The Impact Of Fracking On America’s Economy… From Space

See that cluster of lights by North Dakota? That’s the result of fracking. Six years ago that light cluster did not exist. The reason is over the past years natural gas extraction though the use of fracking has increased exponentially as a result of the push for alternative fuel use and technological achievements.

Fracking is the controversial method of extracting natural gas from shale rock using a chemical and water mixture. Depending on the methods used, some 29% of the gas being extracted can go to waste—or rather, into creating this light show.

That light cluster is fire of natural gas burning as companies work all night to extract resources from the Bakken formation under North Dakota; a place whose citizens now call the “Kuwait on the prairie”.

The natural gas rush has been so sudden that North Dakota now has the lowest unemployment rate in the country — more than 41,000 workers got jobs there between 2008 and 2012.  Additionally, seven years ago, the U.S. was importing 60% of its oil. Now oil imports are down to 42%. The Bakken fields play a major role in this.

Natural gas is indeed making an impact, be it for better or for worse, and an impact that is now visible from space! The picture was taken by NASA’s Earth Observatory, which orbits the planet twice a day some 512 miles up.

Source: news.yahoo.com

EIA: Price ratio of crude oil to natural gas continues to increase

The ratio between the spot prices of crude oil and natural gas has been generally increasing since January 2009, but it has climbed rapidly in recent months, according to data from the US Energy Information Administration (EIA). The crude oil-to-natural gas spot price ratio has implications for production and consumption.

Crude oil to natural gas price ratio. Source: EIA. Click to enlarge.

The ratio increased because of both increasing crude oil prices and decreasing natural gas prices.

The spot price for Brent crude oil has increased 19% in the last six months, from $103.90 per barrel on 3 October 2011 to $123.81 per barrel on 30 March 2012. Several factors underpin the increase in global crude oil benchmarks since the start of the year. Over the same period, the spot price for natural gas at the Henry Hub has decreased 45%, dropping from $3.57 per million British thermal units (MMBtu) to $1.98/MMBtu. Natural gas spot prices have been near 10-year lows as a result of warmer-than-normal temperatures, ample natural gas in storage, and growing production.

In terms of production implications, EIA said, a higher crude oil-to-natural gas ratio encourages drilling for oil in preference to natural gas and makes natural gas liquids developments relatively more attractive than the development of dry natural gas resources.

On the consumption side, the higher ratio also encourages end users to choose natural gas over products derived from crude oil, such as distillate and residual fuel oil, wherever substitution is feasible.

Source: Green Car Congress

Omnitek Engineering completes $5M placement; financing to facilitate diesel to natural gas truck engine conversion sales

Omnitek Engineering Corporation, a developer of natural gas engines and diesel-to-natural gas conversion systems, has entered into a definitive agreement with investors for a private placement of common stock and warrants to raise approximately $5.0 million in gross proceeds.

Under the terms of the financing, the company will issue shares of common stock at a price of $2.12 and warrants to a group of investors at an exercise price of $3.88, with a five-year term. Merriman Capital, Inc. acted as the sole placement agent in connection with the transaction.

The completion of this financing will greatly accelerate the build out of our national network of diesel-to-natural-gas conversion facilities. There is enormous pent-up demand for truck engine conversions in the US market, as well as other substantial opportunities, including power generators, irrigation pumps, and other diesel powered equipment.

—

Funk noted that diesel engines have a service life of up to 20 years, and that routine overhauls are required and service budgets established in advance. By converting these diesel engines to operate on natural gas during a routine service overhaul, Omnitek can offer truck operators a compelling return on investment with much lower fuel costs and cleaner combustion, he said.

Source: Green Car Congress

Natural Gas Bill Passes Muster in the US House of Representatives

The US House of Representatives, by unanimous consent, passed H.R. 1622—a bill that would direct the Secretary of Energy to: (1) conduct a five-year program of natural gas vehicle research, development, and demonstration; and (2) coordinate with the natural gas vehicle industry and with the Administrator of the Environmental Protection Agency (EPA) regarding streamlining the certification of natural gas conversion systems to federal certification requirements and in-use emission standards.

The bill, sponsored by Rep. John Sullivan (R-OK), would authorize $30 million a year from fiscal 2010 to 2014 for natural gas vehicle research and development.

There are several other bills currently in Congress that would increase the efforts on natural gas vehicles or establish policies conducive to their adoption, including S.1408, the NAT GAS act, in the Senate.


Source: Green Car Congress

Natural Gas Makes A Resurgence in US Legislature

Here is a renewed effort by US Lawmakers to spur on the use and growth of natural gas vehicles. Apparently, this is one of the only ways to effect the adoption of alternate energy vehicles here in the United States. Hopefully, they will also enact legislation that provides similar incentives to electric propelled vehicles.

From Green Car Congress:

US Senator Robert Menendez (D-NJ) last week introduced new legislation, co-sponsored by Senate Majority Leader Harry Reid (D-NV) and Senator Orrin Hatch (R-UT) that extends and increases tax credits for natural gas vehicle purchasing, refueling and manufacturing.

Under the NAT GAS (New Alternative Transportation to Give Americans Solutions) bill (S. 1408), the purchase tax credit cap for a light-duty natural gas vehicle would be increased to $12,500, up from the current $5,000. For the three other covered vehicle weight classes, the purchase tax credit cap would double; the maximum credit would be $80,000 (up from $40,000).

Other provisions of the bill include:

• A 10-year extension for alternative fuel credits for natural gas used as a vehicle fuel, the purchase of natural gas-fueled vehicle, and the installation of natural gas vehicle refueling property credit.

• All dedicated natural gas-fueled vehicles would be eligible for a credit equal to 80% of the vehicle’s incremental cost. Only some dedicated natural gas vehicles currently can qualify for an 80% federal tax credit.

• Makes all bi-fuel natural gas-fueled vehicles eligible for a credit equal to 50% of the vehicle’s incremental cost. This is the first time bi-fuel vehicles would be eligible for a federal tax credit.

• Includes conversions and repowers. The bill includes a “Sense of the Senate” provision that the Environmental Protection Agency should streamline the process for certification of natural gas vehicle retrofit kits.

• Increases the refueling property tax credit from $50,000 to $100,000 per station.

• Allows the natural gas vehicle and natural gas fueling infrastructure credits to be transferred by the taxpayer back to the seller or to the lessor.

• Allows state and local governmental entities to issue tax exempt bonds in order to finance natural gas vehicle projects.

• Allows 100% of the cost of a natural gas vehicle manufacturing facility that is placed in service before January 1, 2015 to be expensed and to be treated as a deduction in the taxable year in which the facility was placed in service. This decreases to 50% after December 31, 2014 and is phased out by January 1, 2020

• Requires that when complying with mandatory federal fleet alternative fuel vehicle purchase requirements, federal agencies shall purchase dedicated alternative fuel vehicles unless the agency can show that alternative fuel is unavailable or that purchasing such vehicles would be impractical.

• Provides for grants for light- and heavy-duty natural gas engine development, with an annual cap of $30 million.

S.1408 amends the Internal Revenue Code, and was referred to the Senate Committee on Finance. T. Boone Pickens joined the three Senators to announced the introduction of the bill.

Ever Heard of the Pickens Plan?

One of my goals for this blog is to consider the means by which the citizens of these United States can kick their addiction to foreign oil. Well, in case you have not heard, there is a southern gentleman by the name of T. Boone Pickens who has a serious plan that will allow us to do just that.

Pickens is a self made billionaire who made his fortune in oil, of all things, but now is on a crusade to free us from it's bondage. T. Boone has a well thought out plan and is spending a great deal of his own wealth in proving its merits and promoting it nationwide. He has aired commercials, been on talk shows and even been featured on 60 Minutes as he campaigns for his cause.

Here are some of his plan's highlights:

- 700 billion dollars a year leaves the US to pay for foreign oil.
- The US has an abundance of natural gas that could be used to power our automobiles. (only one production vehicle is available today, the Honda Civic GX).
- The middle of our nation is a "natural" wind corridor that would be perfect for windmill generated power.
- Solar power needs to be expanded in in the Southwest.

I couldn't agree more. This man is an inspiration for us all and obviously willing to put his money where his mouth is. Have a look at his website and then sign on if you agree!

Visit the Pickens Plan website here.