Shell’s Shale Write-Down
show comments
  • Corlyss

    Ford plans to start producing it’s very popular F-150 truck to meet the demand for nat gas powered light trucks.

    Unfortunately they are not producing them to roll off the show-room floor nat gas ready. They are doing that whole silly conversion kit thing. I desperately want a nat gas powered Tahoe, but when I investigated it, Chevy was not about to produce one, and if I got a conversion kit, I’d have to drive 100 mi. every time I needed to get the car serviced. This is a ridiculous state of affairs. Back in the dark ages of computers, The Computer Wimp, aka John Bear, said if autos were serviced the way computers were (then), there would be 3 national service centers and you’d have to ship your car to one of them to be serviced. The car would never have taken off if that had been the maintenance model. That’s practically what it is for non-fleet nat gas vehicles. Big fleet owners have their own filling stations and their own service centers. The rest of us have to make do with distant service centers. I ain’t gonna buy a nat gas truck till I can drive it off the showroom floor nat gas ready and they improve service delivery.

    • Thirdsyphon

      I’d have thought the lack of filling stations for NG would be an even bigger issue than

      • Corlyss

        Pickens is working on getting infrastructure to service cross country truckers and merchants. Once that happens, it will be more attractive to individual car owners. Once the auto cos. start producing a lot of nat gas vehicles, their costs will go down.

        But if Pickens and his co. don’t shake a leg, the cost of nat gas will equal the cost of gasoline. When I started looking into this in 2009, nat gas at the station here, it was $0.25/gal. In 2011, it was $1.25/gal.

        • Thirdsyphon

          Pickens &Co. are interested in getting NG access to as many consumers as possible, but they’re much less invested in keeping it cheap. The “sweet spot” for NG pricing is cheap enough that consumers are incentivized to switch to it, but not *so* cheap that the providers aren’t able to make a good profit. At a guess, I’d say that point is probably right around where it is now (and absent vigorous antirtust enforcement, it’s probably going to creep upwards in exact line with where that point is going forward). But I think that unless LNG starts raining down from the sky like it does on Titan, the $0.25/gal price will turn out to have been a once-in-a-lifetime perk for early adopters.

  • tarentius

    You cannot judge what is going on in the shale oil business by Shell, which came in very late to this game and lacks the expertise of the US companies responsible for the boom. Shell’s North America operations have been very poorly run, especially in Alaska and Canada. Coming in late to the game, Shell has had to pay exorbitant prices for leases and is perhaps two years behind in developing them. Last year it spent about a billion and a half buying leases from Chesapeake Energy in the Permian basin and one billion for leases on a ranch in the Eagle Ford in Texas. In two years, these leases will start to pay off. In the meantime, Shell has had to write off disastrous decisions in Canada to try and play the Shale Game.
    Shell has been a rather poorly run company for several years now, and the high price of oil has been masking their problems.
    I would not base any conclusions on shale oil based on Shell’s experiences.

© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service
We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to and affiliated sites.