News & Observer Report Confirms Our Call
North Carolina’s Government Has Been Betting on a Bubble.
In a report by John Murawski titled, “Pipeline expansions could leave NC awash in shale gas“, Murawski details the pipeline expansion plans of Transco to add a reverse transit of its pipeline which runs from the Barnett shale region of the gulf to New York City. This is being done to handle the over-production of natural gas from the Marcellus shale region. The Wall Street driven over-production of natural gas has dropped the price levels whereby more exploration would not be profitable in the short term and would move drilling in North Carolina to the back of line in priority. North Carolina’s natural gas utilities Piedmont Natural Gas and PSNC Energy have signed onto long term deals with Transco.
In our website report, “Is North Carolina’s Government and the Energy Companies It Represents Betting Our Future on a Bubble? Who will be left with the damage?”, we reported the following:
The people providing us with reports on a natural gas bubble are as follows:
Art Berman-A petroleum geologist and consultant to the energy sector; editorial board member of The Oil Drum; Associate Editor of the AAPG Bulletin; and Director of The Association for the Study of Peak Oil.
David Hughes-A geoscientist who has studied the energy resources of Canada including the Geological Survey of Canada; developed the National Coal Inventory (Canada); Team Leader for Unconventional Gas on the Canadian Gas Potential Committee; has published, researched, and lectured widely on global energy and sustainability issues in North America and internationally.
Deborah Rogers-Started her financial career in London in investment banking; returned to US as a financial consultant for several Wall Street firms; appointed primary member to the US Extractive Industries Transparency Initiative, an advisory committee within the Department of Interior; appointed to a task force reviewing placement of air monitors in the Barnett Shale region by the Texas Commission on Environmental Quality.
What do these reports tell us? They present the following points:
In 2011, shale mergers accounted for $46.5 Billion in deals for Wall Street investment banks.
This occurred while shale wells underperformed in dollar terms.
Investment banks’ push and promotion created glut and new lows for natural gas prices.
Supply exceeded demand by a factor of four.
Price declines opened door for transactional deals worth billions securing large fees for investment bankers.
Created largest profit centers in investment banks’ energy portfolios since 2010.
Overproduction pushed in order to meet financial analysts’ production targets and support cash flow to operators’ imprudent leverage positions.
Citizens need to address the short-sighted and ideological influence of ALEC in the North Carolina General Assembly.
As we reported in, “Government Under The Influence. When private monopoly and government combine.”, Rep. Mike Hager, a former Duke Engineer and member of the corporate bill mill ALEC (American Legislative Exchange Council) has introduced a bill called the Affordable and Reliable Energy Act which repeals sections of Senate Bill 3 dealing with North Carolina’s Renewable Energy and Efficiency Portfolio Standard (REPS). This is an assault on North Carolina’s clean and renewable energy industry. Renewable energy sources employ around 15,000 North Carolinians currently and is growing. In the 4th quarter of 2012, North Carolina ranked number 1 in the country in creating clean energy jobs. Tell Mr. Hager and other ALEC members in the North Carolina Legislature not to kill off real clean energy jobs for imaginary dirty energy jobs.
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