UPI Energy Watch

Surging oil prices lower U.S. natural gas costs

As the global oil market has seen increasing prices since this summer, the U.S. natural gas market, which isn't global, has, strangely enough, seen a decrease in the price to consumers.

At the end of 2006, the projected oil price in 2008 was $67.18 per barrel, while natural gas was $8.90 per million British thermal units. Fairly stable, and usually high, gas prices have kept people from switching their home heating systems.

Summer of 2007 saw the price of oil start to soar and last week it passed $94 a barrel; however natural gas costs less than it did a year ago.

Now, especially in the Northeast, people are replacing their old and damaged oil tanks with natural gas systems, the Boston Globe reported. While oil costs homeowners more than $3 per gallon on average, gas costs $2.24 a gallon equivalent.

It's also more environmentally friendly, according to the U.S. Energy Information Administration. They said even an efficient oil-burning furnace would generate 161 pounds of carbon dioxide per mBTUs, nearly 40 percent more than the 117 pounds emitted by burning gas.

Exploration set to begin near Tanon Bay

Oil and gas exploration is set to begin near the Tañon Strait on Thursday

The Philippines' Energy Secretary Angelo Reyes said drilling will begin soon despite environmental fears.

As oil prices approach $100 a barrel, officials said finding commercially viable quantities of oil and gas is a priority.

Initial seismic surveys ended about two years ago and Energy Undersecretary Guillermo Balce said the Tañon may yield up to 100 million barrels of oil, the Sun Star and other area newspapers reported.

Rising fuel prices and growing demand is leading to more imports so the government's goal is to explore and develop local energy resources.

Officials said there are also plans to develop other energy resources including geothermal, micro-hydro and alternative fuels like ethanol and coco-diesel.

Brazil's new oil finds may be difficult to cash in on

Petrobras recently announced several new oil reserves that may be large enough to get the country a spot on the Organization of Petroleum Exporting Countries.

Stocks last week for Petrobras and partners BG and Portugal's Petrogal-Galp Energia soared following the oil field announcements, but analysts say the celebration won't last long because the country hasn't given enough thought to how it will harness the offshore oil.

"Petrobras has discovered big amounts of oil. But that doesn't mean that Brazil will instantly become a member of OPEC," said Roberto Schaeffer, an energy specialist and professor at the Federal University of Rio de Janeiro.

Brazil's government and Petrobras had announced Thursday that tests had shown an area 170 miles offshore from Rio may hold an estimated 5 billion to 8 billion barrels of light crude oil and could be even bigger. However, industry exports warn the costs of offshore drilling and the lengthy process could outweigh the benefits.

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Closing oil prices, Nov. 12, 3 p.m. London

Brent crude oil: $93.12

West Texas Intermediate crude oil: $95.76