Sunday, July 17, 2011

We Need to Drill More Gas!

One of the biggest points the landmen – and the gas industry – makes when they try to get you to sign their lease is that the gas they drill will help fuel America. American gas drilled from American farms, fields, forests and elementary school playgrounds will help get our country off its dependence on foreign fossil fuels.

That’s what they say anyway.

But according to Rigzone (an industry newsletter) and a recent article in Bloomberg News, there is too much gas, so companies are exporting it to Mexico (and China and other places). According to Rigzone, exports of US natural gas into Mexico are expected to average 1.3 Bcf/d – that’s billion cubic feet per day – up  450 million cubic feet per day (MMcf/d) from 2010.

According to a mid-June report from Barclays Capital, Mexico will need even more gas to meet their demands, and that could lead to further US exports in 2012.

Exporting gas to Mexico is not new – we’ve been doing it for at least a decade, shipping about 850 MMcf/day. What has changed is the amount; in the first quarter of 2011 the exports averaged highest in the past decade.

It’s not a lot of gas – only one percent says Rigzone. But it is starting to add up and several factors suggest the trend towards increased exports could continue over the next few years. In fact, Barclays believes US will increase exports by another 200 MMcf/d next year, bringing the average exports to 1.5 Bcf/d.

And that’s just Mexico. Barclays also noted increased export activity to Asia and Europe, and some port cities are gearing up with LPG terminals.

So much for made-in-America energy fueling American homes…. It looks like the real agenda is to drill as much as possible as fast as possible to make as many bucks as possible before the energy bubble bursts.


  1. And it's not just U.S. companies selling gas to foreign companies but foreign companies buying leases in U.S. shale gas "plays" and thereby controlling the supply of gas produced as well as the process and dealings with landowners as well as state and local governments. Companies are treating the mineral rights they have purchased through dubious tactics as commodities and selling portions to various foreign companies and governments. Landowners suddenly find that the mineral rights they sold to Chesapeake or Hess or Exxon have been re-sold to several unknown entities.

  2. Whenever Corporate America says it's good for the little people -- run.

  3. Yes, that's what really happening. Why do so many people believe the myth that we are going to gain independence from foreign oil? And bring our troops home, too? It's all a hoax on the American people.