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Oil has joined the Past… NG is the Future!
The
natural gas cartel, a dream of Russia’s just a few years ago, is dead.
It died when a natural gas revolution broke out and Gazprom lost.
Energy importing nations around the world are evaluating their own
geology, currently, to see if they have shale reserves that can be
tapped. Nations like Argentina, Germany, Poland, France, and Sweden are
looking into their national shale reserves.
The shale gas revolution is changing the world we live in, and the
power structures of the past. It is also quickly changing the politics
of future energy relationships. Nations that had to be nice to an
exporter, due to energy supplies, will be freed of their need for
discretion.
Shale gas is quite simply changing the whole energy paradigm in real
time. The unlocking of source rock, has altered the future history of
mankind. The world has discovered and unlocked its newest true world
changing source of stored energy.
- In the 1700’s, the world used wood for its energy source. The great mansions were heated with wood.
- In the 1800’s, coal provided the go-to source of transportable
fuel. It allowed railroads to rapidly move people at a pace faster
than a horse. Coal powered the Industrial Revolution. - In the 1900’s, crude oil became the primary fuel. It was refined
into fuel for aircraft, for ships at sea and into gasoline and diesel.
Crude oil provided the necessary cheap energy to fuel the rapid
expansion of civilization to the rest of the world. - The 2000’s arrived with the onset of peak light sweet crude oil.
The US had peaked in overall oil production decades before, and as the
new century started its reserves in both oil and conventional natural
gas where shrinking.
It was in this situation, that a group of small O&G companies,
starting with Mitchell and working separately to start, but building on
knowledge learned in the field, figured out how to unlock the natural
gas in the Barrett shale formation in Texas.
The technology was soon adapted to oil shale wells in the Bakken
formation along the Montana/North Dakota border. These two events have
changed how the oil & gas industry looks at resources today. Shale,
depending on type, can be a provider of long life high flowing oil
wells, or it can produce as much natural as from one shale well, as a
small conventional field would produce. The dynamics of on-shore energy
production has been the biggest change in the underlying economy
unnoticed by most people.
In
simple terms, a natural gas or oil well is engineered to have an
extremely long horizontal leg. The idea is to provide as large of a
circular surface as possible in the productive zone. They are drilling
these legs a mile long or more now. The long horizontal leg is
stimulated with extremely high pressured water, sand and proprietary
particles into the zone around the pipe.
This process opens up crevices in the rock, opening up cavities with
larger surface areas than you would get normally around the pipe. This
allows the hydrocarbons to be pulled into the well at higher than normal
flow rates for the type of rock. The combining of long legs with
extremely high pressure multi stage fracturing unlocked the hydrocarbons
bound in the rock itself. Normally, fields are traps with
accumulations in a sandy area. That is the oil or gas can be trapped in
a location that allows it to move. The shale rock is called a source
rock because the hydrocarbons found in those other pools may have leaked
out of it and moved hundreds of miles laterally.
The world has shale fields spread around the globe in locations
famous for oil production, and some not so famous. The new technology
will change the basic political power structures that exist today. The
era of Russia controlling Europe’s natural gas future is drawing to a
close.
“The size of reserves is mind boggling,” he said. “It makes a huge argument for a gas economy going forward.”Annop Poddar, Partner, Energy Ventures
If
the shale fields in Poland and Germany can be brought online at the
same level of production seen in the US, Europe on shore will be energy
independent via their own production. France has shale oil and shale
gas locations.
The good news about the geology of shale is that a zone is productive
typically over extremely large area’s covering tens or hundreds of
miles in different directions. This means that wells are almost never
dud’s. The actual hit rate on the new shale wells is extremely high.
This is because the horizontal leg allows the whole length to be
produced as a whole.
Exxon realized this technology had the capacity to change the world.
They purchased the largest player in the new techno revolution. XTO
has given Exxon a significant new position in the US, the new
technology, and view towards changing the world’s energy view.
The current strangle hold on hydrocarbons by national oil companies
is coming to an end. New large pools of hydrocarbons are being released
in the middle of western nations with hydrocarbon reserve ownership
available for commercial exploitation.
The US has grown its own internal natural gas supplies to the point
that it is now the largest producer of natural gas in the world. The
renaissance in production shows no signs of slowing down. In fact, the
US is trading the same BTU content as a barrel of oil, for less than the
equivalent of $30 per barrel.
In natural gas terms, 1 MCF of NG is worth less than $5.00 in the
US. That same MCF is worth $14 or so on the world market. This is a
price differential caused by a surplus of NG in the US, without the
capacity to export it easily. We’ve built a number of LNG importing
facilities, but the only exporting location for LNG is Alaska.
The US is now growing its overall hydrocarbon production profile
again. This is after many years of “experts” pontificating that the US
was always going to be an importer of energy. The US was supposed to be
trapped importing larger levels of energy from abroad forever. No one
expected the US to quickly become the largest producer of natural gas in
the world.
C
urrently,
companies like LNG are looking to spend billions of dollars converting
LNG import plants into export plants. The US could, once again, become a
major exporter of hydrocarbons. This is not a joke. The era of the US
being dependent on Middle East oil, is also ending.
Exxon is quietly buying up shale rights in Germany, as is Shell in
Poland. Australia and Argentina both have massive potential new
reserves. In short, there appears to be the equivalent of new Saudi
Arabia’s in BTU totals now popping up in western nations. The US
natural gas reserves are thought to be equal to 2x new Saudi Arabia’s.
It will take decades to unlock this gas, and make it commercially viable
in the market place.
The EIA, a US Government organization that tracks energy statistics,
reports that the US total reserves of oil increased by 8.6% in 2009.
The natural gas reserves of the US increased by 11.3% in 2009. The
official natural gas reserves of the US as of Dec 31st, 2009 were 283 TCF.
Shale gas development in Louisiana, Arkansas, Texas,
Oklahoma, and Pennsylvania drove the increase in proved reserves of
natural gas. Louisiana led the nation in wet natural gas proved reserves
additions with a 77 percent net increase of 9.2 Tcf owing primarily to
development of the Haynesville shale. Both Arkansas (Fayetteville
shale) and Pennsylvania (Marcellus shale) nearly doubled their reserves
with net increases of 5.2 Tcf and 3.4 Tcf respectively. Shale
development in Texas and Oklahoma wasn’t far behind, giving these two
States proved reserves increases of 3.2 Tcf and 2.1 Tcf. These increases
occurred despite a decline in natural gas prices relative to those used
in assessing reserves at the end of 2008. This underscores the role of
more efficient and effective shale gas exploration and productive
technologies such as horizontal drilling and hydraulic fracturing.
The US currently consumes about 23 TCF per year for context of total
US demand. The above 283 TCF includes the very first of the new shale
gas, helping to increase total national reserves.
The increase in total potential reserves based on shale development
is expected to be upwards of 1500 – 2000 TCF, once the shale basins have
been fully developed.This gives the US a century at current energy
consumption levels.
In locations like Argentina, mature developed basins are now being
relooked at as a possible source for cheap NG to be exported for
industrial use. While the world is watching Egypt, and the Suez Canal,
the era of oil fears from the Middle East is drawing to a close.
Natural gas is significantly cleaner, and now that it is about to be
available in very significant quantities in the developed world, the
emerging markets will be impacted too.
- WSJ
- The Fletcher School, Tufts University
- EIA (Energy Information Agency)
Summary: US Crude Oil, Natural Gas Liquids Proved Reserves 2009
- Natural Gas for Europe
Confessions of a Macro Contrarian www.JackHBarnes.com
»
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defeatist.
'Might as get the gas' and our bodies magically adapt to drinking poisonous water? Or maybe we can buy it from Canada/Mexico? Cheap Gas, and water trading like gold. seriously? How about people man the fuck up.
NG gas fraking is really frakking dangerous.
Take a look at Canada, where you can light the water in some areas on fire, or where the tailings are so toxic that birds that land on them don't take off again.
Im a fan of cheap energy, but its early days how that issue is going to be dealt with.
Also the energy involved is equal to the energy you get back, so that too is an economic issue once you take in to account the cost of exporting and shipping it.
I'd wait another year to see how things develop, before I'd put money down, as currently prices are in the dump.
NG will not replace jet fuel, or bunker crude for ships, or diesel for mining; at least not anytime soon.
NG could replace gasoline in vehicles and the result would be an increase in NG prices with no decrease in oil based products. Because, what do you do with the refined products that are replaced - eg gasoline?
Another frac flak.
1. Based on actual observation, frac gas production is about 10% of stated "resources."
2. Raise the price of gas to $15 MBTU and watch the good old US economy roll over, again. (That's a cost per BTU equal to $88.20 oil, to run 1/3rd of the electric grid.)
3. Try to fly a commercial aviation industry using equipment that requires 130,000BTU per gallon on LNG that delivers only about 75,000 BTU per gallon. Try to fly, period. Turbo props, maybe, with limited range. Maybe.
4. Convert the entire transport infrastructure to 2400 psi fuel (LNG). The cost will roll the economy over. Again.
Maybe a little reality instead of techno-magic-thinking and investor scams - which is what frac gas is - would be in order.
Thorny,
The US is the third largest producer of crude oil. It is starting to grow its oil production again, with the same shale technology driving the unlocking of the Bakken oil shale. The US has increased its oil production for the last three years. This technology is changing both NG & Oil production curves.
I never said the US was going to quit producing oil, or try and covert the airplanes to LNG. That is a strawman that you just created to knock down. This is about having a new source of rampable BTUs that can be used in today's economy to fuel additional long term economic growth. That this growth will happen in the bankrupted western states is not lost on me. I actually find that ironic.
The world will always use bunker fuel, diesel, gasoline and other refined aspects of crude oil. That wont change. It will be able to leverage LNG and Shale Gas & Oil for the transition period to new alterniatives.
Peak Light Sweet Oil, does not have to be the PEAK in global development.
The Bakken is a beautiful play, lord knows I have made money on some of the Juniors there. But to imply that the Bakken is going to reverse a 40 year decline in domestic crude production is, shall we say, disingenuous at best. Prudhoe Bay, one of the last truly elephant fields could not reverse the decline.
+ 10
5. NG will not run the US First Armored Division.
Thats why we have iraq. 90bbl just about right to power our military and strategically located...
Good, glad someone gets why we went to Iraq... WMD, Al-Queda was the excuse.
However, I remain to be convinced that there are 90 B bbls...
wise to be skeptical on reserve estimates...
Google conversion kits. About 2100 per vehicle....probably much less if economies of scale develop.
google "cost of converting the entire country's liquid fuel production and distribution system to LNG at 2400psi instead of atomospheric pressure or just adding this capability"
The increase in total potential reserves based on shale development is expected to be upwards of 1500 – 2000 TCF, once the shale basins have been fully developed. This gives the US a century at current energy consumption levels.
Ah, the devil is always in the details. AT CURRENT CONSUMPTION LEVELS is a very squishy proposition. If anyone thinks we are going to run all the cars and Wal-Marts off of natural gas well into the future, I have a feeling they are going to be sorely disappointed.
It buys us some time. We needed that slack right now. All praise to bob. He gives individuals and the economy slack. Come with me and worship bob at the church of the subgenius.
Europe is already running cars on Natgas, this is precisely the solution needed to avoid costly solar panel projects. the potential to localize development and production obviates the need for long supply lines, pipes, and shipping terminals. also where the electricty grid remains in place natgas could fire the plants instead of coal, which pollutes no matter where you are. additionally we are heading to a lower energy use economy. and while the automobile (last centuries technology is just coming online in places like China, america is moving away from that means of transport (no help to our myopic President, who bailed out GM and wants to spend billions on highway infrastructure)
buy UNG bitchez.
UNG is traders tool, not an investment... buy HGT, own the NG cash flow. If you have questions, ask.
Worldwide, there were 11,4 million natural gas vehicles by 2009, led by Pakistan with 2.3 million, Argentina (1.8 million), Iran (1.7 million), Brazil (1.6 million), and India (935 thousand).[1] with the Asia-Pacific region leading with a global market share with 5.7 million NGVs, followed by Latin America with almost 4 million vehicles.[1] The US has 110,000 NGVs, mostly buses.[1] Other countries where natural gas-powered buses are popular include India, Australia, Argentina, and Germany. Wiki
Shale NG is not a game changer, it will not replace oil anytime soon. If it can be used to displace coal, then all the better...
Be very careful about what is truly economic to produce...
Strong recommend that you read
http://www.theoildrum.com/node/6785
and
http://www.theoildrum.com/node/6229
Art Berman is an industry insider, while the articles should not be taken as the gospel, but the arguments presented must be understood before you draw any conclusion pro or con..
+10 Glad someone is paying attention to the details.
NG cannot replace conventional crude, as petroleum is used to make over 500,000 products. Fracking is a foul process, and keeping the BAU "lifestyles" of the west lurching forth, isn't worth destroying water tables.
I mean...you do like water, don't you?
It's all in the details....
I kinda have to
Not to worry, its available in bottles...
Ah ah... Well, the transition from one age to another was one of expansion, allowing in a new paradigm that meant more of the last paradigm.
Introduction of coal meant more harvested wood, introduction of oil meant more mined coal.
Everytime, the new alpha energy played as a sponsor for the previous ones, allowing more of them to be harvested.
Very hard to believe that the introduction of a new energy source will mean more oil being extracted.
Making this transition different from all the others. That is why all the stories about alternative energies are moot at the current point. Because previously, once a new source was introduced (and the device to allow the conversion to work), the new source outcompeted the previous one, not through economic option taking drivel but simply because the new source was better than the previous one: money was redirected from one to another not because of scarcity but because it would allow more to be extracted from Earth.
Today, many other sources are on the field, all outcompeted by oil. And the only way to introduce them in large usage is through depletion of oil, that is the very basic fact that when the best solution is no longer available, you have to do with the remaining solutions.
I've been involved in NG for more than 30 years as a lease owner, industry service provider etc. and have to say this is a very cheery enthusiastic perspective. While natural gas has a lot of attractive attributes and technological advances offer new opportunities, there are commensurate problems. It doesn't take much research to see that the boom-bust cycle in NG is dramatic with fortunes made, and more often lost, in an eye-blink. The next energy economy is going to be based on solar, wind and hydrogen - natural gas is just another legacy provider.
> The next energy economy is going to be based on solar, wind and hydrogen - natural gas is just another legacy provider.
It will. But what you don't realize is, that you can't run cars off solar and wind.
too quiet?
Only a minor quibble... hydrogen will never be any part of an energy economy...
deleted
The next energy economy will be Thorium.
NG can still add more in transportation.
NG is maybe legacy, yet it can serve its function at a transitional stage from oil to something else, thus one should definitely look into it.
Go watch the documentary 'Gasland' and we'll see if the o/p's happy tone changes. The process of 'fracing' and the huge number of chemical variants the pump in the group when they do this is lethal if it comes into contact with underground water reserves. Which it has in every state in US where drilling is undertaken. Take a industry map of the gas formations and overlay it with one for underground water reservoirs, and you'll have a clear idea how dangerous this is line of thought is.
The usual suspects of Halliburton, Cheney, total lack of congressional oversight, and federal regulator completely ignoring it, are at play.
There are no magical silver bullets.
ZH is loaded with lots of Obama/Saudi butt boys trying to save OPEC. All the enviro groups are on the Saudis payroll. These nat gas companies are usually smaller operators that are not connected to big oil. Big oil is jumping in but George Mitchell was not big oil.
Is that you Fraudie Nutter? I wondered when you would reemerge...
But Flakmeister, America is addicted to oil and we must get off of it now! Idiots...
I junked you and I will tell you why.
Arkansas is producting so much Nat Gas it literally cannot hold it all. We have about 2000 rigs working day and night plus or minus 100 rigs per month as production flucturates, rigs set up and drilled or sold and moved to the new buyer's land.
We have so many thousands of people running the trucks, fracking and minding the fluids day and night. So much so that we actually restricted the weights on some roads requiring even more drivers (In plenty, any one can drive) and trucks to keep the same stuff flowing.
I sit in my home running about 75 ccf a month in nat gas for heating if that plus cooking and hot water. Cheap, cheap and even cheaper levelized billing. Electriciticy is only 300 kwH per month and we have 5 Coal Plants plus one Nuke and four hydro dams in the area producing juice for the state and elsewhere. Nat gas too.
The USA has such a large amount of Gas sitting about and we are about ready to tell middle east to go fuck themselves and stop selling us that obselete oil. Hell we have enough of it here in West Texas and into Oklahoma and other places. Think Deep Water Horizon. If Obama has the Balls to start drilling again like a worker who has been on the job too long and is ready to blow the paycheck in the saloon and whore house for a night of debachery we would see energy independance again.
Don't get me started on Coal. There is still plenty of Coal in the US of A to last us hundreds of years. We can resurrect water gas technology and bake the coal to gas again.
But not until we learn to stop driving on that gasoline and desiel and start running off juice and gas.
I have also considered putting the house onto Solar, we have enough space on our south roof to hold the panels necessary to generate and export 3 to 10 kwH in excess of what we don't use each day. And a battery room for nighttime.
But guess what? the 39,000 dollar cost to do so can be more expensive than simply paying the Electricity and Gas bill for 25+ years at our monthly rates. Way cheaper and I will keep the 39K thank you.
We have trees too. Wood is easy to come by these days. If you want to make wood gas to run a generator to produce electricity using an old Austrian Method of making Wood Gas and pipe it to a engine, you can too.
If you want to go solar, cheaper and more efficient than solar panels:
http://www.technologyreview.com/read_article.aspx?id=17169&a=f
Excerpt:
"...the complete system for generating one kilowatt of electricity and 10 kilowatts of heat, including a battery for storing the power generated, can be built for a couple thousand dollars, Orosz says, which is less than half the cost of one kilowatt of photovoltaic panels."
If you got real skillz you can use the cooling cycle to heat a bldg too.
Lotsa options out there; all just depends on your wealth:brains ratio.
Another example of the trouble propagandists have to provide propaganda that could be believed for one second.
For better storytelling: Saudi Arabia is not a member of OPEC. They've played the swing producer part to break up the OPEC cartel to serve the US.
The Middle East, where some OPEC members are located is well endowed when it comes to natural gas.
Saudi Arabia is a member of OPEC.
Gerald Celente just released his report for 2011. He is optimistic about cold fusion. I have no idea if cold fusion is feasible but if it is it could be considered a magic bullet. But i really don't know what im talking about, hope some experts care to comment.
Second the recommendation to see Gasland. Dick Cheney really is cartoonishly evil btw. He's like a parody of himself.
Before anyone gets all excited, you should compare the latest cold fusion claim with the Sherrit-Gordon process...
Fusion energy still shows some promise. Small test reactors that utilize a plasma chamber to initiate and control the reaction are already being constructed. It's thoroughly irritating to hear people whine about how much the research has cost so far when the bald truth is that the stubborn dependence on oil has cost much, much more when the financial, environmental and political consequences are tallied up.
Fusion is a boondoogle, neat science, but very dirty energy if it could be made to work. Much dirtier than fission; Neutron flux is many times greater, so neutron activation radioactivity is much greater. You still have to thermalize the neutrons (the bulk of the energy produced is in the kinetic energy of the neutrons). Those fusion reactions that have low neutronicity are orders of magnitude more difficult to initiate....
I like Celente, but when it comes to energy he doesn't know what he is talking about and sounds foolish. Cold fusion is still a pathological science, as it has been for decades now...
Fusion? We don't need no stinking Fusion.
Purely anecdotal, but what I have been told (over a few beers) from an academic who researches for a well regarded Great White Northern University, and has helped develop the newish drilling techs that have opened up access to much of these new NG and difficult-to-reach oil deposits, is that the same tech can be used to harness geothermal. ie The farther down we can go, the easier it is to get to water's boiling point, (really almost any 'delta t' will do if you wish to force a liquid through a turbine generator)...
'Course it's likely business will only go there once we've exhausted all the hydrocarbons first, natch, no matter how polluted our water might get first. There are already some rural parts of the Great White North where you can light on fire the water coming from the taps; Hey, I hear it's great for bottled water sales!
Regards
Maybe not only is he a trends guy, maybe he is a great scientist too ;)
No, he is the dwarf in Twin Peaks.
http://www.youtube.com/watch?feature=player_detailpage&v=Q-Zx1JyJKAQ#t=86s
Celente may be talking about the CF in Italy at University of Bolonga. The uni is over 1,000 years old and not a fraud school like US uni's back Al Gore GW fraud. Cheney is far less evil than Obama or his little shills on ZH.
Yes, we have been fracturing formations for many years down here. we rapidy expand liquid nitrogen to the tune of 450,00 scfm and about 10-15kpsi. At this point we put in the frac material (little hard grit) that goes into the fissures the pressure opened up. When this is completed, a foam lift removes the heavy column ad the well produces more.
We are making the rigs with walking systems so they can move 40 feet and punch another hole.. progress bitches. Keep the Gov. out.
Like Goldman, we are doing God's work, removing these toxins so that Mother Earth is truly pristine..Today S.Texas- Tomorrow Yellowstone..Drill Baby Drill!