Comment

Fluff stuff

June 1998 Vol. 219 No. 6
Comment

Bob Scott

Fluff stuff

Last April, we mentioned here that our local paper had taken to quoting the futures price of natural gas in $/square feet (sf). And we endeavored to point out that anybody that sold gas at the sf-price really made some premium money when the quoted price was extrapolated to cubic feet (cf) of gas, since 1 Mcfg is an acceptable approximation of MMBtu which is what actual price is based on.

Well, comes now a letter from reader James Foster of Laughlintown, Pennsylvania, the state where Col. Drake drilled the first U.S. oil well. Appropriately for this column, there's all kinds of producing gas wells today near the original Drake location.

Mr. Foster pointed out that quoted gas prices in his local paper, the Tribune-Review, which comes from the town of Greensburg up the road a piece towards Pittsburgh, makes our Houston Chronicle's price look cheap. The Trib consistently reports its gas prices in $/pound (lb). Mr. Foster has been trying to get the editor to convert to the more usual $/Mcfg or MMBtu measures, but has had no luck yet because, he says, the editor realizes his own infallibility and continues to ignore good advice (which sounds like some editors we know).

Anyway, on April 30, the price of natural gas was said to be $2.298/lb in the Trib, which indicates producers have a really good deal. Using the Perfect Gas Law, PV = nRT, and solving for n in lb-mols with R = 0.73, T = 520° R, P = 1 atm, V = 1 cf and using 16 lb/lb-mol for CH₄, the weight of one cf of gas weighs 0.042 lb meaning 1 Mcf weighs 42 lb worth $96.52. But that's for perfect gas, which CH₄ ain't exactly.

Calculating another way by equating l Mcf to 0.18 bbl of crude oil assumed to weigh 295.77 lb/bbl (on the basis there are 7.455 bbl/mt) may be more practical. Then we get 1 cf of gas weighs 0.053 lb/cf or 53 lb/Mcf which should go for $121.94, an even better deal. Clearly, gas prices are ridiculous in the Trib's way of looking at things. Oh yes. The paper also reports the prices of gasoline and heating oil in $/ounce, but that's another story.

A final note. The Trib is owned by Richard Mellon Scaife (of the Gulf Oil Mellons) who's been accused in the news lately of financing the deep, dark, vast right-wing conspiracy to unseat Billy Jeff Clinton that Hillary propagandizes about. Well, if 'ol Richard has any gas production in his part of the world and he's getting Trib prices, he can afford to support such purely worthy endeavors.

Sometimes, the hand does not obey the brain. Also last April, we mentioned a "Lincoln Explorer" said to have been purchased by one Tipper Gore. Of course, that should have been "Lincoln Navigator" as any dodo should know especially when he's checked the story out with the general manager of the largest Lincoln store in Houston. This dodo will try and improve his alertness re such vital facts.

Islamic fundamentalists and revolutionaries of one political stripe or another continue to cause problems in a number of oil areas. On-again, off-again plans to develop oil fields and build pipelines in Central Asia in recent years have been stymied by military clashes in Georgia, Chechneya, Azerbaijan, Armenia and Tajikistan. Mexico has had its share of revolutionaries in its oil-producing states of Chiapas and Tabasco.

Terrorists — or freedom fighters depending on one's viewpoint-have long been active in Peru, Colombia and Equador. In Colombia a number of foreigners working for oil companies have been kidnapped and the Trans-Andean oil pipeline was bombed 66 times in 1997 alone, resulting in loss of some 200,000 bbl of oil and extensive environmental damage.

Over the past 13 years, that pipeline has been blown up 503 times, with over 2 million bbl of oil spilled — over eight times as much as the Exxon Valdez lost. That means that whoever has the contract to fix that line and clean up the oil spills has to have one hell of a deal. And isn't it downright curious that Greenpeace, the Sierra Club, the Auduboners, Friends of the Earth and other wacko enviro types haven't rushed enmass down to Colombia to protest to those big, bad guerrillas about all that spilled oil? At least, they could sue them, set up a picket line or, better yet, chain themselves to the pipeline and dare those evil polluters to do their worst.

Other countries with recent or ongoing problems are Algeria, where thousands have been killed, Sudan, Egypt, Bahrain, Pakistan, Turkey, Afghanistan and Yemen. And probably most important, there's long been an undercurrent of fundamentalist activity in Saudi Arabia.

But if one has to be kidnapped by a dissident group, try and do it in Yemen. Those folks treat the expat captives like honored family since all they're after is something from the government — like a new road — which they always get.

Obviously, risk in the oil business isn't confined to dry holes.

Comment from one expat to another overheard in an Aberdeen oilfield watering hole: "Did you hear the news that a tornado hit Lagos yesterday and caused $100 million in improvements?"
In a recent Fox News / Opinion Dynamics poll of 904 people about potential presidential candidates in 2000, 38% said Ozone was more charismatic than Texas governor George, Jr. (also known as Shrub), who tallied 29%. (We know he's not a Jr., but that's what his cohorts in Midland called him when he lived there.)

The respondents are apparently the same totally unbelievable ones praising Billy Jeff in his recent polls in spite of his recent activities. Ozone may be more charismatic than a dull chunk of basalt, but not compared to anybody from planet earth that breathes oxygen.