Posts Tagged ‘fracking’

Why Russia finances anti-fracking protests in Europe

January 13, 2018

The logic is rather simple.

  1. Russia has very large natural gas reserves.
  2. Russia has even larger shale reserves but these have, deliberately, not been developed yet.
  3. Russia has a very large investment in the transport of natural gas to Europe.
  4. Gazprom policy is to maximise returns on natural gas before developing shale reserves.
  5. The return to Gazprom is maximised if Europe does not develop its own shale reserves and instead increases its dependence on Russian gas.

It is not at all surprising then that the anti-fracking movement in Europe is both funded and covertly directed by Russia. The biggest success for the Russian campaign was in 2014 when many European countries succumbed to the Russian-backed, “environmental” lobbies and banned fracking. And Gazprom’s exports to Europe continue to increase steadily. Since 2014 annual exports have grown from about 145 to 190 billion cubic meters.

National ReviewIn 2014, after multiple European countries banned fracking following protests, NATO secretary general Fogh Anders Rasmussen warned that “Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organizations — environmental organizations working against shale gas — to maintain dependence on imported Russian gas.” 

In 2015 alone, the intelligence community found that RT, Russia’s state-run media outlet, produced over 60 anti-fracking stories. “There are a lot of studies that say fracking is dangerous,” one RT segment began, “So why do you think some countries and companies think it’s worth the risk?” RT conveniently left out the fact that over 60 percent of Russian exports are oil and natural gas, and that countries that “risk” fracking would no longer be dependent on the Kremlin. In addition to peddling anti-fracking propaganda in the U.S., Russia is allegedly using an offshore shell company to directly fund American environmental groups. On June 29, Republican representatives Lamar Smith and Randy Weber wrote a letter to U.S. Treasury Secretary Steve Mnuchin demanding an investigation into the shell company:

According to the reports, entities connected to the Russian government are using a shell company registered in Bermuda, Klein Ltd. (Klein), to funnel tens of millions of dollars to a U.S.-based 501(c)(3) private foundation, the Sea Change Foundation (Sea Change). This money appears to move in the form of anonymous donations. Sea Change then passes the money originating in Russia to various U.S. 501(c)(3) organizations such as the Sierra Club, League of Conservation Voters Education Fund, and others. These funds are dispersed as grants that will be used to execute a political agenda driven by Russian entities. The purpose of this circuitous exchange of foreign funds is to shield the source of the money.

Before it was revealed publicly, members of the Sierra Club, et al., were likely clueless that Putin and the Russians had been funding their anti-fracking initiatives. 

Russian gas exports to Europe are at record levels.

Bloomberg: 

Russia is working to keep natural gas exports to Europe near record levels in 2018 after the continent’s biggest supplier, Gazprom said its deliveries this year signal it is achieving on its ambitions to expand. The state-controlled gas giant plans to ship a minimum of 180 billion cubic meters next year, Deputy Chief Executive Officer Alexander Medvedev said in an interview in St. Petersburg. That volume would be the second highest ever after at least 190 billion cubic meters expected this year, which is a record. 

Gazprom meets more than a third of Europe’s demand for natural gas, Russia’s biggest and most lucrative market worth some $37 billion in revenue this year. Tighter trade links with the Kremlin-backed company contrast with increasing tensions on the military and political front.

source Gazprom


 

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Saudi Arabia seeks bank loans for first time in a decade

March 9, 2016

I am still of the opinion that the oil price war that Saudi Arabia has been waging against shale oil, Russia and Iran, was misguided and due primarily to a geopolitical machismo that was grossly overestimated. It was misguided because shale fracking is not a technology that is going to go away. In the short term some of the more expensive shale wells may close, but they can very soon start up again. But more importantly, shale gas and oil are available all over the world. They just haven’t been developed yet. And those that don’t have access to shale – like Japan – will have access to gas from methane hydrates within a decade. And there is more gas available from methane hydrate than from shale which, in turn, is more gas than all the natural gas resources known.

In the long run I expect the Saudis to be the losers. Their budget deficit climbed to approach $100 billion last year and now, for the first time in a decade, they are looking to borrow.

Reuters: 

Saudi Arabia is seeking a bank loan of between $6 billion and $8 billion, sources familiar with the matter told Reuters, in what would be the first significant foreign borrowing by the kingdom’s government for over a decade.

Riyadh has asked lenders to submit proposals to extend it a five-year U.S. dollar loan of that size, with an option to increase it, the sources said, to help plug a record budget deficit caused by low oil prices.

The sources declined to be named because the matter is not public. …

The kingdom’s budget deficit reached nearly $100 billion last year. The government is currently bridging the gap by drawing down its massive store of foreign assets and issuing domestic bonds. But the assets will only last a few more years at their current rate of decline, while the bond issues have started to strain liquidity in the banking system. …….. 

…… Analysts say sovereign borrowing by the six wealthy Gulf Arab oil exporters could total $20 billion or more in 2016 – a big shift from years past, when the region had a surfeit of funds and was lending to the rest of the world.

All of the six states have either launched borrowing programs in response to low oil prices or are laying plans to do so. With money becoming scarcer at home, Gulf companies are also expected to borrow more from abroad.

In mid-February, Standard & Poor’s cut Saudi Arabia’s long-term sovereign credit rating by two notches to A-minus. The world’s other two major rating agencies still have much higher assessments of Riyadh, but last week Moody’s Investors Service put Saudi Arabia on review for a possible downgrade. ……. 

The pricing of the loan is likely to be benchmarked against international loans taken out by the governments of Qatar and Oman in the last few months, according to bankers. Because of banks’ concern about the Gulf region’s ability to cope with an era of cheap oil, those two loans took considerable time to arrange and the pricing was raised during that period.

Oman’s $1 billion loan was ultimately priced at 120 basis points over the London interbank offered rate (Libor), while Qatar’s $5.5 billion loan was priced at 110 bps over, with both concluded in January.


 

Oil price destroys viability of Scottish independence

August 24, 2015

The Scottish National Party (SNP) once had budgeted on the basis of oil price being $115/ barrel. Then at the time of the referendum they assumed a price of not less than $100/barrel giving a tax revenue of not less than £7 billion per year which would offset the “subsidy” that Scotland gets from the rest of the UK of about £9 billion per year. This tax revenue drops to zero with a North Sea oil price of less than $50/ barrel.  But the breakeven price for oil producers is even higher:

Forbes (Jan 2015)Some prospects, including almost all activity West of Shetlands, are considered unprofitable below $100 per barrel. Mature oil wells struggle to be viable below $60, so BP has decided that 200 jobs and 100 contractors’ roles would go following a review of its North Sea operations managed out of Aberdeen, Europe’s oil and gas capital. Looking ahead, BP forecasts the oil price to remain in the $50 to $60 price range for next three years. ………

Either way, BP’s take has darkened the mood in the British and Norwegian sectors of the North Sea. However, it isn’t the first to announce job cuts. If anything, BP’s move is pretty predictable given the company has been quite clear about reducing employee headcount.

Shell, Statoil and Chevron have made similar announcements while ConocoPhillips has also been clear about a need to “streamline operations.” As operators downsize, oilfield services companies would invariably feel the pinch from independent upstarts to market leader Schlumberger.

But reality is biting hard. It is now more likely that Brent oil price will be trapped between $30 and $40 for the next 2 -3 years. Costs of production in the North Sea have not come down much compared to the sharp decline in US production costs of oil from fracking. And now Iranian oil will take its market share. At these prices the North Sea oil producers will be losing money on each barrel produced. Production is likely to be scaled down sharply and investment will drop to a trickle. Onshore jobs involved in both exploration and production (Norway, Holland, Scotland) must decrease. The Norwegian and Scottish production will bear the brunt of this turndown. Norway has built up a huge reserve fund and can weather a storm but not a permanent downturn, The UK economy can take the hit but an independent Scotland would be very hard hit. The introduction of shale fracking in England – which could take advantage of the the production cost reductions achieved in the US – could not only mitigate the risk but add a new source of jobs and tax revenue. The largest cost reductions in the production of oil from shale have come in the non-unionised part of the industry. There is considerable oil shale in Scotland as well, but I expect the SNP and the UK unions to be far too short-sighted and to do their damndest to prevent the introduction of fracking.

Nasdaq brent oil 10 year chart Aug 2015

Nasdaq brent oil 10 year chart Aug 2015

At less than $40/barrel, the SNP would need to create some very strange, fantasy budgets to prove the viability of an independent Scotland. Perhaps they could just nationalise everything and print money.

Drinking water contamination caused by weak water wells and not by fracking

September 16, 2014

It is fashionable for environmentalists to blame fracking for all manner of evils as a matter of faith. They have proclaimed that fracking causes earthquakes, water table contamination, emission of dangerous gases, damage to house price levels and even damage to crops. Such claims are usually based on no evidence whatsoever but presented as gospel.

A new paper published in PNAS reports on real experimental measurements (not just a computer model) using noble gases to trace methane leakage into drinking water in 130 water wells in Pennsylvania and Texas. They find that drinking water contamination was caused by weak walls and well construction faults and not by fracking.

TH Darrah et al, Noble gases identify the mechanisms of fugitive gas contamination in drinking-water wells overlying the Marcellus and Barnett Shales, 

Significance

Hydrocarbon production from unconventional sources is growing rapidly, accompanied by concerns about drinking-water contamination and other environmental risks. Using noble gas and hydrocarbon tracers, we distinguish natural sources of methane from anthropogenic contamination and evaluate the mechanisms that cause elevated hydrocarbon concentrations in drinking water near natural-gas wells. We document fugitive gases in eight clusters of domestic water wells overlying the Marcellus and Barnett Shales, including declining water quality through time over the Barnett. Gas geochemistry data implicate leaks through annulus cement (four cases), production casings (three cases), and underground well failure (one case) rather than gas migration induced by hydraulic fracturing deep underground. Determining the mechanisms of contamination will improve the safety and economics of shale-gas extraction.

A key source of groundwater contamination (labeled 5, center right) caused by faulty well casings. Credit: Image courtesy of Thomas Darrah, The Ohio State University

Press Release:

….  neither horizontal drilling nor hydraulic fracturing of shale deposits seems to have caused any of the natural gas contamination.

“There is no question that in many instances elevated levels of natural gas are naturally occurring, but in a subset of cases, there is also clear evidence that there were human causes for the contamination,” said study leader Thomas Darrah, assistant professor of earth sciences at Ohio State. “However our data suggests that where contamination occurs, it was caused by poor casing and cementing in the wells,” Darrah said.

In hydraulic fracturing, water is pumped underground to break up shale at a depth far below the water table, he explained. The long vertical pipes that carry the resulting gas upward are encircled in cement to keep the natural gas from leaking out along the well. The study suggests that natural gas that has leaked into aquifers is the result of failures in the cement used in the well.

Parsing Obama’s SOTU on climate matters: A paean to shale gas

January 29, 2014

Obama’s SOTU address will be spun in many different ways but I felt it was a remarkable paean to gas. Climate change is undeniable but he took care not to call it global warming. Not a lot of alarmism as he praised the effects of using gas. He avoided mentioning the words “fracking” or “shale”. It was all “natural” gas. He tried to give some credit to solar energy but only as an afterthought. Besides, his implication was that gas is not really a fossil fuel!

The entire section is just GAS! Gas! Gas! 

Extracts from Obama’s speech in blue. My comments in red.

“Now, one of the biggest factors in bringing more jobs back is our commitment to American energy.  The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.

Yes. Entirely due to fracking and shale gas and shale oil. The effect of renewables has been negligible.

One of the reasons why is natural gas – if extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change.  Businesses plan to invest almost $100 billion in new factories that use natural gas.  I’ll cut red tape to help states get those factories built, and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.  My administration will keep working with the industry to sustain production and job growth while strengthening protection of our air, our water, and our communities.  

A tribute to shale fracking – without saying so.

And while we’re at it, I’ll use my authority to protect more of our pristine federal lands for future generations.

Except if there is shale gas to be found.

It’s not just oil and natural gas production that’s booming; we’re becoming a global leader in solar, too.  Every four minutes, another American home or business goes solar; every panel pounded into place by a worker whose job can’t be outsourced. 

Really! Pounding a solar panel into place!!!!! And not one of those homes gives up its connection to the grid.

Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it, so that we can invest more in fuels of the future that do.

Like shale gas – which as we all know – cannot be called fossil energy.

And even as we’ve increased energy production, we’ve partnered with businesses, builders, and local communities to reduce the energy we consume.  When we rescued our automakers, for example, we worked with them to set higher fuel efficiency standards for our cars.  In the coming months, I’ll build on that success by setting new standards for our trucks, so we can keep driving down oil imports and what we pay at the pump.

And while he was speaking it was 17°F with light snow in Washington and fossil fuels were heating the city.

Taken together, our energy policy is creating jobs and leading to a cleaner, safer planet.  Over the past eight years, the United States has reduced our total carbon pollution more than any other nation on Earth. 

True and entirely due to the use of gas.

But we have to act with more urgency – because a changing climate is already harming western communities struggling with drought, and coastal cities dealing with floods. 

Forget that we had less storms in 2013 than ever before. And Califiornia’s drought is due to climate change. Schwarzenegger said so and he should know.

That’s why I directed my administration to work with states, utilities, and others to set new standards on the amount of carbon pollution our power plants are allowed to dump into the air. 

The EPA will be my palace police. And of course if we reduce carbon (dioxide) emissions all droughts and storms and ice melting will miraculously cease!!

The shift to a cleaner energy economy won’t happen overnight, and it will require tough choices along the way.  But the debate is settled.  Climate change is a fact. 

Oh my!. Climate change is settled – ( He never said it was global warming)!

And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.”

Meaningless rhetoric. Just how his children’s children will get to look him in the eye is a little unclear. When was the last time you looked into the eyes of a grandparent and blamed them or praised them for the state of the world?

EU opposition to shale fracking is crumbling

January 27, 2014

The cost of gas in Europe (from the North Sea or from Russia) is about 3 times higher than in the US (from natural gas onshore and offshore and from the fracking of shale). The high gas price in Germany has led to a return to coal in a big way. Yet Europe has substantial reserves of shale which could give both oil and gas. Gas and energy prices are leading to the EU now increasingly trailing the US in competivity. Jobs are being lost. And it is the instant, knee-jerk reactions of the Greens in Europe, who have set themselves against fracking, which has slowed the deployment of shale gas. This mindless opposition is unsustainable and is beginning to crumble.

The UK has already declared its intentions to now pursue fracking in a big way. Other countries will have no option but to follow suit. The moratoriums against fracking in a number of countries (France, Germany …) will have to be withdrawn. Even Russia – which has a vested interest in keeping the price of natural gas high – is beginning to move on fracking of their vast reserves.

Europe has to frack. But politicians need a “decent”, politically viable interval to make their inevitable U-turns and give up their unsustainable positions. Fracking is becoming politically acceptable if not yet politically correct.

OilPrice

EU Readies for Shale Gas Breakthrough

  • Ukrainian company Nadra Ukrayny, along with co-sponsor International Gas Union, hosts a summit May 20-22 to discuss maximizing the benefits of shale exploration in the European community. Organizers say the event will have a pan-European focus, with strategy sessions focused on the shale potential from Eastern Europe to Great Britain.
  • Polish shale ambitions, meanwhile, were stymied in part by a decision from Italian energy company Eni to pull out of the country, the third company to do so since 2012. Eni said the geology was too complex to exploit now, leaving behind an estimated 187 trillion cubic feet of shale gas reserves. That too should pique future interest once technology evolves. Chevron remains one of the few players still in the Polish shale.
  • Rainer Seele, chairman of German energy company Wintershall, told delegates at a Berlin energy conference it was time for an honest debate about shale exploration. Late last year, German leaders agreed to keep a moratorium in place on hydraulic fracturing. Several European states have expressed reservations about the controversial drilling practice dubbed fracking. For Seele, it’s time for “an informed debate and legal clarity” because now, he said, the conversation is at a standstill. In 2012, a report found there may be as much as 100 trillion cubic feet of technically recoverable gas locked on German shale.
  • Spain too entered the fray last week when the central government filed a challenge against a decision to ban fracking in Cantabria, a region near the coast of the Bay of Biscay.  Regional leaders voted unanimously to ban fracking out of environmental concerns last year, but with Spain importing more than 70 percent of its natural gas needs, the 70 years’ worth of gas in Cantabria is too rich to ignore.
  • France and Bulgaria are among other European states with fracking bans in place. Last week, the European Commission embraced a series of recommendations meant to ensure appropriate safeguards are in place for members that choose to go ahead with shale exploration. The EU said the recommendations were part of a policy framework meant to guide regional energy policy through 2030. EU Environment Commissioner Janez Potocnik said shale gas is “raising hopes” in Europe. With energy companies clamoring to get in line, Europe may be on the cusp of a shale breakthrough.

Greens are close to Trotskyites

January 21, 2014

I have always felt that the Green movement was penetrated and then effectively taken over by the extreme left who had no place to go after the fall of communism. This takeover by the extreme left – whether they were Maoists, Trotskyites or Leninists – coincides with when the Green movement moved from local environmental issues (where they did a great job) to large “global” issues – where they have been remarkably ineffective and terribly destructive. These global issues (climate, GM crops…) are ostensibly about large abstract (but non-existent)  threats but really concerned with furthering the communistic ideals of wealth redistribution.

Now Lord Deben (the former John Gummer) – who has not himself been above making money from “green” policies – labels the Greens openly as Trotskyites (though it may have more to do with the money he stands to make by promoting the fracking of shale). Gummer has been quite happy to be allied with the Trotskyites when it has suited him to promote renewable energy. But now it is not sustainable for Europe to perpetuate its lack of competitivity against the US with gas prices 3 times higher and electricity prices twice as high as in the US. And these high costs are almost entirely due to the misguided “green” policies in the EU (which have only succeeded in replacing nuclear power with coal). Fracking is inevitable and while Gummer is just ensuring his own future, it suits him to expose the undoubted extremism of the “Greens”.

The Guardian:

Lord Deben, who is chairman of the Committee on Climate Change, said those who condemn fracking as extremely damaging are taking a “nonsensical position” and called on environmentalists who take a more “sensible” view to disassociate themselves from these groups.

In an interview with the Guardian, the Conservative ex-cabinet minister, formerly known as John Gummer, argued that the best way of protecting the planet is broad agreement about practical solutions, including exploitation of Britain’s shale gas reserves. 

He said the fight against climate change will not be won if moderates allow their position to be associated with campaigners who have “extremist” views close to Trotskyism that are not really connected to the environment.

The chairman’s remarks are likely to prove controversial with groups that strongly oppose fracking, such as Greenpeace, Friends of the Earth, and the Green Party, whose MP Caroline Lucas was arrested during an anti-shale protest in Balcombe in August. They have raised worries about the carbon emissions and potential for water contamination, air pollution, flaring and visual impact on the landscape.

However, David Cameron and many other Conservatives have hailed the technology as a way of possibly bringing down bills and boosting growth, while insisting it will be properly regulated. The prime minister declared last week that he was “going all out for shale”.

Deben would not single out any particular green groups in the UK, but criticised what he called the “Christine Milne school of thought” in the environmental movement – a reference to the leader of the Australian green party, who is a senator for Tasmania.

Total to enter fracking in the UK

January 12, 2014

The shale boom (gas and oil) in the US has changed the energy landscape not only in the US but also in the export of cheap oil and now even coal from the US.

us petroleum production boom

us petroleum production boom

But so far only the US has seen significant production of gas and oil from shale. In Europe the Green lobby is desperately trying to stop the advent of fracking even though their misguided policies  have – so far – only led to an increased use of coal and an increased price of electricity to the consumer. But the UK, Poland and other countries have huge reserves of shale and the exploitation of these reserves is both necessary and inevitable. Russia, China, South America and India also have shale reserves which will – in time – be recovered. Russia is going slow with fracking because they have large amounts of natural gas to be sold first to recover the investment in their gas pipelines to Western Europe. China is forging steadily ahead and will soon produce shale gas in earnest. India has not even finished mapping its reserves. Both China and India have some technology transfer to be achieved. Japan is spending real development money to be able eventually to use under-sea methane hydrates since they have no shale.

Fox Business: Russia is estimated to have the largest shale oil reserves of 75 billion barrels, according to the Energy Information Administration. The U.S. is No. 2 with 58 billion barrels, followed at a distance by China, Argentina and Libya.

China is believed to have 1,115 trillion cubic feet of recoverable shale gas. The EIA estimates that Argentina has 802 trillion cubic feet, while the U.S. is fourth at 665 trillion. Algeria likely has the third-largest shale gas reserves.

While the U.S. energy industry has roared ahead, shale reserves overseas face several development hurdles such as a lack of drilling resources, land ownership issues and government regulations.

In Europe, the UK will probably lead the way – even though the “politically correct” opposition in Europe will continue to live in their dream worlds. The French oil majors – stopped in their own country by Francois Hollande – are moving in.

BBCFrench oil and gas company Total is to invest in the UK’s shale gas industry, it is to be announced on Monday. Total will be the first of the so-called “oil majors” to invest in shale gas in the UK, the BBC has confirmed. The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present in the north of England.

…. Total is to spend tens of millions of pounds buying substantial stakes in firms with drilling licences in the north of England, where other large energy firms such as Centrica and Gaz de France have already invested.

It comes as the government is expected to introduce more incentives to encourage local authorities to allow drilling for shale gas …… Under the measures, local authorities would keep all income from business rates paid by companies drilling for shale gas, instead of giving it to the UK treasury.

In December, a report commissioned by the Department of Energy and Climate Change (DECC), said more than half of the UK could be suitable for fracking.

In his analysis, Joe Lynam writes:

That Total is now getting involved in the UK shale gas industry is not insignificant. The oil majors (BP, Shell, Total, Exxon, and Chevron) waited in the wings for five years in the US while smaller exploration companies drilled for shale gas.

When it became clear there were major commercial flows in America, then the majors piled in. Now it looks like the majors are getting interested in Britain at a very early stage – thanks in no small part to the confident reserve estimates from the British Geological Survey and the open arms of the UK government. The large energy players bring deep pockets and serious expertise with them and will be able to extract, sell and distribute any found gas quicker than smaller companies.

The advantage for the consumer could also be mouth watering – US energy costs are now a third of those in Europe. If Britain can extract 10% of the estimated reserves it could supply the entire country for almost 50 years.

UK Shale Regions

UK Shale Regions

Related Posts.

Reality bites as EU politicians slowly back away from costly energy policy

May 7, 2013

Reuters reports that EU politicians are to meet at a summit to reassess energy policy in the post-fracking world  (and  – but this is not to be admitted under pain of being shunned – a post-global-warming reality). I just note that politicians will be the most adept at changing direction aand taking credit for moving away from global warming orthodoxy. Many scientists will find their own exit strategies but many will find it difficult to find the rationale to move away from what has become their religion and their livelihood. The least adept at embracing the new reality will the “climate bureaucrats” whose comfortable existence depends upon the global warming religion continuing in force. And all those who have milked the EU subsidy regime for all its worth will not be pleased but they will just move on to the next scam.

(Reuters) EU heads of state and government will seek ways to limit the impact of energy costs on European competitiveness at a summit this month, a draft document seen by Reuters showed.

European industry says it is disadvantaged because of the price it pays for energy compared with the United States, where the shale gas revolution has drastically lowered costs.

The document ahead of the May 22 EU summit, which has energy and taxation on the agenda, calls for examination of the impact of energy prices and costs and action to limit the effects.

One option is developing the European Union’s own shale gas resources, although this is not mentioned directly. Instead, the draft refers to safe and sustainable development of “indigenous sources of energy”.

Europe’s very different geography and land ownership would make it hard for the European Union to rival the United States in shale gas, but the executive European Commission is working on a framework to guide prospectors.

The leaders are expected to urge the Commission to analyze energy prices and costs in member states “with a particular focus on the EU’s competitiveness” against global rivals.

The draft also points to massive investment costs in boosting power generation and networks as likely to drive up energy prices.

Arguments over energy costs have featured prominently in political debate ahead of German elections and played a part in blocking a Commission proposal to boost carbon prices on the EU market.

The Emissions Trading Scheme (ETS), where carbon prices have sunk to record lows, is not on the draft agenda, but it could be debated on the sidelines of the summit, EU sources have said.

Efforts to repair that market are also a focus of attention for the European Parliament.

UK has enough shale gas for a millenium

February 9, 2013

Shale gas reserve estimates keep on increasing. We have the peculiar situation where Russia and some of the large oil companies attack shale gas only because some of their existing business may be threatened. But they all also have strong positions with shale gas. But what is clear is that “peak gas” has been postponed by several hundred years and there is no energy crisis in sight.

Peak Gas will never come

The Times has seen advance copies of the British Geological Survey’s new estimates of shale gas reserves in the UK:

Britain could have enough shale gas to heat every home for 1,500 years, according to new estimates that suggest reserves are 200 times greater than experts previously believed. The British Geological Survey is understood to have increased dramatically its official estimate of the amount of shale gas to between 1,300 trillion and 1,700 trillion cubic feet, dwarfing its previous estimate of 5.3 trillion cubic feet.

According to GWPF:

According to industry sources, the revised estimates will be published by the Government next month, fuelling hopes that new “fracking” techniques to capture trapped resources will result in cheaper energy bills.

It is thought that it will be technically possible to recover up to a fifth of this gas, making Britain’s shale rocks potentially as bountiful as those in the US. Experts stressed that it was still much too early to say how much of the gas it would be economic to get out of the ground to heat homes and help to generate electricity. 

In an interview with The Times today, Ed Davey, the Energy and Climate Change Secretary, tries to downplay hopes of a shale gas glut in the UK pushing down household heating bills, which are at record highs. “It is not the golden goose. The experts are clear that they do not expect this to have a major impact on the gas price.”

The UK Onshore Operators Group (UKOOG), which also represents other onshore oil and gas producers, is aiming to win over public opinion about the shale gas industry, in particular by countering claims that the process of fracking poses an environmental menace.

The shale gas industry is gearing up for a year of intense activity after the Government lifted an 18-month moratorium on fracking in December. The ban was imposed in May 2011 after Cuadrilla Resources, the explorer backed by Lord Browne of Madingley, the former chief executive of BP, set off dozens of earth tremors when it began fracking on sites near Blackpool. The company intends to resume fracking this summer to find out more about the size and commercial potential of its reserves.

Other explorers sitting on vast shale gas deposits will also apply for fracking licences soon. Government officials are preparing to hold an onshore oil and gas licensing round this year which could result in more parts of the UK being opened up for shale exploration.

 


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