Sep 07

Tom Ridge: Shale Gas Makes America Safer

By Curve shale gas No Comments »

 

The former head of Homeland Security is an advocate for shale gas, having been a lobbyist for the Marcellus Shale coalition.  In a speech today, he cuts to the chase and gives many reasons why shale is a cleaner and safer alternative to what we already use:

Former Homeland Security Director Tom Ridge kicked off the Marcellus Shale Coalition’s “Shale Gas Insight” conference with a blunt message: the more natural gas the United States extracts from shale rock, the safer the country will be.

How’s that work? The Republican began his morning speech with the well-worn argument that the U.S.  imports way too much oil from foreign countries. He called federal energy independence plans “a mirage,” adding, “In 2010, our bill for foreign oil was a quarter trillion dollars….we still have no national energy policy

“We now import 3.5 billion barrels [of oil] annually,” he said, “compared with roughly a third of that in 1973.  …It’s one thing to get oil from counties like Canada…. But we also import from counties who aren’t such good friends. Nations such as Algeria and Iraq and Saudi Arabia and Syria and Nigeria and Venezuela and Chad. All of those countries are on the State Department’s travel warning list. Now think about this picture and ask yourself what’s wrong…we travel, in this country, on their oil. But it’s not safe for us to travel in their country.” Ridge went on to call the United States’ relationship with these countries “toxic, both literally and figuratively.”

“We need a national all-in energy policy that’s realistic and practical, not rhetorical and illusory.” And predictably, given the fact we’re here at a conference about natural gas drilling, Ridge said hydraulic fracturing and shale gas should be the cornerstone of that new policy. “We are truly an energy-rich country,” he said. “And natural gas should be at the forefront of the energy revolution.”  The more energy the United States extracts from within its borders, Ridge argued, the less it will need from the Middle East. “Made in America, when it comes to energy, is in my mind just a synonym for national security.”

Ridge spent about a year lobbying for the Marcellus Shale Coalition, and clearly believes in the industry group’s product. “When gas is taken from the ground by hydraulic fracturing, it provides the least environmental distribution of any current base load fuel,” he said. “And when it is used, it has only half the carbon emissions of coal, and virtually zero particulate emissions.” A substantial number of people – many of whom are protesting outside the convention center – are concerned about hydraulic fracturing’s safety. They’re worried the chemicals used in the process will contaminate drinking water. Ridge dismissed the worry as “phony hysteria.”

Ridge promised gas extraction will improve the economy, too. “Jobs that arise from clean energy are not just for those in the energy industry, but for those in virtually every industrial activity,” he argued. “Transportation, manufacturing, construction, power generation, and even more benefactors. And they flow to schools, community development, recreation and culture activities.”

Ridge dinged the federal government for not investing more money in “there’s not much discussion within the political class about natural gas. It seems at times to be about everything but natural gas.” He called subsidies for renewable energy efforts “baffling,” adding, “most renewables are very costly, and will take awhile to become reliable, sustainable regional and economic sources of energy. I’m not saying we should stop pursuing them…but clean energies still cost vastly more than fossil fuels.”

Toward the end of his speech, the former governor tried to tie natural gas to the country’s long history of energy extraction. “We must decide whether we will lead the transformation, or be led by others. I prefer the former.” He tied natural gas into the country’s long history of extraction. “Coal powered America into the industrial age in the 19th Century. Oil propelled American citizens into the transportation age of the 20thCentury. Natural gas should lead the energy revolution, and be the foundation fuel, of the 21st Century.” Of course, both the oil and coal boom devastated Pennsylvania’s natural resources. Ridge said gas drillers have learned the lessons from those extraction cycles.

Source: State Impact

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Jul 11

Smart Fracking

By Curve hydraulic fracturing, natural gas in the USA, shale gas, USA No Comments »

 

The following article was written by John E. Sununu, a former US senator from New Hampshire and a regular contributor to The Boston Globe:

Extracting natural gas from shale is safe and economically sensible

Enlightened moments in politics are few and far between. Populism has a lot to do with it; playing to fear, anger, and other emotions is a safe move politically, and what the media love most.

That’s why New York Governor Andrew Cuomo’s decision to lift a ban on hydraulic fracturing – also known as “fracking’’ – should be celebrated as a victory for rational thought. His administration is now preparing regulations allowing access to 85 percent of the shale gas beneath the state. This has members of the hard-core environmental lobby gnashing their teeth. Their dramatic, and often misleading, claims drove last year’s ban in the first place. Cuomo’s move also strikes a blow for states’ rights and encourages a balanced approach to energy policy – and highlights some cool engineering as well.

Fracking uses high-pressure fluid to crack open shale rock formations thousands of feet below the surface. The resulting fractures allow gas and oil to flow more freely and be recovered economically. In their effort to stop the practice, environmental groups raised the specter of drinking-water contamination, excessive water use, and other supposed risks. The hyperbole about this method comes somewhat unexpected, given that the process has been around for over 50 years.

Almost three decades ago, I spent the summer in a hydraulic fracture lab in a musty basement a stone’s throw from the Charles River. As a rookie, I mostly cast cement blocks used to simulate the shale formations. Researchers injected fluid into the blocks at high pressure and measured the speed at which cracks would grow. Over months of trial and error, we learned to predict and even control the direction of the cracks by putting pressure on the outside of the cement blocks.

For a few weeks each year, the professor supervising the lab would head out to the field to conduct larger-scale tests on working wells. Back then, high operating costs coupled with low oil prices meant that fracking was limited to specific, high-yield areas. About five years ago, however, improvements in horizontal drilling finally came together with better simulation and monitoring of crack growth to make the entire process a big economic winner.

The results have been dramatic for production of both oil and gas. During the past three years, proven reserves of shale gas have more than tripled. Estimates of recoverable reserves in the United States have soared to over 800 trillion cubic feet – roughly 35 times America’s annual consumption – from shale gas alone. North Dakota’s Bakken oil field, a marginal producer five years ago, now pumps 400,000 barrels per day. And yet the full potential of reserves such as the Marcellus shale beneath Pennsylvania and New York still haven’t been fully measured.

In New York, rhetoric came face to face with hard facts. Despite decades of use, fracking fluids – which typically contain small amounts of acids, anti-microbials, petroleum distillates, and other chemicals – have never been found to contaminate groundwater. That’s because the shale formations are typically thousands of feet down, far below aquifers and isolated by impermeable rock. Over 99 percent of the fluid used is water, but to address the potential for surface spills, most states regulate its transportation and now disclose its contents. The environmental records of both the process and the gas it produces are pretty strong, but the economics are even more compelling.

Job creation and tax collections in Pennsylvania counties producing shale gas have increased significantly during the past three years. Their neighbors have not fared so well. Governor Tom Corbett calls the investment boom, started under Democratic Governor Ed Rendell, “the foundation of a new economy.” New York could either ignore the economic development occurring in its own back yard or participate.

Above all, this transformation is a lesson that energy policy shouldn’t pick winners and losers. No Senate committee or presidential order declared natural gas “the energy of the future’’ (that would be hydrogen, cellulosic ethanol, carbon-free coal, and unicorn tears). Gas is cleaner than coal or oil, but as a fossil fuel, it still makes purists wince. Some critics even use today’s low natural gas prices as a knock against fracking. In other words, high fossil fuel prices are a reason to subsidize renewable energy production, but low fossil fuel prices are a reason not to invest in fossil fuel production. Please, let them invest.

Against these odds, a mostly sensible outcome has been reached. Fracking will go forward in New York. The industry will continue to innovate, improve productivity, and reduce production costs. Consumers will benefit, the economy will grow, and America will use more natural gas.

And that, in the end, will drive the environmental lobby crazy.

 

Source: The Boston Globe

 

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Jun 28

Financial Times on Shale Gas and 3Legs Flotation

By Curve natural gas in Europe No Comments »

 

The Financial Times has been looking at the recent flotation of oil and gas companies, including 3Legs Resources, on the London stock market.  What will their impact be on the energy business for the short and long term and what does the future hold for shale gas in Europe?

Read the article here

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Jun 16

3Legs Announces Admission to Trading on AIM

By Curve natural gas in Europe No Comments »

Further to its announcement on 9 June 2011, 3Legs Resources, a company focussed on the exploration and development of unconventional oil and gas resources with a particular focus on shale gas in Europe, announced that its entire ordinary share capital of 84,782,544 Ordinary Shares was admitted on Tuesday to trading on AIM, a market operated by the London Stock Exchange plc. Unconditional dealings in the Ordinary Shares commenced under the ticker symbol 3LEG.

3Legs Resources was established in early 2007 to focus on the exploration and development of unconventional oil and gas resources, with a particular focus on shale gas in Europe.

3Legs Resources has acquired six exploration and prospection licences covering approx. 1,084,000 acres (gross) in the onshore Baltic Basin, a region considered to be one of the most promising shale basins in Europe. The Company’s primary targets in the Baltic Basin are Silurian and Ordovician organic-rich black shales.

In addition to these assets, the Company also holds onshore exploration licences over acreage near Krakow in southern Poland and in Baden-Württemberg in south-west Germany, with two further licences under application in France.

In August 2009, the Company entered into various agreements with ConocoPhillips. These agreements committed ConocoPhillips to provide financing for initial exploration activities in the Baltic Concessions. ConocoPhillips committed to fund 100 per cent of the costs of an exploration programme in the Baltic Concessions, consisting of 3D seismic surveys and up to three wells in return for an option to acquire a 70 per cent interest in the Baltic Concessions.

To date, 3 Legs and ConocoPhillips have completed three seismic surveys and drilled two vertical test wells. The fundraising will be used to pay for drilling commitments primarily in the Baltic Basin in Poland.

Source: www.energy-pedia.com

Read the announcement: official release

 

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Jun 03

Natural Gas Futures Surge to 10-Month High

By Curve natural gas, natural gas in the USA No Comments »

NEW YORK— Natural-gas prices jumped to a 10-month high after the U.S. posted a smaller-than-expected increase in the amount of the fuel in storage, relieving some pressure on a well-supplied market.

The heat wave that hit the East Coast, Southeast and Gulf Coast regions last week spurred widespread use of air conditioning for the first time this year, resulting in increased electricity demand. While this seasonal shift was expected, market participants underestimated how much natural gas was used in electricity generation, as many nuclear power plants are down for maintenance, said Pax Saunders, an analyst with Gelber & Associates in Houston.

Futures surged in the seconds following the Department of Energy’s release of natural-gas storage data on Thursday and were up as much as 4.9% intraday before settling 16.5 cents, or 3.6%, higher at $4.794 a million British thermal units on the New York Mercantile Exchange. This is the highest close since July 2010 and the biggest one-day dollar gain in more than two months.

The amount of gas in U.S. storage rose last week by 83 billion cubic feet, according to the Energy Information Administration, a wing of the Energy Department. Expectations were for a increase of 93 billion cubic feet. Natural-gas inventories usually fall in the winter due to heating demand and rise in the summer as supplies are replenished.

Mr. Saunders attributed the price spike to “a lot of itchy, trigger fingers” in the market, meaning that Thursday’s number—and a “big miss” by analysts’ estimates—was just the sign of robust summer demand bullish traders were waiting for.

Natural gas accounts for about a quarter of U.S. electricity generation, and power demand typically rises along with air-conditioning use as warm summer weather arrives.

The reaction to Thursday’s inventory report highlights the data’s relevance to the isolated U.S. natural-gas market. Gas-futures prices tend to closely track developments in the physical market, so traders pay attention to weather forecasts and the status of power plants. Gas prices tend to show little reaction to moves in currency markets and foreign economic news because the U.S. lacks terminals capable sending the fuel to global markets.

In contrast, crude-oil futures ended higher Thursday despite Energy Department inventory data showing an unexpected rise in oil stockpiles and a larger-than-seen increase in gasoline inventories.

Robust power-sector natural gas use is expected to continue this month, with hotter-than-normal temperatures seen from the Southwest through the Midwest and East Coast for the next two weeks, according to private forecaster WSI Corp.

“You’ve got early indications that we’re going into a hotter-than-expected summer,” said Rich Ilczyszyn, a senior market strategist with brokerage Lind-Waldock. “That may give us an increase in demand.”

Under the burden of the persistent supply glut, natural gas was among the worst-performing commodities in 2010. Prices of raw materials from crude oil to copper and agricultural staples such as wheat and cotton have all touched multiyear highs in recent months, and natural gas may be receiving a boost as investors look for cheaper physical assets, Mr. Ilczyszyn said.

Natural gas is up 8.8% year to date, while crude oil is up 9.9%.

“Natural gas has not really participated in these huge commodity moves,” he said. “As an investor, do I want to buy oil at $100 [a barrel], or natural gas at $4.50?”

Source:  Wall Street Journal Online

 

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Apr 30

Why Shale Gas and Fracking May Be Part of Our Clean Energy Future

By Curve Environment No Comments »

Author Boyd Cohen recently posted an article at TriplePundit.com, postulating how shale and unconventional gas may play a role in the US and international community’s clean energy futures:

I must admit that I have been heavily focused on renewable energy sources such as wind, solar, hydro and biofuels as the medium-long-term path towards meeting our growing energy needs while minimizing our impacts on the climate and the environment.  And recently I spoke out against nuclear’s role in the long-term energy mix.

I am still a big believer in renewables as a key part of our energy mix. However we have yet to scale renewables to the point that we no longer need fossil fuels.  In the U.S. for example, only 7% of total energy consumption comes from renewables.

In our book, Climate Capitalism, Hunter Lovins and I make a strong argument for the potential for renewables in the short term to supply most of our energy needs.  I stand by our claims.  However, I also am increasingly convinced that we need to clean our fossil fuel supply ASAP.

For too long we have been dependent on coal and oil to meet our energy needs.  Both of these fuels are relatively high in calorific value yet too high in carbon emissions.   While I have written about ways to clean up the coal industry, both from the supply side through projects like coal mine methane as well as from the energy production side, mostly from co-firing coal with low-carbon biofuels like torrefied wood, I believe we need to take a serious look at gas, and particularly unconventional gas reserves.

Read the full article at Triple Pundit.

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Apr 18

Polish environmental ministry promises no roadblocks to shale gas

By Curve Poland No Comments »

The possibility of abundant natural gas from Polish shale formations has attracted the interest of operators from around the globe. Though exploration is still in very early stages, estimates of reserves have varied wildly, from as low as 5 Tcf to as high as 45 Tcf. For the more than 40 companies holding concessions in the shale regions, there is enough potential to justify a major push. World Oil spoke with Marta Wagrodzka, a shale gas specialist in the Polish Ministry of the Environment, about the development of the country’s shale resources and the government’s role in promoting that development.

World Oil: Could shale gas allow Poland to become energy independent in the future?

Marta Wagrodzka: Well, so far we don’t have any estimates of future reserves. The exploration that is going on at the moment is in a rather early stage. We certainly have hope for developing large reserves—it will strengthen the base of our resources. We are looking forward to the results from the current exploration.

WO: Is the Polish government offering special incentives to foreign companies to explore in the shale regions?

Wagrodzka: No, we do not divide domestic and foreign companies. They both are treated equally. There are the same rules and obligations for foreign companies as for Polish companies. Also, we don’t have any special incentives as regards shale gas exploration. We use the same rules as for conventional oil and gas exploration.

WO: Is the government looking to take a percentage stake in Polish shale gas?

Wagrodzka: We have the royalty system and the concessions fee system, which will apply to shale gas as well. The royalty rates are set in law.

WO: Who in the government is responsible for environmental protection from shale drilling, and what are the rules?

Wagrodzka: We have a General Directorate for environmental protection, which is an institution in the Ministry of the Environment. The Polish system derives from the European legislation. We have implemented several environmental directives into law. According to these laws, activities that could have a significant impact on the environment require an impact assessment and the obtaining of an environmental decision. This procedure is conducted at the local authority level.

It depends on the scope of the geological program, the scope of the work, and also depends on the environmental sensitivity of the area. It varies. For disposal of water, there is another permit, the water law permit, which specifies what amounts of water a company can take and how to dispose of this water.

The shale region is not very heavily populated, apart from the immediate vicinity of Warsaw and Gdansk. The average is 20 to 60 people per square kilometer, which is not very high. Most of the area where the shale gas exploration is taking place is agricultural.

Read the full interview at WorldOil.com.

 

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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

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Nov 19

A European Kuwait?

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

According to geologists, Poland could become the largest gas supplier in Europe after Norway and Russia. It would make the eastern European country rich – much richer than previously assumed.

Winter is approaching – a time in which Europe particularly feels Russia’s grip on the energy market. This power play has caused Poland many headaches. But new know-how in gas production could mark a turn in events.

Practically every winter, Russia and its neighbors Ukraine and Belarus disagree on gas supply technicalities. This dispute has endangered deliveries to Poland.

The Baltic Sea Pipeline, which will connect western European markets with major Russian gas fields, has made matters worse. Warsaw’s politicians feel they will be at Moscow’s mercy because Russia can then shut off the supply without endangering its deliveries to Germany.

But this headache could soon be over. The largest deposits of shale gas in Europe are assumed to be located on Polish territory. New technology from the United States could make it possible to exploit these gas reserves. Test drillings are planned all across the country.

According to geologists, Poland could become the largest gas supplier in Europe after Norway and Russia. It would make the eastern European country rich – much richer than previously assumed, said energy expert Pawel Nierada from the Sobieski Institute in Warsaw.

“Conservative estimates already show that Poland could suddenly become a serious exporter on the European gas market,” Nierada said. “The reserves exceed our country’s consumption many times over. It’s hard to imagine what it would be like if the more optimistic estimates of the US government were to turn out to be true. Then, here in Poland, we would have more gas than Norway.”

Skeptics question new technology

Natural gas which is produced in Europe and Asia has so far been relatively easy to access. It lies in enormous bubbles under impermeable layers of earth, for example out of clay. Shale gas, on the other hand, is located in the middle of rock beds.

It’s nothing new that this valuable resource exists there. But no one was ever interested in it before, because production was considered to be difficult and therefore uneconomical. But that has changed.

In the United States, shale gas already covers 20 percent of gas consumption. New technology used over the past few years has made this possible. Special drills first make their way into the ground vertically and then, when they reach the rock bed with the gas, bend into a horizontal position. There, they pump a chemical liquid into the ground, which causes the rock bed to burst open. The gas can then flow.

But many people are skeptical about this procedure, Nierada said.

“There are also critical voices which say that the technology is still in its infancy – the experts from the Russian gas company Gazprom, for example,” he said. “But in the United States, the production works. And international firms believe it will be successful in Poland, too. Otherwise, they wouldn’t have already invested so much money in licenses and test drilling.”

The Polish government has already issued some 60 licenses for test drillings, mainly to American companies. It’s no wonder that this is cause for concern further to the east – in Moscow. After all, gas exports make up a significant part of Russia’s gross domestic product. They could stagnate or even decrease as a result of the Polish finds.

Gazprom has already admitted that it isn’t able to sell as much to the United States as it used to because of the shale gas reserves there. In a report, the company even said shale gas could “fundamentally change” the worldwide gas market. [...]

Even if there are factual reasons for the skepticism, experts have long criticized Polish politicians for being too passive. For years, Poland has relied on imports from Russia without even considering the exploitation at least of conventional gas resources in the country. This was mainly due to the monopoly of the state-owned gas firm PGNiG.

“The company was never interested in producing gas itself,” Nierada said. “It earned its money very easily, after all, by buying gas from Russia and simply adding its margin. The company didn’t care about how high the final price was.”

This passivity is now costing Poland dearly. In order to have enough gas for the coming winter, the state-owned company had to close a deal with Gazprom for additional gas deliveries. It even risked a battle with the EU Commission, as Brussels said Russia was dictating unacceptable conditions. The two sides finally reached an agreement at the end of October ensuring deliveries of Russian natural gas until 2022.

But such problems will possibly no longer exist in a few years – at least, not if Poland turns into a European Kuwait.

Source: The Global Warming Policy Foundation

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Oct 26

The Science of Shale Gas: National Geographic

By Curve energy market, National Geographic, natural gas, natural gas in the USA, shale gas, Shale gas production No Comments »

A new pictorial spread by National Geographic is lending some scientific insight into the process of drilling for shale gas in the US.

Highlighting some of the key differences between oil production, and shale gas production, the article provides pictures and descriptions of some of the highly specialized equipment needed to extract shale gas.

“Just above the target, the driller begins to “land the curve,” and continues to drill horizontally into the shale—typically a distance of 3,500 feet (1,070 meters) or more,” the magazine writes below a photo of dozens of green pipes. “By reaching more surface area, the producers are able to capture more fuel. Using the measure “Mcf,” which translates to “thousand cubic feet,” energy companies say horizontal wells in the Marcellus shale yield from 1 million Mcf to as high as 10 million Mcf or 15 million Mcf per day, compared to just 100 Mcf to 500 Mcf of natural gas per day for conventional Pennsylvania wells.”

The pictorial also talks about the recent shale boom in the US, the role of both independent and major companies in the exploration and extraction of shale, and the potential lucrative benefits of this new energy market.

More pictures: National Geographic

Source: Natural Gas For America

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