Daily Archives: September 3, 2009

Kate Mackenzie

All those upward revisions to natural gas reserves aren’t convincing everyone. Matt Simmons, author of Twilight in the Desert, is deeply sceptical. The Houston Chronicle reported a few quotes from him earlier this week:

Simmons simply doesn’t believe all the gas is there that many believe and that the process of getting at it – the water-intensive hydraulic fracturing method – is a huge waste of otherwise drinkable water. A report linking contaminated drinking water to the process could be troubling for the procedure, he says.

The ProPublica report linked to above says the Environmental Protection Agency found chemicals used in hydraulic fracturing in three water wells in Wyoming. More testing will be carried out over the next few months to try to determine exactly where those chemicals came from.

But as for Simmons’ other criticisms, he expanded on these views in a much longer interview with ASPO back in April:

I’ve never seen the industry hype something crazier.  Here are some numbers that I find enlightening.  Of all the shale plays, the only one that we have significant production history on is the Barnett Shale.  In the Haynesville, I think there are around 20 or 30 well-tests so far, and I don’t know that there are that many in the Marcellus.  Consider these figures in the March 22 Barnett Shale Newsletter.  It shows Barnett Shale total natural gas production by year, 1982 to 2008, all counties and fields in the Fort Worth Basin.  In 2004-3890, then 4973, then 6542, then 9180, then finally 12104; and I thought, gee, we increased production X%, but then I realized that’s the number of wells!  In 2008, we went to 4.8 Bcf a day, from 3.56 the year before-or up 1.24 Bcf/day.  We’re looking for an increase of 8 Bcf, according to the EIA numbers, so the Barnett Shale did 1/6th of that.

Simmons also talks about the EIA figures and says that with Barnett Shale, peak initial production “happens virtually when you come onstream”.

Meanwhile Stephen Holditch, head of the petroleum engineering department at Texas A&M University, told a conference that he believes there could be nine times as much technically recoverable gas in the US as is conventionally recoverable. This would equate to 32,560TCF in the US, he said, and that this 9x rule might apply to the rest of the world’s gas reserves, too. (H/T No Hot Air)

Related links:

International energy companies plan for global shale play (FT Energy Source, 24/08/09)
Natural gas bulls (FT Energy Source, 21/08/09)
Natural gas to build up its lobbying (FT Energy Source, 23/07/09)

Kate Mackenzie

By Tony Barber

According to an opinion poll, more than half of Denmark’s population has little or no confidence that world leaders will strike an agreement on fighting climate change at December’s landmark United Nations summit in Copenhagen.  It is just a hunch, but I reckon one impulse behind this pessimism is the widespread European suspicion that China, which recently overtook the US as the world’s biggest greenhouse gas emitter, will play an unconstructive role at the talks.

What if this suspicion is unfounded?

China’s official position is that the US, Europe and other developed regions bear the primary responsibility for cutting emissions.  In spite of its rapid economic growth, China regards itself as a relatively poor country that, on a per capita basis, consumes much less energy than the developed world.  China had no binding emission targets under the 1997 Kyoto Protocol and may well refuse to accept such targets at Copenhagen.

Kate Mackenzie

On FT Energy Source:

Geothermal woes

Moral arguments build, ahead of Copenhagen

Eni and the Gazprom argument

Solar energy from space, anyone?

On geoengineering, white roofs and lobbying

Further reading:

After dissecting biofuel pretenders, Robert Rapier looks at the contenders (R-Squared)

Michael Lynch responds to critics of his anti-peak oil oped in the NY Times (MasterResource)

Why it’s a great time to be a foreign environmentalist in China (Boston Post)

Bangladesh does the ‘cool look’: Suits banned to save power (BBC)

The security vulnerabilities of smart meters (MIT Technology Review)

Delays beset the Areva’s Finnish nuclear reactor (Energy Collective)

Natural gas surfeit about to end? (Rigzone)

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Kate Mackenzie

A key government-supported geothermal project in the US has been suspended amid technical problems. Altarock has halted drilling of its E-7 well in The Geysers, California, after running into “physical difficulties”.

The New York Times says the company had problems drilling the 12,000 feet, the depth it had sought to access heat deep below the earth’s surface, for generating energy. Altarock’s statement was less specific, but cited “geologic anomalies particular to the formation underlying this well location” as the cause of the problem – and added that they planned to experiment with the same technology in other locations.

Kate Mackenzie

China and India have both published collections of reports on their projected greenhouse gas emissions this week. Both sets of reports will be significant in each country’s negotiations ahead of the Copenhagen meeting in December, to agree a successor to the Kyoto Protocol.

And both countries have made the moral argument: that they should not have to pay the price of developing a low-carbon economy, after the developed world was able to grow rich in the era of cheap fossil fuels.

India especially makes a strong argument in its new set of reports. On a per capita basis, its CO2 emissions have historically been tiny: in 2006 they were 1.1 tonnes, compared to 10.8 across the OECD and 15 in North America. The average Chinese person in the same year was responsible for 4.3 tonnes.

Kate Mackenzie

Knight Vinke, the activist investor group, has Italian energy group Eni firmly in its sights. Yesterday the group, which owns almost 1 per cent of Eni’s shares, sent out a press release referring to an FT Lex note which argued that the combination of a growth-focused oil and gas exploration business with a high dividend-paying utility was a bad match.  Breaking it up would release as much as 1.5 times the company’s current value. Lex ventured that this in turn could have an energy security pay-off, such as boosting negotiations with Gazprom over gas supply.

The activist investor group has confirmed it feels the same way.  In a statement released yesterday afternoon it argued that the structure not only made little financial sense, but that it burdened Italian households and hindered the company’s ability to create jobs.

James Fontanella-Khan

India says emissions to rise fourfold by 2031
Fears that emission cuts will hamper economic growth (FT)

US utilities hit as consumers go green
Demand falls as consumers act to reduce energy use (FT)

BP finds ‘giant’ US oil field
3bn-barred discovery in the Gulf of Mexico (FT)

Lex: Big Petroleum
Rate of giant oil field discoveries has fallen (FT)

Lex: Financial eco-politics
Norway‘s ‘sustainable’ investments may show way for others (FT)

Saudi Arabia cuts October crude export prices to US
Price of extra light crude cut the most (Bloomberg)

Lula asked to take Brazil oil bill off fast-track
President presents proposal that would increase state control (Reuters)

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