Natural Gas prices may stay high for awhile....

[6SpeedTA95]

Originally Posted by Pro Street

10% net profits on a constant bases IS high

There is nothing preventing production.. even the GOP congress tried getting them to do so after Katrina when the reserve issue came up.

The problem with LNG is the costs of contracting.. this is a business issue that anyone who's a conservative shoudl agree the government should stay out of.

There's no reason for the Government to help the most profitable companies to expand thier own operation. If they make the step and build the facilities, build the pumps, and start production.. then give them the credit based on Alt Fuels acts.. but giving them more money so they can "look into the issue" as before is crap.

No its not, there's tons of service and mfg industries that make more...banking has an industry net income of about 14.8% just one example...

[6SpeedTA95]

Oh and what about the fifteen years that profits in the industry were miniscule or companies lost money hand over fist? There was no help then and everyone was giddy because gasoline was a dollar a gallon.

[ballz2wallz]

Originally Posted by 6SpeedTA95

Oh and what about the fifteen years that profits in the industry were miniscule or companies lost money hand over fist? There was no help then and everyone was giddy because gasoline was a dollar a gallon.

People don't care when companies are losing money. They are only angry when they are making money.

[6SpeedTA95]

Originally Posted by ballz2wallz

People don't care when companies are losing money. They are only angry when they are making money.

It drives me nuts when people dont understand the way the industry works or the enormous costs involved, costs that are in many cases exacerbated by government(s).

[ballz2wallz]

Originally Posted by 6SpeedTA95

It drives me nuts

You and me both.

[6SpeedTA95]

Originally Posted by ballz2wallz

You and me both.

Marathon oil is doing an expansion in Louisiana, the expansion alone is costing 2.5 BILLION dollars. Thats on one refinery...

[Pro Street]

Originally Posted by 6SpeedTA95

It drives me nuts when people dont understand the way the industry works or the enormous costs involved, costs that are in many cases exacerbated by government(s).

That's a nice attitude you ahve here.

I'm well aware of costs. I'm well aware of profit margins. I'm also well aware with how production is limited.

I worked for Marathon in Texas City

[6SpeedTA95]

Originally Posted by Pro Street

That's a nice attitude you ahve here.

I'm well aware of costs. I'm well aware of profit margins. I'm also well aware with how production is limited.

I worked for Marathon in Texas City

So then how can you say that the companies dont spend enough on reinvestment? The barnett project west of ft worth is worth tens of billions of dollars in investments. The shale project west of denver has so far cost 16.7 billion dollars. The costs of doing business in the industry has gone through roof and started to skyrocket from 1994 on due to stringent government regulations put in place on the companies...these aren't entirely bad but the government wont look at the real reasons costs are going up and the media sure as hell wont do it. Well head production costs for natural gas have gone from roughly 1.20/thousand in 1994 to about 3.70/thousand right now. That number varies from 2.70 up to about 4.10/thousand for the most part, but the current wellhead average is about 3.70/thousand on new wells. Why? a huge portion of that is government overhead, real inflation has not been that high.

The government has also sectioned off land due to environmental lobbying further adding to the expenses on the domestic production side. It's absolutely insane...and the EPA imposed costs on refinery building are sky high...they're talkin about building a new refinery here in oklahoma to the tune of 12.8 BILLION dollars. Thats a lot of money and that represents only a single project.

[Pro Street]

Originally Posted by 6SpeedTA95

So then how can you say that the companies dont spend enough on reinvestment? The barnett project west of ft worth is worth tens of billions of dollars in investments. The shale project west of denver has so far cost 16.7 billion dollars. The costs of doing business in the industry has gone through roof and started to skyrocket from 1994 on due to stringent government regulations put in place on the companies...these aren't entirely bad but the government wont look at the real reasons costs are going up and the media sure as hell wont do it. Well head production costs for natural gas have gone from roughly 1.20/thousand in 1994 to about 3.70/thousand right now. That number varies from 2.70 up to about 4.10/thousand for the most part, but the current wellhead average is about 3.70/thousand on new wells. Why? a huge portion of that is government overhead, real inflation has not been that high.

The government has also sectioned off land due to environmental lobbying further adding to the expenses on the domestic production side. It's absolutely insane...and the EPA imposed costs on refinery building are sky high...they're talkin about building a new refinery here in oklahoma to the tune of 12.8 BILLION dollars. Thats a lot of money and that represents only a single project.

All of thoses costs have reasons... you act as though the government is just imposing costs left and right just to grab money which is not the case. I'm saying that the government shouldn't get involved with the practices of oil companies developing LNG, before any initiative is made.

I've stated this over and over.

your argument is that oil companies don't make anough to invest in LNG plants.. this is complete and total bullshit. You take single Q profits and treat them as though they're going to be spent in on lump sum to cover expansion. You still don't acknowledge the real costs of LNG plants is the contractor fees to building deepwater LNG.

You're asking the government to spend billions for the oil companies to give them more money for a project that may or may not even occur. You're asking to pull environmental costs and business taxes that apply to all corporations.

What's next, take away Telecom fees and taxes?


then what?

oh, let's cut taxes.


See you in 10 years when things get really bad.

[6SpeedTA95]

Originally Posted by Pro Street

All of thoses costs have reasons... you act as though the government is just imposing costs left and right just to grab money which is not the case. I'm saying that the government shouldn't get involved with the practices of oil companies developing LNG, before any initiative is made.

I've stated this over and over.

your argument is that oil companies don't make anough to invest in LNG plants.. this is complete and total bullshit. You take single Q profits and treat them as though they're going to be spent in on lump sum to cover expansion. You still don't acknowledge the real costs of LNG plants is the contractor fees to building deepwater LNG.

I said some of them are for good reason. The companies have taken initiatives and have since abondoned projects for a variety of reasons including the EPA coming in and CHANGING requirements in the middle of projects.

My argument is not that they dont make enough, i have NEVER said that. My argument is and its true, that they do not get the necessary return on assets, the government at that point should say ok, we'll make the return better...Government costs estimates according to the american oil and gas journal have made up to 30% of new construction costs...again this isn't always bad but if its not longer a benefit to the business the government should try to fix the problem NOW before prices go to 15 bucks a thousand.

You take single Q profits and treat them as though they're going to be spent in on lump sum to cover expansion. You still don't acknowledge the real costs of LNG plants is the contractor fees to building deepwater LNG.

I said this where?

[6SpeedTA95]

Originally Posted by Pro Street

You're asking the government to spend billions for the oil companies to give them more money for a project that may or may not even occur. You're asking to pull environmental costs and business taxes that apply to all corporations.

What's next, take away Telecom fees and taxes?


then what?

oh, let's cut taxes.


See you in 10 years when things get really bad.

Once again putting words in my mouth...I never said do it for projects that may not occur I said DO IT FOR PROJECTS that WILL occur what is it you dont understand about that? If they dont spend 10 bil on LNG infrastructure they dont get the tax incentive for LNG...if they SPEND the 10bil on LNG then they get a portion of it back...that requires them to make the investment and is what I've said this entire thread