Shale Gas May Be the Ticket

[Graeme]

Shale Gas May Be the Ticket to Much Coveted Energy Independence for U.S., Says PIRA Energy Group Study

NYC-based PIRA Energy Group, an international energy consulting firm specializing in global energy market analysis and intelligence, announced the forthcoming release of a study on U.S. energy independence and the shale revolution.

Entitled "The Road to U.S. Energy Independence: The Shale Revolution (News - Alert) and Its Implications for North America's Energy Markets," the study examines the nation’s energy policy that are arising from increasing oil and gas production and falling imports.

Over the past few years, improvements in technology have allowed the USA to discover and develop abundant supplies of natural shale gas across the United States and Canada.

Under this backdrop, the study also examines the complex implications for North American pricing parity, crude and product flows and refining behavior.

The preliminary findings of the study lead us to suggest that the current hype surrounding bio-fuel production will eventually die down and the U.S. will steadily emerge as the world’s next energy leader.

tmcnet

[pstarr]

So. First the precipitous decline rates of existing tight-shale NG plays most be overcome with ever-increasing new-well drilling and associated costs. Once that is accomplished then the tight NG well heads will be tied into current NG collection pipeline systems, also at a great cost. Then fischer-tropf factories will be built, to convert the NG in liquid petroleum. Or we might convert existing cars and gas stations to use NG. sure.

But according to the article this is all great, as it will replace the current hype of ethanol (and 3rd and 4th gen cellulosic/algae) biofuels with a brand new hype--NG mitigation of liquid petroleum decline. wow.

[seenmostofit]

So. First the precipitous decline rates of existing tight-shale NG plays most be overcome with ever-increasing new-well drilling and associated costs.

This one has already been completed.

Once that is accomplished then the tight NG well heads will be tied into current NG collection pipeline systems, also at a great cost.

Also already completed.

Then fischer-tropf factories will be built, to convert the NG in liquid petroleum. Or we might convert existing cars and gas stations to use NG. sure.

Buy one at your local Honda dealer. Already completed.

http://automobiles.honda.com/civic-natural-gas/

But according to the article this is all great, as it will replace the current hype of ethanol (and 3rd and 4th gen cellulosic/algae) biofuels with a brand new hype--NG mitigation of liquid petroleum decline. wow.

I agree with you that the article is incorrect in its conclusions. Shale gas is not the answer, obviously, even though it is a proven resource which can be developed into substantial production over the next few years/decades.

The answer, based on its sheer size, are actually methane hydrates. But shale gas can be a nice bridge fuel for a few decades while the kinks in methane hydrates are worked out.

[ralfy]

Max. of 6 mb/d for NA oil and gas resources for the next two decades, and a very optimistic forecast of 20 pct increase in total global production for all oil and gas resources. But we may need an increase of 2 mb/d a year just to maintain economic growth, or around a 40 pct increase in oil and gas production for the next two decades.

[pstarr]

The question remains how to pay for $8/tcf drilling costs with $2/tcf ng? As for that Honda? NG conversions are not new, cost practically nothing for the company to claim innovation and emissions control. PR. Nothing but Public Relations.

[seenmostofit]

The question remains how to pay for $8/tcf drilling costs with $2/tcf ng?

I will refinance my home, empty my piggy bag and deliver to your doorstep as many dollars as you desire, should you have the ability to drill a tcf of gas for $8, or wish to sell me a tcf of ng for $2. PM me for the quantity you have available and I will show up anywhere in the world with the money and the contracts.

As for that Honda? NG conversions are not new, cost practically nothing for the company to claim innovation and emissions control. PR. Nothing but Public Relations.

Honda conversions are not conversions, exist and can be purchased by you and I and therefore are not just public relations, and I built my first NG conversion on a Briggs and Stratton engine back in the late 80's. Finicky, but does prove the point that this technology is not new, and can easily be accomplished by pimply post teen types with a desire to fiddle around with motors. Fortunately, we have plenty of natural gas and this type of old, easy to implement technology can take advantage of our near incomprehensible sized natural gas resource base.

[Pops]

Well, obviously we aren't going to switch anytime soon.



Hereis a report that gushes ng vehicle sales will increase by one million to 3 million per year by '16, so with 250 million passenger vehicles in the US...

NG is great for replacing coal to generate electricity and is a little but I think the managers there aren't quite convinced it's the plumb from the Energy Fairy's bum as the PR Fluffers and Chesapeake pushers would like us to believe. In fact the number of rigs drilling for gas has dropped by 50% YoY to a 15 year low. Considering decline rates upwards of 70% the first 12 months for a fracked well, it would be a mistake (in my completely uneducated opinion) to base huge refitting costs on a commodity that doesn't seems to have proven it's reliability.

But aside from that, the "independence" will be short lived because just like with the oil "glut" NG will be exported just as soon as possible to people who will be able to pay.

[pstarr]

I built my first NG conversion on a Briggs and Stratton engine back in the late 80's. Finicky, but does prove the point that this technology is not new, and can easily be accomplished by pimply post teen types.

NG conversions are not only for pimply teens types, but it helps. Still have the zits?

shriner scooter by Casa Highland, on Flickr

[Graeme]

Reports: Natural gas reserves larger than expected

There's been plenty of debate over the Marcellus Shale natural gas field, but new research adds a twist that could impact political and environmental battles. Two independent financial firms say the Marcellus isn't just the biggest natural gas field in the country — it's the cheapest place for energy companies to drill.

One of the reports adds that the Marcellus reserves that lie below parts of Pennsylvania, West Virginia, Ohio and New York are far larger than recent government estimates, while another said the powerful combination of resource, cost and location is altering natural gas prices and market trends across the nation.

The Marcellus could contain "almost half of the current proven natural gas reserves in the U.S," a report from Standard & Poor's issued this week said.

Another recent report from ITG Investment Research, a worldwide financial firm based in New York, found that a detailed analysis of Marcellus well production data suggested that federal government estimates of its reserves "are grossly understated,"


Earlier this year, the federal Energy Information Administration sharply lowered its estimates of Marcellus reserves, from 410 trillion cubic feet down to 141 trillion cubic feet. That adjustment was widely reported, including by The Associated Press.

But that lowered estimate doesn't correspond with actual well production, said Nikhanj. He said their analysis shows that the Marcellus contains about 330 trillion cubic feet of gas, more than double the size of the next largest field in the nation, the Eagle Ford in south Texas.

kval

[Lore]

We're beginning the desperate running from pillar-to-post here, looking for the next big energy fix. That in itself should be a warning sign. We've got energy companies fracking, deep water drilling and now they're hawking for federal land reserves. So, the new pretend game is NG is going to pull our fat out of the fire when the very same guys running the energy monopoly are declaring that it's really best suited for use in electrical generation and heating. Fact is, there is no big push on to build more CNG vehicles, LNG plants, or pipe the country for NG. Leastways not until big oil has extracted maximum amount of dollars. They cannot afford to be undercut.

[Keith_McClary]

So. First the precipitous decline rates of existing tight-shale NG plays most be overcome with ever-increasing new-well drilling and associated costs.

This one has already been completed.

Wont it have to be ever-increasingy re-completed?

Once that is accomplished then the tight NG well heads will be tied into current NG collection pipeline systems, also at a great cost.

Also already completed.

Ditto. The "low hanging fruit" profit-wise is near current NG collection pipeline systems. When you have to lay collection pipe to the large areas of less productive shales around the margins, the economics may not look so good.