it would be similar to corn oils.

    http://www.foxbusiness.com/markets/2014/10/11/washington-bp-refinery-says-it-will-only-accept-newer-rail-cars-volatile-bakken/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+foxbusiness%2Flatest+%28Internal+-+Latest+News+-+Text%29

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    1. Thank you -- I appreciate that regarding the Duvernay. I have to update my previous posts. Much appreciated.

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