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- January 31, 2012 Edition of the Stateside Report
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2 comments:
While we are on the subject of energy stocks and natural gas liquids (NGLs). While I was at the Vancouver Resource Investment conference today I had an interesting discussion with a petroleum engineer and another investor. I have learned that there two important reasons why NGLs are priced near the price of oil.
I am sorry if I am repeating information you covered in your videos. The NGLs of course contain natural gas as one of their components, but they also have other properties that make these compounds as valuable as crude oil. The crude oil that is extracted from oil sand sites in Alberta is too thick and heavy to flow through an oil pipeline. The NGLs are used to basically to thin out oils sands crude oil so it can be piped directly to oil refineries. Below is part of Calgary Herald article on NGL production:
"Low natural gas and high oil prices have driven producers to focus on so-called wet gas to extract the propanes, butanes and condensates used by industry in petrochemical facilities, gas processing and to make bitumen flow smoothly through pipelines. The rising volumes of liquids rich gas will require more natural gas processing facilities."
http://blogs.calgaryherald.com/2011/12/07/demand-for-natural-gas-liquids-challenging-pipelines-plants/
Another important property of natural gas is that it can be converted to gasoline. Carbon Sciences Inc. has developed a process that combines natural gas and carbon dioxide to make gasoline.
"The United States has some of the highest recoverable natural gas reserves in the world thanks to the controversial hydraulic fracturing process that breaks shale rock formations to release the energy source. However, existing vehicle infrastructure relies on liquid fuel to run the millions of cars and trucks on U.S. roadways. While there are natural gas vehicles being manufactured, they are slow to catch on and distributed fueling infrastructure is lacking. To resolve this dilemma, Carbon Sciences Inc. has developed a breakthrough technology that transforms natural gas and carbon dioxide into gasoline, which may help reduce foreign oil dependence."
http://oilprice.com/Energy/Energy-General/Turning-Natural-Gas-and-Carbon-Dioxide-Into-Gasoline.html
I do have say that though I mentioned Carbon Sciences Inc. in my last post the company's stock is listed on the Over the Counter Bulletin Board (OTCBB) in the U.S. Please do very careful research on this company before making any decisions on investing in the stock.
Also I do mot own any of the company's stock.
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