No Hot Air

(c) 2009 F. Bruce Abel

No Hot Air Today:



Dec 15, 2009
XOM and XTO follow up
The morning after on what we now learn is the largest Exxon Mobil acquisition since Mobil.
But this isn't just about them: This is about shale gas. As Bloomberg says via Business Week
Exxon Deal May Be Green Light for ShaleOthers may have to follow its $30 billion purchase of XTO, a company that specializes in fracturing rock with water and sand to make natural gas flow
If you didn't know about shale already, you do know. Those who have doubts may find themselves even more isolated than before. Exxon's takeover of XTO is a sign that shale gas has arrived.
Similarly, newspapers around the world suddenly find themselves having to do some research to explain to their readers what shale gas is, one reason why the NHO webstats went crazy yesterday.
But even the pros at somewhere like Petroleum Economist didn't see this one coming:
ExxonMobil tends to act slowly, but decisively, and this week's purchase of XTO Energy will send tremors through the oil and gas world. The move could trigger further consolidation among the leading shale-gas players in the US, or draw in other majors
Who gets bought next is only a short term issue for some gas companies. What's important here is that December 14 was the day shale gas came of age.
Posted at 06:08 PM in Current Affairs, Energy Prices, Next Big Things, Shale Gas Permalink Comments (1) TrackBack (0)
Dec 14, 2009
Exxon and XTO and shale
Exxon announced a buyout of XTO today, and Exxon's wish to access more shale technology was a big part of that.
In one of the largest deals of the year, Exxon Mobil is acquiring XTO Energy Inc., a large supplier of natural gas, for $31 billion of stock. The deal represents Exxon’s strategy to diversify way from oil and into natural gas, which is considered a cleaner fuel. The deal could presage other acquisitions by big energy companies of U.S. natural gas suppliers.
“XTO is a leading U.S. unconventional natural gas producer, with anoutstanding resource base, strong technical expertise and highly skilledemployees. XTO’s strengths, together with ExxonMobil’s advanced R&D andoperational capabilities, global scale and financial capacity, should enabledevelopment of additional supplies of unconventional oil and gas resources,benefiting consumers both here in the United States and around the world.
We've been waiting a while for the oil majors to take advantage of low gas prices to buy into the shale secret sauce that they missed the boat on first time around, although judging by Exxon, Chevron and ConocoPhllips interest in European shale in Germany and Poland, they aren't repeating the mistake. Will this mean another round of M+A activity? Probably
Posted at 02:28 PM in Current Affairs, Next Big Things, Shale Gas Permalink Comments (0) TrackBack (0)
Natural gas falls out of the sky
The Clean Skies Foundation presentation at Copenhagen available here is worrying and significant where Senator Tim Wirth says how European natural gas leaders didn't "know what we were talking about". And we thought it was just us.
Wirth said that shale gas was a game changer that fell out of the sky. Hopefully, natural gas is starting to bubble up the agenda, especially as neither CCS or large scale nuclear will be available for decades whereas gas is here today.
In his remarks at the forum, U.S. Senator Timothy Wirth noted, “Now that economically accessible reserves in the U.S. have grown by more than 60 percent, it is important to rethink the role of natural gas in climate and energy policy. The dramatic new discoveries and reserves are almost a gift, giving us a chance to develop a faster and smoother transition toward a low-carbon economy.”The premise that brought forum organizers together is that the expanded availability of natural gas makes it possible to accelerate the decarbonization of energy supplies by substituting natural gas for coal and to a lesser extent oil. In addition, a new generation of flexible, efficient gas-fired generators will facilitate the introduction of larger shares of wind and solar power into the world’s power grids
One of the sponsors, World Watch Institute noted that we have to come up with viable solutions very soon, and natural gas can provide that. Chesapeake CEO Aubrey McLendon was key speaker, as one would expect from one of the leaders in shale:
“Compared with coal, natural gas allows a 50-70 percent reduction in greenhouse gas emissions,” said Christopher Flavin, President of the Worldwatch Institute. “It’s a good complement to the wind and solar generators that will be the backbones of a low-carbon electricity system.” Aubrey K. McClendon, Chairman of ACSF and Chesapeake Energy, the largest explorer of natural gas in the U.S., and Vello Kuuskraa, President of Advanced Resources International, discussed the abundance of natural gas in the U.S. and other parts of the world.
“There really has never been much debate about whether natural gas is a good fuel – its carbon light molecular structure guarantees that,” commented McClendon. “The issue has always been whether there has been enough of it to begin moving our electric generation system in the United States as well as other parts of the world away from carbon-heavy coal and oil. The major natural gas shale plays in the U.S. have made it clear we have enormous reserves of natural gas to successfully address our economic, environmental and energy issues now.”
It will be interesting to see if they were speaking to the converted, or were able to raise some questions, and some doubts among European regulators especially over CCS. The Chesapeake Presentation was titled "America's, and soon the world's clean energy answer to Climate Change".