Feb 16

 

In an interview with Bulgaria’s TV7, Traicho Traikov, the nation’s Minister of Economy, Energy and Tourism, shared his discussion with France’s Energy and Industry Minister Eric Besson.

Bulgaria and France have both taken steps to halt the exoploration and production on unconventional hydrocarbons (shale gas and shale oil), using the process of hydraulic fracturing.

Traikov said that he had held talks with Minister Besson, who had implied that the shale gas debate would soon be renewed in France.

The Bulgarian minister also alluded that “the defenders of the status quo” has been active in the shale gas debate in Bulgaria, which he expected would also be renewed.

“This is a precious resource for achieving Bulgaria’s energy independence and if we can use it safely, I do not see why not,” commented Traikov.

Source: Natural Gas for Europe

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Feb 09

 

Following on from the story earlier this week on Germany’s renewed investment in the unconventional gas industry, we’re publishing the original piece from “Handelsblatt” detailing the announcement from the head of the company’s Central European Operations, Gernot Kalkoffen. An addendum of our own – we’ve used Google translate here with a bit of our own tidying up, so please take that into consideration!

International energy companies rely on vast natural gas fields in North Rhine-Westphalia and hope to generate billions of dollars in revenue. The U.S. oil giant Exxon Mobil plans to invest heavily in “Dallas in Münster” to search for sources of natural gas. ”We expect to invest in the hundreds of millions during the exploration phase,” said Gernot Kalkoffen, head of Exxon Mobil Central Europe.

Just how high will the sum actually be, depends on whether the gas also exists in the concentration necessary to benefit the economy. ”If successful, this could be mean an investment of billions of dollars,” said Kalkoffen. This was the first time he had spoken publicly about the potential for exploration.

Nine companies want to search for natural gas and have secured options on several areas of the province. Overall, North Rhine-Westphalia could be harbouring reserves of 2 100 billion cubic meters of gas, the second largest natural gas deposit in Europe.

The benefits of success for the state would includ mining royalties and new jobs. In addition, municipalities collect the business taxes, when natural gas is mined on their territory. An example of this is in Lower Saxony, where a total of 27,000 jobs have been created by natural gas. Gernot Kalkoffen, chief of the Exxon Mobil Central Europe, spoke exclusively with Handelsblatt about the find.

Handelsblatt: “Mr. Kalkoffen, Germany is not in a gold but in a GAS rush. Do you think that the deposits are economically viable?”

Kalkoffen: “We are still at an early stage of exploration. But the theoretical potential is relatively large. The question is whether the gas is present in sufficient concentration to promote economic growth and stability.”

Handelsblatt: “The first test drillings have been carried out, how do the results look?”

Kalkoffen: “If you’re looking for an economical assessment, then it’s too early to tell. For unconventional gas, there are two components that have not been promoted in Germany: gas in coal seams and shale. Exxon Mobil has made two coal seam drilling holes and four wells in shale gas. Both need to be investigated further.”

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Feb 03

 

France, which last year banned oil and natural-gas extraction from shale rock, should keep experimenting with the technology if it wants to curb reliance on imports, the nation’s oil industry lobby said.

The country should use “all means” to cut purchases of energy supplies from abroad, the Paris-based Union Francaise des Industries Petrolieres said today in a statement. UFIP also urged France to revise its mining code so that the public and local government are more “closely associated” with projects.

Total SA , based in Paris, and international peers have been hurt by France’s ban on hydraulic fracturing, or fracking, which the government says may harm the environment. The process, which has made the U.S. the world’s largest gas producer, involves pumping water and chemicals into rock to release hydrocarbons.

The ban, the first of the technology by any country, has suspended shale exploration at permits around Paris and in southern France. Oil companies including Total, the nation’s largest, and Toreador Resources Corp. held licenses for shale exploration.

The decision to outlaw fracking curtailed operations for energy companies already contending with dwindling refining margins. French oil-product demand fell 1.3 percent last year to 77.8 million metric tons, contributing to refiner losses of about 800 million euros ($1.04 billion), UFIP said.

Lower profits from processing crude have forced refiners to cut costs and shut plants across Europe. In the past two years, LyondellBasell Industries NV, Petroplus Holdings AG and Total have decided to stop refining at sites in Berre, Petit-Couronne, Reichstett and Dunkirk, leaving France with eight working plants, compared with 24 in 1977.

Refining margins slumped to an average of 14 euros a ton in 2011 from 21 euros a year earlier, according to UFIP. French refiners lost 1 billion euros in 2009 when margins averaged 15 euros, and “hundreds of millions of euros” more in 2010, the group said previously, estimating that margins of about 25 euros are needed for profitable operations.

The French oil companies also called today for “minimum service” laws for ports to avoid strike disruptions. The crippling of operations at crude-import hubs in 2010, combined with strikes at refineries, led to shortages at the pumps.

Source: Bloomberg

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Jan 26

 

The San Francisco Chronicle explains to readers why shale gas production is keeping their gas bills lower this winter:

Natural gas prices that slumped to a 10-year low this month could save U.S. consumers $16.5 billion on home energy bills over the course of a year, according to a senior economist at the U.S. Federal Reserve.

U.S. households might see total savings from lower gas prices of as much as $113 billion a year through 2015, including tack-on effects such as lower product prices and higher wages generated by cheaper fuel, according to energy industry consultants IHS Inc.

The projected savings is “an unbelievable amount of money,” said Greg Ebel, chief executive of Spectra Energy Corp., during a Jan. 17 interview. “That’s better than any tax cut you’ve seen out there, better than any government handout.”

If consumers end up pocketing more than $100 billion due to low gas prices, it could add a “significant” piece to U.S. gross domestic product growth for 2012 or 2013, said Robert Solow, professor emeritus at the Massachusetts Institute of Technology in Cambridge, who won the 1987 Nobel Prize in economics. “If that figure is right, it’s a substantial amount,” Solow said in a telephone interview yesterday.

The savings realized by the nation’s 113 million households will vary depending on location and how much gas makes up the home’s total energy bill. Gas utilities are passing along the lower prices they’re paying for the fuel because of a glut of new domestic production from hydraulic fracturing and horizontal drilling in shale formations.

The price of gas has plunged about 30 percent since the end of October on mild weather and oversupplies, according to data compiled by Bloomberg. Natural gas for next-month delivery fell to $2.322 per million British thermal units on Jan. 19, the lowest price since February 2002. Gas settled at $2.728 yesterday.

Consumers will likely spend about 95 percent of the direct savings they see from their gas bills, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University in Dallas. While that amount is a fraction of the $10.245 trillion in consumer spending for 2010, “it’s a step in the right direction,” Solow said.

Electricity prices, historically tied to the gas market, also are falling, although not necessarily for consumers. That’s because many power companies have raised rates to upgrade an aging power grid, install pollution controls and build new generators.

The typical U.S. household gas bill this year would drop to $323.50 from $468.80 in the previous year at an average gas price of $2.50 per million British thermal units — a savings of $145.30, said Mine Yucel, vice president and senior economist at the Federal Reserve Bank of Dallas.

Residents are forecast to pay about 25 percent less this winter for gas used in stoves, furnaces and fireplaces than they did in 2008, when the fuel last touched highs of more than $13.50, according to the U.S. Energy Information Administration.

“I think of shale gas as a real game-changer for consumers of natural gas,” said Hank Linginfelter, executive vice president of Atlanta-based AGL Resources Inc., in a telephone interview. “It’s having a significant impact on prices.’

AGL Resources, the largest standalone local U.S. gas distribution owner, said December bills have fallen on average 25 percent from a year ago at its utilities in seven states.

Iowa gas bills fell about 19 percent in December compared to the same month a year ago on lower demand and prices, MidAmerican Energy Co., owned by Warren Buffett’s Berkshire Hathaway Inc., said. Piedmont Natural Gas Co., based in Charlotte, North Carolina, has proposed cutting rates next month that would bring the average bill down by 40 percent since 2008.

Source: San Francisco Chronicle

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Jan 12

 

A presentation at the European Unconventional Gas Summit in Poland has shown the real face of unconventional gas exploration – and is encouraging the whole world to take a look:

They were images that did look a little bit destructive, images rarely – if ever – seen at an unconventional gas conference in Europe: a huge land moving “vibrator,” equipment that was leaving a giant furrow on the farmland in its path.

The pictures belonged to Jakub Kostecki, CEO of New Gas Contracting, a provider of sourcing, landman and permitting services to the nascent oil and gas industry in Poland, who showed his pictures from the ground to attendees at the European Unconventional Gas Summit in Krakow, Poland.

“When we get to local communities and say there will be a small footprint left by what we are all doing we have to remember that they will remember this picture,” he explained. “Of course there’s nothing wrong with this as long as there’s a crew right behind the vibe to appraise the damage and another one right behind them to fix it.

He recalled that many of the communities his company worked in had seen screenshots and video of vibrators “lurking in the forests,” an image that had been played over and over on Polish television.

Kostecki explained, “Local communities will have seen these images a couple of months before seismic crews come into the area.”

“If you take the ostrich approach – hiding your head in the sand – that’s not going to work,” he continued. “Some regions of Poland are used to seismic acquisition. Others are not. In places like Ilawa in the north, which has never seen vibes, this needs to be explained to the community. They need to be told what’s going on.”

He said that the visibility of these issues would become higher as activity increased in Poland.

“Most of the acquisition in Poland has been 2D. When the 3D, 3C and VSP work starts there will be a lot more equipment and people on the ground. Next year there will be many more crews and a lot more issues.”

In terms of wellsite permitting, Kostecki said: “We provide landman services, which basically means that we help the operators enter parcels in Poland and put rigs on the ground. O&G operators will encounter serious delays in Poland because their land issues aren’t sorted properly.”

He said his company, New Gas Contracting, was in the process of securing 220,000 permits for one of the 2D programs. In addition to providing landman services and wellsite permitting, NGC was negotiating with local landowners, and gminas, on where to set up rigs.

“Many (O&G companies) go in where it’s easiest to get equipment. Others will look at the plot from a technical standpoint – where the sweetspot is,” he said. “Still others will negotiate until they get the right price.”

Kostecki explained that after 8 September local communities had seen what a well looked like. “The 10 wells already drilled in Poland have made the public aware.”

He noted that because the shale gas industry was made up of majors, supermajors, and small companies from all over using different approaches with different corporate cultures, it affected how each of them interacted with local communities.

He showed a photo of a drilling site which he considered well organized.

“We need to remember that the local authorities are the local population, so you need to tread lightly,” opined Mr. Kostecki, who said that there could be up to 300 wells drilled in Poland by 2013.

“We’re talking about a lot of land, a lot of wells. It will be a huge issue and everybody needs to have a strategy going forward.”

In terms of roads, he said access was a huge issue in Poland. “The road capacity tonnage is way too low and the way we deal with communities affects what kind of exemptions are available. There’s a lot of talk about more federal, more standardized regulation,” he said.

He added, “A lot of traffic is needed to get the seismic, drilling and fracking equipment onto a given piece of property.”

Source: Natural Gas for Europe

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Dec 21

 

Natural gas giant Encana Corp. is stepping up an unusually public battle with the U.S. Environmental Protection Agency over water-contamination findings that threaten to fuel opposition to the industry’s controversial drilling methods.

The Calgary-based natural gas giant hosted an hour-long presentation Tuesday, detailing errors it believes the EPA made in its study concluding natural gas wells in Wyoming controlled by Encana contaminated the area’s water. Encana’s criticism ranged from EPA lab results to methodology and the agency’s understanding of geology and hydrology.

“It is our belief the EPA made critical mistakes and misjudgments in almost every step in the process – from the way it designed the study, to the way it drilled and completed its wells, to the way it collected and interpreted the data, and to its decision to release a preliminary draft report without independent third-party review,” said David Stewart, the environment, health and safety head for Encana’s Wyoming operations.

Canadian oil and gas companies rarely voice their opposition to regulators so openly and bluntly, given the power the agencies wield over their operations. But experts say Encana is making a worthwhile gamble, given what’s at stake.

The fight centres on an environmental issue increasingly facing the natural gas industry. The EPA is critical of hydraulic fracturing, or fracking, techniques used to extract natural gas from tight geological formations in its Wyoming gas fields. The method involves blasting water, sand, and chemicals into wells in order to allow gas to escape. Fracking has made it possible for energy companies to access vast resources of oil and gas that were previously beyond reach.

Critics argue groundwater can be contaminated by the process, and the EPA on Dec. 8 said its research determined wells near Pavillion, Wyo., have been dirtied by drilling activity. The regulator drilled its own wells for the study. The problems, however, may have predated Encana’s ownership of the natural gas field, exist naturally, or were caused by the EPA’s own work, Encana says.

Encana discussed its concerns with the EPA prior to the report’s release, but the gas company’s perspective was not included, according to executives on the media call. Encana is no longer discussing the report with the EPA, and will instead further refute the report’s claims as part of the public comment process, the executives said.

The EPA is not backing down from its analysis. Catherine Milbourn, a spokesperson for the EPA, in an e-mail said the “EPA and its contractor used stringent standards for the installation and development of the two monitoring wells, practices that addressed the possibility of influencing sampling results.” The EPA also defended its decision to release its draft findings. “To ensure we have the best science in place, we released the draft analysis for public review and for review by independent scientists and experts before it is finalized.” The EPA is also planning a broader, national study on fracking and water.

Encana, North America’s second-largest natural gas company, has more leeway to speak out against the regulator because the battle is taking place south of the border, experts said.

“It is less unusual in the U.S. than it is in Canada to air your differences of opinion [publicly on] a very important issue for the industry,” said Dennis Mahony, head of Torys LLP’s environmental, health and safety practice. “It is more the culture in the U.S.”

Because the EPA chose to release its report on such a sensitive topic in such a high-profile way, Encana is wise to debate the regulator publicly, Mr. Mahony said. “From Encana’s perspective, this is a legitimate effort to balance the debate.”

Michal Moore, a professor of energy economics at The School of Public Policy at the University of Calgary, and also a visiting fellow at New York’s Cornell University, said now that the Republicans wield a great deal of power in Washington, the EPA is weak. Now is the time for its opponents to strike, he said.

“They [the EPA] don’t have a champion right now, and so people can yell at them right now because they can, and not worry about repercussions,” he said.

Source: The Globe and Mail

 

 

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Dec 12

 

While Offshore Oil and Gas Magazines article speaks mostly about the US shale gas potential, employment affects all countries – and those with shale gas could reap some major job benefits:

Shale gas development has already created a booming new industry in many areas of the country, but a new report suggests that the sector could add hundreds of thousands of jobs in the coming years, according to the Houston Business Journal.

The report, released by research firm IHS Global Insight, places the shale natural gas industry at around 600,000 workers throughout the U.S. last year. In the coming years, however, this number could grow by 45 percent, reaching 870,000 by 2015.

By 2035, the number of employees could actually swell to 1.6 million, and the direct tax contributions could reach $57 billion annually, according to Bloomberg. Between now and then, shale gas exploration and production could provide as much as $933 billion in tax revenue.

Meanwhile, the indirect benefits of the industry could prove even more substantial, with each high-paying gas development job leading to the creation of two to three other positions.

“Shale gas combines a capital-intensive industry with a broad domestic supply chain,” John Larson, a vice president at IHS, told Bloomberg. “We think that these jobs through 2015 are net new jobs because of high unemployment.”

Source: Offshore Oil and Gas Magazine

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Nov 28

 

Total is to appeal against the French government’s decision earlier this year to cancel its permit for the exploration of shale gas, company CEO Christophe de Margerie said at the weekend.

The government said in October it had decided to annul the three shale gas exploration permits it allocated in 2010 following a law enforced in July banning the use of hydraulic fracturing, or fracking, for shale gas and oil on French territory.

Total held a permit to explore a 4,327 sq km site around Montelimar, southern France. The two other shale gas permits were held by US company Scheupbach Energy.

The ban on fracking was a response to rising public and political opposition to shale drilling. It stipulated the permit holders had two months to declare which method of drilling they would use and their permits would be repealed if they indicated the fracking technique.

In October, Total CEO Christophe de Margerie said the company had declared to the government it would not use the fracking technique and at a forum in Lyon on Saturday, he said the company would appeal against the government’s decision.

Total was told by the government its plan was not believable and the company wanted further explanation, a company spokesman confirmed Monday.

According to French law, the French company has until December 12 to appeal and the company is considering two options.

One is to formally ask the energy and ecology ministries for a detailed explanation on why the permit was canceled.

The second option is to file a formal appeal to a French administrative Court.

Total had not planned to begin exploration drilling on the site until 2012 at the earliest.

Source: Platts.com

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Nov 16

 

The Secretary of Energy Advisory Board Subcommittee on Shale Gas Production has posted its second and final 90-day report about its 20 recommendations for improving the safety and environmental performance of shale gas development. The subcommittee met Nov. 14 to review the document and then send it to Energy Secretary Dr. Steven Chu.

The panel posted its initial report in August 2011. The follow-up report says federal agencies, state governments, industry, and public interest groups have planned or taken actions to reduce shale gas production’s environmental impact, such as the Interior Department’s plan to require disclosure of all chemicals in fracturing fluids used on federal lands and EPA’s proposed NESHAPs for oil and natural gas production, currently scheduled to be finalized by April 2012.

Energy companies are planning to collect and disclose air emissions data from shale gas production sites, according to the committee, which has recommended independent technical review of the methodology.

The report says as many as 100,000 more gas wells are likely to be drilled in the United States in the next several decades. “The development of shale gas is one of the biggest energy innovations, if not the biggest, in several decades,” said Subcommittee Chairman John Deutch, an MIT professor. “It is now about 30 percent of total U.S. natural gas production; it has reduced energy costs and created hundreds of thousands of jobs. But to ensure the full benefits to the American people, environmental issues need to be addressed now -– especially in terms of waste water, air quality, and community impact. We believe that our twenty recommendations provide the basis for a pragmatic route forward and hope that they will be acted upon.

“Industry, working with state and federal regulators and public interest groups, should increase their best field engineering practices and environmental control activities by adopting the objective of continuous improvement, validated by measurement and disclosure of key operating metrics,” he added. “This is the surest path forward to assure that shale gas is produced in an environmentally sound fashion, and in a way that meets the needs of public trust.”

Other members of the subcommittee are Stephen Holditch of Texas A&M; Fred Krupp of the Environmental Defense Fund; Kathleen McGinty of Weston Solutions; Susan Tierney of Analysis Group; Daniel Yergin of IHS-Cambridge Energy Research Associates; and Mark Zoback of Stanford University.

Source: Occupational Health and Safety

 

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Nov 11

 

Some interesting findings for shale gas critics.  Preliminary investigations from a study by the University of Texas Energy Institute suggests there is no link between the process used in shale gas extraction operations and groundwater contamination.

The study’s leader, Charles “Chip” Groat, a UT geology professor, noted that the dangers associated with shale gas drilling — which is accomplished by hydraulic fracturing, a process commonly known as fracking — are largely the same as other oil-drilling operations.

“Hydraulic fracturing doesn’t seem to be of concern to groundwater,” Groat said. “If there has been water contaminated related to shale gas development let’s not look at fracturing, let’s look at surface processes.”

Read the full article: Statesman.com

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