Why the Blackpool shale gas figures deserve to be taken seriously

As I’ve pointed out before Cuadrilla are at pains to make no predictions about the size of the resources available from accessing their estimated 200 TCF of reserves. As a general rule, resources can run from 10 to 30% of reserves, but Cuadrilla refuse to give any resource figures of any size at this stage. Given that even the lower figure is larger than current UK North Sea resources, this would make this one shale equal to 8 years of entire UK gas usage. This from Platts LNG Daily of 22 September:

In the UK, shale gas explorer Cuadrilla estimated gas in place in its Lancashire acreage at 200 Tcf.“This means UK LNG demand will disappear just as shale
caused the withdrawal of US LNG demand,” shale gas bloggerNick Grealy of website No Hot Air said. “This shows that this is an international story of great significance.”

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Europe’s Shale Gas Boom: Are we smart enough to start it?

A friend of NHA of long standing, Dr Alan Riley of City University has just written an op-ed for the WSJ Europe.  Alan’s arguments transcend the environmental and need to be listened to by the chancellors and various economy ministers of Europe:

With Cuadrilla’s announcement, shale gas goes from something ignored by policy elites on the grounds that it can only be developed in America, to something that is happening in real time in Europe.

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The Marcellus answer to some Blackpool shale gas questions

One week after the Cuadrilla announcement, we can see a completely understandable shale gas gift horse dynamic forming:

Experts have cast doubt on claims of a giant shale gas find in northwest England, leaving opponents to accuse the company behind it of painting an excessively rosy picture to win political support for the controversial project.

The news was welcomed by some politicians who see the project as a boost to UK energy security, with North Sea reserves declining sharply. But it was met with dread by environmentalists who say the drilling process behind shale gas –known as fracking — can pollute ground water.

Yet the excitement may be premature.

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The True Scandal of Shale Gas

I met Marine Joubert one of the authors of  Le Vraie Scandale de Gaz de Schiste when she was allowed in to the European Unconventional Gas Summit in Paris in February,  hopefully they will be a bit more careful of who they let in to the Krakow Conference  currently underway!

She appeared open minded at the time, although obviously the book was already in the works back then.  Sadly it’s  the same old unscientific Gasland worshipping story for the most part.  If you can read French, it’s worth reading to understand the French context of shale.

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Here’s frack fluid in your eye.

Some people will be leaping on this story:

BRUSSELS—Oversights in REACH registration dossiers could mean the use of hazardous chemicals in hydraulic fracturing to extract shale gas is technically illegal in the European Union, the European Commission told BNA Sept. 27.

Commission environment spokesman Joe Hennon said the Helsinki-based European Chemicals Agency (ECHA) had examined REACH registration dossiers “for a selected number of chemical substances having a high probability to be used in shale gas operations,” and had found no instances of chemical safety assessments mentioning exposure scenarios related to hydraulic fracturing, also known as fracking.

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UK Far Right Group Seeks Fracking Ban

They say that politics makes for strange bedfellows, but the addition of the latest anti-shale group goes way past that and travels into the realm of the bizarre:

Energy firm Cuadrilla Resources announced plans yesterday to sink up to 800 wells in the Lancashire area – but Nick Griffin MEP has called for a ban on shale gas exploration amid environmental and safety concerns.

The company, whose exploration efforts near Blackpool had to be halted earlier in the year due to fears that they were causing tremors, says there are 200 trillion cubic feet of underground gas in the area.

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Wasted gas and gas not burnt

Two must read stories in the NYT today and yesterday

First in what can only be described as a criminal story the massive amount of natural gas being thrown away, wasted and burnt off in North Dakota:

They are not wildfires caused by lightning strikes or other acts of nature, but the deliberate burning of natural gas by oil companies rushing to extract oil from the Bakken shale field and take advantage of the high price of crude. The gas bubbles up alongside the far more valuable oil, and with less economic incentive to capture it, the drillers treat the gas as waste and simply burn it.

Every day, more than 100 million cubic feet of natural gas is flared this way — enough energy to heat half a million homes for a day.

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Shale Gas and Oil in France

A key battleground in shale gas is France.  On the one hand,  there are massive resources.  According to the EIA France has shale gas resources only slightly below those of Poland, and more importantly many of those resources in the Paris Basin are more oil, essentially a field analogous to the Bakken Field which has been a primary cause of the $20+ gap between Brent and WTI oil prices.

On the other hand, France passed a law banning fracking earlier this year. That means that France is held up as some sort of paragon for the rest of the world to follow by almost every opponent of shale:

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Polish Shale Gas

3 Legs Resources revealed flow rate results from Poland yesterday. Are they great? No.  Are they bad?  Not in the least.  There is gas flowing, but there have been some hiccups.  Show stoppers they aren’t.  The buzz about shale has been getting so loud that now the markets see anything that isn’t perfect as a negative.  With the geological reality of drilling being that actual production has inevitable  real world production issues,  the results are positive, but not just yet.

Speaking to Alexander Fraser of 3 Legs in Paris yesterday, he said he was very happy with them, but he would say that wouldn’t he?  He also said  that the residual benefit their neighbours in BNK, ENI and San Leon Energy/Realm concessions should be very positive.  Those companies can take away far more positives than negatives from the 3 Legs experience.  In effect, they get a cheap lesson on what to look out for and what not to do.  Speaking of what to look out for, this positive from 3 Legs seems to have been ignored:

The well had two key objectives: firstly, to achieve a sustained gas production rate, and secondly to gather critical data for drilling and stimulation design for future wells. The Company is very pleased that the well has achieved both of these objectives.

But could this be literally the deeper story?:

Preliminary analysis of the logs and extensive other data indicates that a prospective deeper interval has been identified.

Dig deep for shale, be you driller, financial analyst  or journalist.

And what isn’t in the results? That over thirty per cent of the wells output was NGL’s, natural gas liquids.  3 Legs wouldn’t be drawn as to the actual make up of those liquids, but again the US experience shows us how natural gas can be just part of the story.

Shale Gas in the UK and France

I have two invitation only speaking enagements on Saturday and Monday in Paris, which may make posting more intermittent.

The Cuadrilla announcements this week show that shale gas needs minimum effort and impact to reveal possibly game changing resources.  My argument for France is that minimal exploration is a pin prick in the earth that can reveal massive resources.

We can provide the facts and the debate can continue among the French people based on the rationality and science that France is famous for.

For the sake of security, I’m unable to reveal the locations, but will give a full report next week.  Many people point to France’s fracking ban as rationale for their fears, especially now they no longer  have New York State’s moratorium as negative example.  There are only two sure things about France that we need to know:

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