Wednesday, July 8, 2009

Natural Gas Fund Hits 27-Year Record (and Other Stories)

Investors are converging like a black cloud of moths on a light: they see that big gas flare above, and they're sinking their greedy teeth into natural gas.
The United States Natural Gas Fund climbed to a historic, record position in its 27-year history; the last of the shares have been snapped up, and investors are awaiting for government approval for more.
From Bloomberg:
The ETF can’t grow further for now because yesterday it ran out of new shares to issue. The ETF asked the Securities Exchange Commission on June 5 for permission to create 1 billion new shares, and is awaiting approval.

John Heine, spokesman for the SEC, said yesterday the timeline for approval varies from case to case.

The fund fell 1 cent, or 0.1 percent, to $12.17 at 12:43 p.m. It’s down 47 percent this year, while natural gas has fallen 40 percent on the Nymex.

“The size of their position is so big that it creates distortions in the market,” said Olivier Jakob, managing director of PetroMatrix in Switzerland. “And that doesn’t mean it just drives prices up. It can also drive prices down.”

On to other things...

Though there has been interest in converting semis, garbage trucks, buses and fleet vehicles to natural gas, natural gas commuter vehicles in the US remains a niche market. To stimulate interest, tax credits for natural gas vehicles may be doubled and extended:

Tax incentives for buying vehicles fueled by natural gas would be doubled in size and extended for a decade under legislation being introduced by U.S. Senate Majority Leader Harry Reid of Nevada.

The credits, which can be used to cover 80 percent of the added cost to buy natural gas-fueled vehicles over conventional automobiles, would jump to as high as $12,500 for passenger cars and light trucks and as much as $64,000 for higher weight-class vehicles, according to a summary of the legislation.

The bill would also expand and extend tax incentives for purchases of natural gas used as a vehicle fuel and for the installation of refueling stations. The credits were set up as part of a broad energy law passed in 2005 to help secure energy supplies and lower costs, issues that are back in the forefront of Congress following record-high oil and gas prices in 2008.


Refueling-station tax credits would be doubled to as much as $100,000, according to the Senate bill summary. The legislation also includes a provision that would allow businesses to claim 100 percent of the cost of building a manufacturing facility placed in service before Jan. 1, 2015.

Finally, Israel announced it has discovered more natural gas:

A natural gas reserve off the coast of Haifa is larger than first thought.

The Tamar 2 drilling site is nearly 30 percent larger than previously estimated and could reach 180 billion cubic meters, according to prospect partner Nobel Energy Inc., the Israeli business newspaper Globes reported. The value of the field could reach $30 billion.

The new estimate means the reserve could fill Israel's natural gas needs for about 20 years, according to Globes.

Israel's colossal gas find was initially reported here earlier.

Added: Freightliner Trucks just announced a natural gas-powered to its lineup, Freightliner Business Class M2 112 NG.

The company has said that the Freightliner Business Class M2 112 NG truck is its first natural gas-powered truck. The truck is powered by the Cummins Westport ISL G, an 8.9-liter stoichiometric cooled-exhaust gas recirculation engine.

The Cummins Westport ISL G engine is available in rating up to 320hp. The engine features a maintenance-free exhaust system with a three-way catalyst.

Melissa Clausen, director of product marketing for Freightliner Trucks, said: "The M2 112 is a versatile and hard-working truck, and adding a natural gas option only enhances its efficiency. As part of Daimler Truck's shaping future transportation initiative, we will continue to provide reliable trucks with both economic and environmental benefits."

- Brewskie


  1. The freightliner M2 is a big rig truck
    Since America's long distance logistics system is powered by big rig trucks and we already have the short range covered by 150 mile electric trucks it looks like the suburbs won't be collapsing after all. With at least 40 years worth of natural gas that easily gives us enough time to develop batteries with enough power density to go all-electric across our entire logistics spectrum.
    Sorry Jim. Turns out it's not a return to a world made by hand after all.


  2. DB,

    As was mentioned to B Cole earlier, four years ago, peakers were crowing about the upcoming shortages of gas, and batteries' technological incompetence. Now, we're bloated with a 100-year supply of gas, with the rest of the world yearning to learn about shale gas; we already have fast-charging batteries, plus another EV battery that coughed out 180,000 miles.

    What's the next four years going to bring?