Natural gas and Liquefied Natural Gas questions?

We have all seen the price of crude climb at dramatically. It maybe speculation or fundementals. Its hard to know the actuall reason unless you are in the industry.
Do think natural gas is a viable alternative to gasoline from the cost stand point as well as logistics stand point? Do you think natural gas as well as LNG will help decrease demand for crude in the long run?

3 Responses to “Natural gas and Liquefied Natural Gas questions?”

  1. wingsdjf Says:

    First, everyone has an opinion, and my experience has been that most are based on few facts. Ultimately, you have to decide for yourself.

    When you study supply and demand curves in economics, it is clear that speculators help, not hurt. When we are short oil, speculators quickly bid up the price. The higher price causes people to use less oil, stabilizing the market. When oil falls, they do the reverse. Speculators do not use the oil, they just help adjust the prices to reflect supply and demand. They risk their money to do so, and can make money off it only if they are smart enough. Basically, if you buy a bunch of oil for Sept delivery, either you have to sell it or receive it in Sept. I am puzzled that government economists blame pricing partly on speculators; obviously, the reports are written by political appointees trying to blame someone we can dislike.

    Pricing is actually due to fundamentals, as you say. However, it is very painful as a short term issue. For discussion of cyclic nature of oil and gas, see Answer #7 http://answers.yahoo.com/question/index;_ylt=Atl1MNX0.ZgqgQV2nujge_bty6IX;_ylv=3?qid=20080525143343AAFz61D&show=7#profile-info-YdudkmXwaa. Of course, we all whine now that gasoline is $4 per gallon and the oil companies are making returns similar to other companies, but 5 years ago when oil dropped below $10/barrel and gas was 99 cents per gallon, none of us complained that the oil companies were losing their butts.

    NG is impractical for vehicles, tanks hold too little. Compressed NG is a little better, still has lots of tank for not much energy. Also, I would not be enthusiastic from a safety standpoint about having a huge tank of compressed NG. I’m not even too thrilled about gasoline, which is quite volitile, though nowhere near as bad as NG. LNG is cryogenic, not practical for cars and small trucks. LPG is better, but more costly than NG. By the way, NG has gone from $6 to $10 in 9 months; not as bad as gasoline, but getting there. Middle term, diesel is probably the most feasible automobile fuel; when fuel cells become practical, whatever they use is likely the way to go, since they have about double the efficiency of the gasoline or diesel engines.

    Demand for all types of energy is projected to increase by everyone, because the world population is growing, and the production and standard of living of 2nd and 3rd world counties is rapidly growing.Users tend to cause the energy markets to have considerable correlation as they switch to the cheapest energy. Over time, consumers switch between NG and oil. Many furnaces and industrial processes are moving to natural gas, as NG tends to be cheaper than oil, at least in the short run. Nukes are probably the lowest in cost currently, but are generally not politically acceptable. Coal is currently the next lowest cost, but not very desireable because it causes pollution and yields more radioactive waste than nukes!

  2. koolguygou Says:

    Ofcourse it ll decrease the demand of crude oil. Usually compressed natural gas is used and not liquifided natural gas.

  3. naved Says:

    If u r using something else for anything, the demand for anything will fall.