Dec 29

Shale gas goes global

By Curve natural gas in Europe, shale gas in Europe No Comments »

Producers rush to drill in Eastern Europe, while China and India look to develop domestic plays

The coming year will see a major expansion of investment in shale gas plays around the world, notably in Europe, China, India and perhaps even South America. Companies and host countries hope to repeat the North American experience that has transformed energy markets across the continent.

The enormous shale gas potential will reshape global energy markets over the next decades, loosening Russia’s grip on the European market, undermining the economics of big liquefied natural gas projects, and enhancing energy security for major importers such as China and India.

“It’s a big play,” says Amy Myers Jaffe, associate director of the energy program at Houston’s Rice University. “I think it is the gas equivalent to deep-water drilling for oil. We went from getting no oil from deep water, to having it now be 5 per cent of global production, with predictions that it will get to 30 per cent. This is going to be the same thing for shale gas.”

Unlike the development of the North American shale gas industry where independents led the way, industry giants are spearheading the foreign effort. In Poland, U.S. majors like Houston-based ConocoPhillips Co. and Chevron Corp. of San Ramon, Calif., have significant land positions and are pursuing development plans. France’s Total SA said this month that it is studying investments in the Eastern European country. Exxon Mobil Corp. has land positions in Germany – where is it already producing conventional gas – as well as Poland and Hungary.

Poland is believed to have a vast resource, though the cost of extracting it could be a barrier to commercialization.

Scotland-based consultants, Wood Mackenzie, has estimated Poland’s shale resource to be as much as 48 trillion cubic feet – equivalent to nearly half of European’s proven gas reserves.

European governments are salivating over the prospect of domestic production, given their reliance on imports from Russia’s OAO Gazprom, which has experienced disruptions in exports twice in recent years due to political and commercial disputes with transit states.

“That’s one of the key reasons that some of the European governments are behind U.S.-based firms coming in and exploring some of these plays – it’s a security-of-supply issue,” said Robert Clarke, manager for unconventional gas services with Wood Mackenzie.

Similarly, China and India are eager to exploit unconventional gas deposits in their countries to reduce their dependence on foreign sources.

China, for example, has set a production target of one trillion cubic feet per year from shale, tight-gas formations and coal-bed methane – an amount equivalent to 30 per cent of the country’s 2010 consumption.

Chinese state-owned companies are investing in North American shale plays, in part to gain expertise needed to develop their domestic resource. China National Petroleum Corp. is negotiating a joint venture with Calgary-based Encana Corp. to develop properties in B.C.’s Montney and Horn River areas. CNOOC Ltd. – a subsidiary of China National – paid $2.16-billion (U.S.) for a one-third interest in Chesapeake Corp.’s Eagle Ford shale play in south Texas.

Ms. Jaffe of Rice University said the Chinese are investing to gain know-how as much as a share in production revenues. In fact, the U.S. and Chinese have established a formal process to share expertise on shale gas development among experts from industry, government and universities.

“Obviously the Chinese take [their own shale potential] seriously or you wouldn’t have seen the types of investment you are seeing,” she said. “They did this deal with Chesapeake to learn what the business model is, and gain experience in the United States.”

In turn, Exxon, Royal Dutch Shell PLC, and BP PLC will all be pursuing opportunities to develop shale, tight gas or coal-bed methane properties in China.

India’s largest energy company, Reliance Industries Ltd., has also plowed money into U.S. shale plays, and New Delhi signed an agreement this year with the U.S. to benefit from American technical expertise. India plans to auction off land for shale gas development before the end of 2011.

The shale gas business will develop more slowly internationally than it did in the United States, but the seeds of a global gas boom are firmly planted and will be sprouting in the coming year.

Source: Globe and Mail

Tagged with: • • • • • • •
Dec 23

Global Gas Use Outlook Optimistic, Exporters’ Group Chief Says

By Curve energy market No Comments »

Europe’s demand for natural gas is rising on forecasts for a colder winter while the global consumption outlook is optimistic, said Leonid Bokhanovsky, secretary general of the Gas Exporting Countries Forum.

European gas demand is expected to increase to as much as 650 billion cubic meters by 2030 from 550 billion cubic meters now, Bokhanovsky told reporters in New York. Imports will increase to about 400 billion cubic meters from about 350 billion cubic meters now as the continent’s own production declines, he said.

Demand in the Asia Pacific region will drive the global growth in demand while North America will probably see a stagnation, he said.

The forum, an 11-member group that controls two-thirds of the world’s proven gas reserves, will probably hold its next meeting in November next year, he said. Bokhanovsky also said Malaysia, Indonesia and Brunei may join the GECF as new members, while talks may be held to cooperate with Australia, Turkmenistan and Canada as possible future observers, he said.

Source: Bloomberg

Tagged with: • • •
Dec 16

Halliburton Introduces CleanStim™ Fracture Formulation Launches New Microsite on Hydraulic Fracturing Fluids Disclosure

By Curve hydraulic fracturing No Comments »

Long recognized as the industry leader in advancing the science and engineering of the production enhancement technology known as hydraulic fracturing, Halliburton (NYSE:HAL) today announced the introduction of a first-of-its-kind fracture fluid system comprised of materials sourced entirely from the food industry.

The solution, which will be marketed under the trade name CleanStim™ Formulation, is an integral part of the company’s new CleanSuite™ line of products.

“Halliburton pioneered fracturing technology more than 60 years ago, but the safe and efficient use of this technology has never been more important or in greater demand than it is right now,” said David Adams, vice president of Halliburton’s production enhancement product service line. “With the announcement today of our CleanStim™ Formulation and the CleanSuite™ line, we believe we’ve effectively set a new standard for how unconventional resources may be accessed and produced in the future.”

Accessible online at www.halliburton.com/hydraulicfracturing, the microsite includes detailed product information not only for the CleanStim™ Formulation, but also Halliburton’s new CleanStream® Service and CleanWave™ System.  The CleanStream® Service uses UV light instead of additives to control bacteria.  The CleanWave™ System treats wastewater at the wellsite, allowing it to be reused and recycled by the operator – significantly reducing the need for freshwater.

Also included on Halliburton’s new microsite is a description of the company’s advancements in the field of 3-D, subsurface fracture mapping, along with information on how the company’s Advanced Dry Polymer Blender technology is being used to reduce chemical additive usage even further.

Disclosure of Hydraulic Fracturing Fluids Highlighted on Microsite

As part of this effort, the Company also announced the launch of new content on the microsite designed to provide the public with information related to the identity and common uses of the additives and constituents generally involved in the hydraulic fracturing process – additives that typically comprise less than one-half of one-percent of the total water-and-sand-based solution.

“Halliburton has just made available new web pages to emphasize our forthright disclosure of the additives and constituents that are used for several typical wells in Pennsylvania. We believe this effort represents an important and substantive contribution to the broader long-term imperative of transparency,” Adams added.

While the initial focus of the additive disclosure pages are limited to activities taking place in Pennsylvania, where development of the Marcellus Shale is already well-underway, the Company is committed to continuing to provide hydraulic fracturing fluid disclosure information for every U.S. state in which Halliburton’s fracture stimulation services are in use.

Source: Halliburton

Tagged with: • • • •
Dec 14

Environment-Friendly Natural Gas Fuel Of Choice

By Curve Environment, gas, natural gas No Comments »

Environment-friendly natural gas will take the spotlight as the world grapples with the ill-effects of greenhouse gases, which threaten to sharply increase the earth’s temperature.

Energy experts in one voice highlight the pro-environment qualities of natural gas, which helps mitigate the effect of greenhouse gases.

Among all the fossil fuels, natural gas – as well as being the cleanest and most controllable at the point of use – is also the most environmentally-friendly, producing the lowest carbon dioxide (CO2) emissions per unit of energy.

Depending on the quality of fuel, the combustion of natural gas results in at least 25% -30% less CO2 than oil and at least 40%-50% less than coal, according to the International Gas Union (IGU).

The CO2 emissions can be further reduced by using natural gas in high efficiency applications such as in gas turbine based electricity generation. Natural gas, thus, offers unique advantages in terms of greenhouse gas benefits.

The replacement of the coal, which emits higher levels of carbon dioxide, with natural gas will help mitigate greenhouse gas emissions, experts say.

The gas business is also the pioneering industry in the area of CO2-capture and –storage (CCS) that is expected to be an important technology for mitigating climate change.

The twin energy carriers- electricity and hydrogen – both CO2-free at the point of end-use – can be produced from natural gas with CCS ensuring low emissions.

The IGU said about 41% of current global energy-related CO2 originates in electricity generation.

Electricity’s role is expected to increase steadily also in future as more and more countries are industrialised.

It is a widely published fact that some 1.6bn people – about one in four of the world’s population – live without access to electricity.

Unlike electricity, it is not known with any degree of precision how many people globally lack access to clean burning natural gas.

An indication is that in 2006, the European Union with 200mn households had 105mn customers connected to the gas grid, giving coverage of about half the population.

In the US, natural gas is used in 61% of the 160mn households.

In Japan, about 27mn households (out of a total of 52mn) have access to natural gas.

These three regions with about 14% of global population are known to have the world’s most developed and dense gas-grids.

Few other countries and regions are anywhere near this gas-grid coverage at the present time.

The use of natural gas as a fuel for vehicles, the IGU said, is increasing rapidly around the world. It is projected that this end-use sector will increase ten-fold, to 65mn vehicles by 2020.

The degree to which natural gas has succeeded in gaining a favourable public and policy attention regarding climate change mitigation varies from country to country and from region to region, the IGU says.

Where natural gas and coal compete in a growing market, the opinion will often be in favour of natural gas. Elsewhere, attention is turned more in the direction of energy efficiency measures or various forms of renewable energy to the detriment of all fossil fuels, including natural gas.

The nuclear industry is also experiencing a renaissance due to the threat of climate change.

Source: Gulf Times

Tagged with: •
Dec 12

Gas Is Key For Europe To Reach Climate Target At Lowest Cost

By Curve Europe, gas No Comments »

Europe can meet its 2050 ambition of reducing its CO2-emissions by 80 per cent compared to 1990, in a faster and more cost-efficient way if natural gas plays a significant part in the energy mix going forward.

In a report initiated by a group of experienced gas players in Europe and delivered to the EU Commission today, 10 December, highlights how this can be achieved:

- We appreciate the scale of the challenge and the necessity of curbing the CO2-emissions. Our contribution is to focus on how Europe can reach its ambition in a practical and economically viable way, says Rune Bjørnson, executive vice president for Natural gas in Statoil.

- To that end it is our belief that natural gas must play a pivotal and constructive part in meeting this challenge.

According to an analysis called the Optimised pathway conducted by the European Gas Advocacy Forum, Europe can meet its 2050 ambition by switching from coal to gas now to deliver significant reductions in CO2 and rely on established technology between 2010 – 2030 to reduce costs and providing more time for alternative technology development.

By doing so the reduction target can be met at a 400-450 billion Euro lower total costs from 2010-2030 if one compares it to the European Climate Foundation roadmap launched earlier this year. Additional cost savings for the period 2030-2050 could most likely also be achieved.

- The reason why gas plays a vital role in the optimised pathway – especially in the power sector – is because it requires low investments, has relative low CO2 emissions and is a reliable and proven technology, says Bjørnson.

- Natural gas should have a key role to play in EU’s long term energy mix as gas is affordable, abundant and a low carbon fossil fuel Bjørnson underlines.

Abundant: Globally, estimates point to more than 250 years of recoverable natural gas resources at current consumption levels.

Source diversity: For Europe is situated within a 5,000 kilometres of 80% of proven worldwide gas reserves which caters for diversification of natural gas suppliers.

Cleanest fossil fuel: Gas is the cleanest burning fossil-fuel. A gas plant emits 50% less CO2 than a modern coal plant and 60-70% less than an old coal plant.

Affordable: In the power sector gas has low capital cost per megawatt installed.

About the European Gas Advocacy Forum
The European Gas Advocacy Group comprises experienced gas players including Statoil, Centrica, Eni, E.ON Ruhrgas, Gazprom, GdF Suez, Qatar Petroleum and Shell.

The group’s study has focused on the periods 2010-2030 and 2030-2050 with a special emphasis on the power sector.

About EU’s 2020 target and 2050 climate ambition:
EU member states have set itself the target of reducing its CO2-emissons by 20 per cent compared 1990-levels by 2020.

In addition, EU member states agreed in 2009 on an ambition for reduction in green house gas emissions of 80-95 per cent by the middle of the century compared to 1990 levels.

Following this, the European Commission and member states have launched consultations on pathways to reach the 2050 ambition.

About natural gas in the European energy mix:
Natural gas is used for many purposes: as fuel for power generation, in residential and commercial contexts for heating and cooking purposes, in industry applications, as feedstock in the petrochemical and agricultural industry and as a transportation fuel.

Natural gas’ attractiveness is illustrated by its rapid climb in the European energy mix – from a zero to 23% share over just 50 years.

Source: Offshore Energy Today

Dec 08

Major Oil Companies Increasingly Future On Natural Gas With Old Oil Fields Producing

By Curve natural gas, Oil Fields No Comments »

The major oil companies are increasingly betting their futures on natural gas, with older oil fields producing less crude and newer ones either hard to reach or controlled by unfriendly nations.

They are focusing more than ever on natural gas because it burns cleaner than oil and is gaining traction as a fuel for transportation. The latest move came Tuesday, when Chevron made a $4.3 billion deal to buy up natural gas fields in the Northeast.

Earlier this year, Exxon Mobil bought XTO Energy to become America’s largest producer of natural gas. And Royal Dutch Shell expects natural gas to make up half its total global production in two years.

“If you look at most of the big developments now, they’re not about oil, it’s gas,” said Oppenheimer & Co. analyst Fadel Gheit.

The world will continue to run on crude oil for years to come, but even with new discoveries, oil production is expected to flatten out during the next few decades, according to the latest estimates from the International Energy Association.

Far down the road, Gheit believes, Exxon and Shell will lead the energy industry into a new era where oil companies devote most of their efforts to producing natural gas. The Energy Information Administration expects worldwide natural gas production to increase 46 percent from 2007 to 2035, compared with a 30 percent increase in world production of crude and natural gas liquids.

Gas is becoming more attractive to the oil companies because it’s more accessible. While OPEC controls most of the world’s oil reserves, it controls less than half of the natural gas reserves.

In the United States and Europe, natural gas is primarily used to heat homes. About three in five American homes use it for heat. And more and more power plants are using it to generate power. Natural gas is used to generate 23 percent of electricity in the U.S., up from 16 percent a decade ago.

If the country focuses more on reducing greenhouse gas emissions in years to come, the trend should accelerate. Natural gas emits less carbon dioxide than other fossil fuels.

Natural gas is used in small amounts for transportation in the U.S., mostly for city buses and garbage trucks. The oil industry is pressing Congress to add financial incentives for trucking and freight companies to convert their fleets.

Until recently, Big Oil watched the rise of U.S. natural gas from the sidelines, and smaller companies drilled into underground layers of shale. New techniques allowed companies to drill parallel to the ground and hit previously tough-to-reach deposits, helping them tap ever larger bounties of shale gas.

Production costs fell. Drilling rigs started popping up along America’s shale-rich regions in Appalachia, Texas and North Dakota. Experts now say the U.S. is sitting on enough natural gas to last the country for the next century.

This year, Big Oil jumped in. Exxon bought XTO for more than $30 billion, immediately making it America’s largest natural gas producer. XTO so far has helped Exxon increase its natural gas production by 50 percent.

Then Shell agreed to buy East Resources Inc. for $4.7 billion, and China’s state-owned offshore oil and gas company, CNOOC Ltd., invested $2.16 billion in oil and gas fields owned by Chesapeake Energy.

Production jumped to 1.94 trillion cubic feet in August, the highest monthly total since January 1973, according to available government data.

“Production is screaming,” said E. Russell Braziel, managing director of BENTEK Energy, which tracks natural gas prices in the U.S.

The U.S. now holds about 3.82 trillion cubic feet of natural gas in storage, about 10 percent more than the average over the past five years. And the industry keeps pumping more out of the ground.

There are challenges. The same low prices that make the assets affordable have caused some companies, namely ConocoPhillips, to pull back on production. Natural gas has dropped about 24 percent this year.

And people near shale rigs complained that groundwater supplies were contaminated by the industrial chemicals used in the drilling process. The Environmental Protection Agency is studying the possible effects on drinking water and the public health.

Still, most of the big companies continue to press ahead with multibillion-dollar acquisitions.

“When the market is weak, that’s when it’s time to act,” Argus Research analyst Phil Weiss said.

Source: Mining Exploration News

Tagged with: •
Dec 06

Fiat & Chrysler Ditch Hybrid Cars In Favor Of Natural Gas

By Curve hybrid cars, natural gas No Comments »

In the search for the next green car many automakers have pinned their hopes on hybrid technology. The combination of a gasoline engine and battery pack system has had the attention of car buyers with hybrids like Toyota’s Prius to Chevy’s new Volt. Fiat, however, is betting on natural gas to help them grab a part of the green car market in the US.

Fiat’s beef with hybrid cars is all about money. Instead of sinking a lot of cash into developing new technology like batteries, why not use their knowledge of cars powered by natural gas to crack the US market? After all, the US is the world’s largest producer of natural gas, the fuel is pretty cheap to produce, and it is cleaner than regular gasoline.

The Italian automaker has a long history of using liquefied natural gas (LNG) or compressed natural gas (CNG) to power their cars. Fiat has locked up 80% of the consumer based market in Europe by promoting the technology through flex-fuel type cars that operate via natural gas as well as gasoline.

While Fiat has hinted about adding natural gas engines to Chrysler’s current lineup, it seems that their latest move may be targeting the commercial market. 55% Of natural gas based light commercial vehicles in Europe are Fiats, a number that includes everyday transport vehicles like delivery vans or postal trucks. Instead of relying on the 1,300 natural gas stations in the US, these fleets could be managed through a single fueling point at a regional hub or central office.

LNG or CNG engines aren’t as dirt cheap as their gasoline cousins but they are still cheaper than the average hybrid motor. There’s only a $3,000 difference between the cost of a gasoline based car when compared to one powered by natural gas. Fiat estimates that the additional cost for a hybrid car is about $8,000.

Fiat and Chrysler don’t have solid plans yet to bring natural gas cars and trucks to the US, but they will soon join the natural gas vehicles association in Washington D.C. The duo may only be in the planning stages but they’ve hit on an important change in consumers; MPG is the new MPH. Corporations and everyday consumers are more concerned with the intrinsic value of their car rather than how fast it travels. Until there’s a strong infrastructure for EV’s, car buyers and fleet managers will be looking for affordable options rather than dealing with high gas prices.

Source: Tainted Green

Dec 05

Natural Gas: Cheap and Chic In Climate Talks

By Curve natural gas No Comments »

As countries gather in Cancun, Mexico to figure out a coherent plan to reduce greenhouse gas emissions, you can bet that natural gas will get plenty of attention. That’s because natural gas production has boomed – to the point of oversupply by some estimates — and it’s less polluting than coal, the devil in the climate change fight.

The U.S. could see 21 percent of its electricity in 2011 coming from power plants running on natural gas, and that stake will likely grow to 40 percent by 2035, according to a study released Monday by the engineering and construction firm Black & Veatch in Kansas. At 40 percent, natural gas will become the dominant source of electricity for the country. At the same time, renewable electricity such as wind and solar could account for 4 percent in 2011 and 11 percent in 2035. Hydroelectricity will add another 7 percent to the pie in 2011 and 6 percent by 2035.

The projection is much more bullish about natural gas’s role in the country’s electricity supply than the U.S. Energy Information Administration’s outlook, which was published in May this year and is set for an update later this month. The EIA said natural gas accounted for 21 percent of the sources in 2008 and, depending on the pace of renewable energy generation, policies and pricing, it could still account for 21 percent in 2035. The EIA sees renewable electricity taking up 17 percent of the supply in 2035 (including hydro).

Natural gas has won fans in recent years as the U.S. struggles to figure out its short- and long-term energy policies, particularly in the context of reducing greenhouse gas emissions. Successes by natural gas producers to extract the fossil fuel from shale formations in North America have positioned natural gas as a reliable, long-term source of energy. That makes it appealing to lawmakers who like to use “energy independence” as a rallying cry for their causes, even though the term really should refer only to oil, which has no direct impact on electricity generation.

So much natural gas has been flowing through distribution pipelines that T. Boone Pickens, a natural gas evangelist and investor, told Bloomberg last month that he was in no hurry to invest in natural gas because no good profit can be made from it.

“Natural gas is oversupplied and you’re looking at a $4 to $4.50 natural gas next year. 2011, you have to shut down some of these rigs because they are not making money. You’ll have to have $6 gas to make money off of a lot of the wells being drilled,” Pickens said.

The glowing profile of natural gas is sometimes seen as a threat to renewable electricity development. The rational is that utilities will favor investing in natural gas-fed power plants to help them meet goals to reduce carbon emissions and do so at the expense of investing in renewable energy. Coal-fired power plants generate twice as much emissions as the natural gas variety, an MIT report said.

Black & Veatch’s Mark Griffith doesn’t believe natural gas will have that big of an impact on renewable electricity development. He pointed out that utilities are building solar and wind farms – or signing contracts to buy those sources of electricity from power producers – because they have to comply with state mandates. Over half of the states in the country have policies (renewable portfolio standards) that require their utilities to buy and sell certain amount of renewable electricity.

However, natural gas prices do have an impact on prices for renewable electricity. California, for example, has used the wholesale prices for natural gas-based electricity to calculate some of the incentives for solar energy. “If you are talking about (renewable portfolio standards), then natural gas price is a factor, but it’s not a driving factory of how many megawatts will get built,” said Griffith, a managing director at Black & Veatch. But lower natural gas pricing could lower the amount of profits made by renewable energy developers, he added.

Source: Gigaom

preload preload preload