Thursday, September 16, 2010

Mexico Holds Off On Nukes – Gas Is Such A Bargain!

One of 3 Latin American nations that uses nuclear power, Mexico announced this week it will hold off on building a 1,360 megawatt nuclear power plant long planned.

The truth is that natural gas futures have fallen from a high of $13.69 per million BTU's in 2008, over a two-year period, to $3.65 last month.

All signs show the trend is continuing to spiral downward.

Mexico's economy is predicted to expand 4.5 percent this year and an additional 3.8 percent the next - and had planned to build as many as 10 new facilities starting in 2012.

At these prices, they simply can't afford it.

There are a lot of reasons why natural gas, liquefied natural gas and such exotic compounds as propane and the like have fallen so dramatically. The short answer, in a word, is it's all about production.

The development of strings of coiled drill stem – much cheaper to buy, service and maintain - and such advanced exploration techniques as 3D and 4D imaging has led to a 39% increase in resources while it takes 22,000 less wells to produce the same amount of natural gas produced in 1985.

The only real barriers to further expansion is a lack of equipment, trained hands to work the drilling floors and a bottleneck in the governmental permitting process.

Five states account for the bulk of natural gas production. They are New Mexico, Oklahoma, Louisiana, Texas and Arkansas, accounting for 84 percent of domestic production, which was 20 trillion cubic feet in 2002, according to

It's clean, says the Federal Electrical Regulatory Commission. Natural gas has only a small fraction of the carbon footprint produced by coal-fired plants. Though nuclear generating stations produce no soot or hydrocarbon chemicals, they are very expensive to maintain and very slow to permit. Uranium? It comes from some of the most volatile locations in the world. Fugeddaboudit.

In our five-state area of the world, we've got enough natural gas to light it up like Christmas for the rest of this century, according to the experts.

Out in the awl patch, that's what they call a little running room. It's for sale.
Uh, excuse me, y'all, but did somebody say something about that awl depletion tax allowance?

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