From No Hot Air Today

(c) 2009 F. Bruce Abel

No Hot Air is always good, but wonkish:


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Can Shale Gas transform UK energy policy?
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Australian gas
Poland, Russia, and us, continued
Shale gas could transform energy geopolitics
Which Russia to believe?
Waiting for the ice age.
Shale in the media
Gas as the new UK baseload!!
Gas v Coal
November Autopsy
Bears and reality mug the gas bulls 55%
Recent Posts
Australian gas
Poland, Russia, and us, continued
Shale gas could transform energy geopolitics
Which Russia to believe?
Waiting for the ice age.
Shale in the media
Gas as the new UK baseload!!
Gas v Coal
November Autopsy
Bears and reality mug the gas bulls 55%
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Dec 09, 2009
Australian gas
The Lucky Country seems particularly blessed with natural gas. It has traditional supplies from the Hobart Strait, but the big news recently has been the massive Gorgon field off Northern Western Australia, much of which already earmarked for China, India and Japan. Add to the the world's first Coal Bed Methane to LNG project in Queensland and the shale potential of the Northern Territories Beetaloo Basin as we pointed out in September. How much gas can one country (and several others) need?
It looks like they are getting more:
Energy explorer Beach Petroleum has signed an agreement with a Canadian company to investigate shale gas potential in South Australia's Cooper Basin.
SA Mining Minister Paul Holloway says the agreement gives hope for what may had seen as a declining region in South Australia."Suddenly we're talking about not just an extended life but a whole new range of opportunities opening up for the Cooper Basin," he said.Beach managing director Reg Nelson says a test well will be drilled in the first half of next year."I think we're looking at a gas supply that can go 50, 100 years or more," he said.
This sounds to us more of using shale to extend existing fields as originally in the Barnett and as we saw over the summer the extension of the Groningen gas field in the Netherlands. Groningen was thought to be declining even less than a year ago, but Exxon Mobil say the field can be productive until at 2060.
So where on earth are they are going to send this gas next. There is only so much gas Asia will take. But the answer lies closer to home, where gas comes up against coal in one of the world's largest coal producers:
The nation's third largest natural gas producer Santos Ltd says demand for the energy source could triple in eastern Australia over the next 10 years.Santos vice-president for eastern Australia Mark Macfarlane told an investor presentation on Wednesday that gas demand in the eastern states was currently about 600 petajoules a year and that the number of domestic and industrial customers was rising.He also told the Sydney presentation that gas was likely to be increasingly used as a cleaner feedstock than natural coal in power stations.
We guess that substituting natural gas for coal will free up all those exports to be sent to the UK for our Completely Crackpot Scheme of Carbon Capture and Storage!
Posted at 11:15 AM in LNG, Shale Gas Permalink Comments (0) TrackBack (0)
Poland, Russia, and us, continued
This is a follow up to a post from June 29, and an update to what we think is going to be the big story in European shale gas, Poland. We've talked at length about Polish shale, via activity of ConocoPhillips, BNK and Marathon. Now confirmation that Polish politicians are waking up to the implications. Can they please tell other European politicians the news?
Dec. 9 (Bloomberg) -- ConocoPhillips and Marathon Oil Corp. are betting that Poland, which gets half of its natural gas from Russia, can yield a development boom in shale formations like those that drove a jump in U.S. output of the heating fuel.The third- and fourth-biggest U.S. oil companies obtained exploration licenses this year covering hundreds of thousands of acres in Poland. The country, which imports 72 percent of its gas, could become an exporter of the fuel, said Maciej Wozniak, chief adviser on energy security to Prime Minister Donald Tusk.“Everything leads to a conclusion that in four or five years, and this is how much time we have to prepare for this, Poland will become a place with quite a lot of gas,” Wozniak said in a telephone interview.
If shale changes the game anywhere in Europe, Poland is the place.
“Increasing natural-gas production in Poland, especially in such a sustainable way, is very important for us,” Wozniak said. “Given our situation and the problems we had over the last years with securing stable supply on the gas market in the country, this initiative is particularly valuable.”
We are of course still in the if stage in Poland. But perhaps we should investigate Polish shale a bit more before being forced into paying for CCS in UK energy bills?
If the 430 million-year-old Silurian shale that stretches through Poland proves to be “an economic resource,” 48 trillion cubic feet (1.4 trillion cubic meters) of gas could be recovered over decades, according to Rhodri Thomas, a project adviser at Wood Mackenzie Ltd. in Edinburgh. That much gas would sell for more than $240 billion at current futures prices.
Just to give an idea, the UK uses 2.5 trillion cubic feet per year.
Posted at 09:10 AM in Current Affairs, Prices and Politics, Shale Gas Permalink Comments (0) TrackBack (0)
Shale gas could transform energy geopolitics
So says the Atlantic Council a US think tank. Despite looking like the kind of place where Dick Cheney may be hanging out in exile, they make good points that UK policy makers outside of energy should start considering. It's getting obvious that energy politicians in the UK are so (still!) utterly convinced (or have a vested interest?) of a gas shortage, that perhaps it's time to change tack and have word in the ear of those who realise that policies have to fit facts, not cater to outdated concepts. This would be a good place for any present or future UK policy makers in Treasury or Foreign Office for example. After all, these are type of guys who sold the fiasco of Iraq. They should find something that makes sense like shale easy.
Lost amidst the doom and gloom over global warming and energy dependence on the Middle East and Russia is the fact that new technologies and drilling techniques are allowing recovery of gas trapped in shale and gradually but inexorably transforming the global energy security equation.
The good news is that the price of liquefied natural gas (LNG) has dropped by roughly half, and US gas imports have dropped precipitously as these technologies have been deployed over the past two years or so. Now Europe is beginning to focus on its own shale deposits to reduce Russia’s hold on Europe’s gas market. And not least, as gas is the cleanest of fossil fuels, producing about 40% of the GHG of coal, it could provide some benefit in the effort to mitigate climate change.
I'm quoting at length from this for two reasons. Firstly, it's been frustrating at No Hot Air, that although plagiarism is the sincerest form of flattery that there has been quite a bit on shale's implications in even some of the world's most respected publications, mentioning no names but one in English and one in French, that seem to depend on what we've posted here without having the courtesy to link to us. That means apart from anything else, that we haven't seen anything new.
What is original here, apart from some interesting figures from the US EIA that we were unaware of, is the speculation includes the political implications of shale:
The prospective geopolitical implications are also intriguing. Widespread shale gas production holds the possibility of reducing Russian control over Europe’s supply. Europe itself has modest shale gas potential, and regulatory and legal questions further cloud its potential for shale gas production. But if shale gas becomes a larger factor in world gas markets, Europe could find access to relatively cheaper LNG supplies outside of Russia from Qatar, offshore Africa, and elsewhere. What impact such an eventuality might have on EU-Russia relations makes for interesting speculation.
Moreover Russia and Iran, which combined possess more than 40% of current proven gas reserves, may find that shale gas make it less attractive for foreign investors, whose technology can be critical, to develop those reserves. Iran, in particular has proven a vexing and problematic place to invest (quite apart from the political risk factor), especially so in its energy sector. If both petro-states have less gas revenue to bankroll their respective foreign policies, their efforts to expand in influence in the former Soviet space in the case of Russia, and the Middle East/Central Asia in the case of Iran, that would likely impact geopolitics on both areas.
All this is, of course, is for now, in the realm of speculation. But there is a loud buzz about shale gas being a game-changer among energy analysts that is difficult to ignore. In any case, shale gas has already injected great uncertainty into the future of gas markets and changed the US gas picture. Whether it rises to the level of being a game-changer is a judgment that will remain premature, probably until well into the coming decade.We hope, and we will point out to the UK policy makers in particular Energy Minister Malcolm Wicks and National Grid's Nick Winser that outdated assumptions need to be updated.
Posted at 08:50 AM in Current Affairs, LNG, Next Big Things, Prices and Politics, Shale Gas Permalink Comments (0) TrackBack (0)
Dec 08, 2009
Which Russia to believe?
Two stories today showing two opinions from one country. This shows the still prevalent UK view of Russia as threat to energy security needs to be a little more nuanced.
First off, the usual story, from Gazprom in the Moscow Times. They would say this wouldn't they?
A Gazprom spokesman on Monday dismissed concerns that a growth in the production of shale gas would pose a threat to the company’s foreign sales, voicing the gas giant’s first comment on the prospect.After gas prices surged last year and early this year, many European gas companies have begun studying the U.S. technology for producing shale gas, which may be a cheaper source of fuel.“The speculations that shale gas is cheaper than the Russian gas are not true,” Gazprom spokesman Sergei Kupriyanov said in an interview with Russia Today television.
Recenty we have been hearing that Gazprom is seen by some Russian sources as not maximising their potential with European end-users. Which make the statement by Russian oil major Lukoil interesting:
OAO Lukoil ut its 10-year output targets as Russia’s biggest non-state crude producer postponed some natural-gas projects on a decrease in European fuel demand and unconventional gas developments in the U.S.“It looks like our country will face serious problems with gas exports as early as the next decade,” Deputy Chief Executive Officer Leonid Fedun said in Moscow today.
And does this sound like the looming Russian Gas Crisis Alistair Buchanan and Malcolm Wicks fear, where a lack of investment in Russian gas threatens the UK's gas needs?
Lukoil postponed some of its gas projects as demand slipped and the U.S. made “dynamic” developments in shale gas, Fedun said. Some existing projects boast cheaper costs than liquefied natural gas and unconventional gas projects and would provide free cash flow of over $6 billion through 2019, Fedun said. Lukoil’s largest natural gas projects are in Siberia, the Caspian Sea region and Uzbekistan in Central Asia.
Posted at 11:00 PM in Current Affairs, Shale Gas Permalink Comments (0) TrackBack (0)