US EPA chief concerned about gas drilling fluids
Jon Hurdle and Timothy Gardner, Reuters
The top U.S. environmental regulator said she was "very concerned" about fluids blamed by some for polluting water supplies near sites where drillers use them to extract natural gas from shale deposits.
U.S. Environmental Protection Agency chief Lisa Jackson said she hopes her agency will launch a study this year into the nature of fluids used in the hydraulic fracturing process of natural gas drilling.
"We are going to look at what the fluids are, what's in them. We are very concerned about that," she told Reuters after a speech at the National Press Club.
Exploitation of the cleaner-burning fuel could allow the United States to reduce greenhouse gas emissions and cut its dependence on coal and petroleum imports. When burned, natural gas emits only half of the carbon dioxide per unit as does coal, which generates about half of the electricity in the United States.
Critics, however, say the chemicals used in fracturing can contaminate water supplies...
(08 March 2010)
Europe the new frontier in shale gas rush
Carola Hoyos, Financial Times
All across Europe big oil companies are scouring millions of acres of countryside and buying up rights to tap the natural gas trapped in prehistoric shale beds thousands of metres below its surface.
The shale gas rush has made its way over from the US, where breakthroughs in technology have allowed companies to extract gas from reservoirs previously seen as untouchable.
The newly accessible US shale deposits are so big that executives now believe the country has enough gas to last it for a century. This extra supply and the US’s new found self-sufficiency has created a worldwide gas glut that has driven down prices.
It is a remarkable turnround. Just three years ago, most US energy executives were working out how the US could import enough gas from places as far away as Nigeria, Russia and Qatar, while competing with the demands from China and other energy-hungry developing countries.
Now the world’s biggest, richest and most sophisticated energy companies believe that they may be able to repeat the American shale gas revolution in Europe, potentially undermining the power of Russia, the region’s biggest gas supplier.
For companies such as ExxonMobil, Royal Dutch Shell and BP, tapping Europe’s shale gas deposits is a way to catch up with what they missed out on in the US...
(07 March 2010)
The true cost of shale gas production
John Dizard, Financial Times
I try not to get into arguments over other people’s religious convictions. Even if you win your point, you make an enemy. That’s been a conventional understanding since the Thirty Years War. Sometimes, though, you have to clear your throat and carefully offer a heretical thought, if lives or large amounts of property are at risk.
For example, I think it might not be a bad idea to examine the faith-based assumption that the US has a virtually unlimited supply of natural gas from shale formations that can be extracted at a low price for the indefinite future. Perhaps the few people who think shale gas will be produced at a higher cost, and more slowly, than generally believed should be heard out, rather than be executed or sentenced to work in the salt mines. If you disagree, I will quickly withdraw that comment.
The shale gas religion crosses the usual political boundaries. The environmentalist wing believes that shale gas can displace dirty coal-fired generation. Liberals believe it will help power the clean energy policy. National security conservatives believe shale gas can end dependence on Middle Eastern or Venezuelan oil. Economic conservatives believe it can close the current account deficit and drive an economic recovery, at least until even more nuclear power can come on line...
(07 March 2010)
The Natural Gas Shopping Spree Quickens
James Herron, The Wall Street Journal
There’s one thing that major oil companies can’t get enough of these days–unconventional gas.
Virtually every deal that big oil has cut in recent months focused on resources of this type. ExxonMobil agreed in December to pay around $30 billion for XTO Energy, which specializes in extracting gas trapped in shale rock in the U.S. France’s Total agreed in January to acquire a quarter of Chesapeake Energy’s huge shale gas resource in Texas for $2.25 billion. Last week, BP cut a much smaller deal with Lewis Energy for half of its Texas shale territory.
In the latest deal, announced yesterday, Royal Dutch Shell and Petrochina have jointly offered A$3.26 billion for Arrow Energy, a producer of natural gas from coal seams in Australia.
There are several good reasons for this to be happening.
A big increase in unconventional gas production is likely to be a “game-changer”, according to BP Chief Executive Tony Hayward. The U.S. shale gas boom has already dramatically altered the energy supply picture for North America, cutting the need for domestic gas imports, driving a surplus of sea borne liquefied natural gas cargoes to Europe and weakening the dominance of Europe’s largest gas supplier, Russia’s Gazprom. The major oil companies don’t want to be sitting on the sidelines as this dramatic change sweeps through energy markets creating new opportunities...
(09 March 2010)