Latest US Methane Study

eidBusy this week at House of Lords Tuesday and in Warsaw the rest of the week, but it’s important to discuss today’s Harvard Methane Study ASAP,  so I’m republishing Steve Everley’s piece from Energy in Depth here:

A new study published by the Proceedings of the National Academy of Sciences suggests that EPA’s greenhouse gas inventory may be underestimating total methane emissions in the United States, possibly by as much as 50 percent. According to the authors, emissions from oil and gas production could be twice as high as EPA data suggest, if not higher. But it’s worth noting a few key facts about the study, including some additional context that should prevent all of us from leaping to any particular conclusion based on this limited research.

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Six political myths about UK shale gas

do-not-flushjpg-3943d2bbe25405cfAhead of the Spectator Debate next week, the Spectator Magazine Coffeehouse Blog asked me to give them five green myths about shale gas – in a sentence or two each.

Firstly, despite the Spectator trying to set this up as some sort of right/left boxing match, I don’t see the debate in that way at all. Oil and gas is about the last communally held national resource that hasn’t been sold off, i.e. it’s Crown property and everyone in the UK is an owner of it, and that includes voters of all parties. So in that vein I’ll give one myth per political party.

Before I do so, I’ll repeat what I told the Guardian earlier this year: trying to put complex ideas into one sentence is not only rhetorically wrong but morally unsafe as it insults the intelligence of readers. There’s a great piece from David Shukman of the BBC today which highlights the issue of everyone wanting nothing anywhere near them. But of course, it isn’t everyone. The rational middle realises there are choices to make. All we can do is to try to make them informed and intelligent ones.

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How to stop worrying and love hydraulic fracturing

keepcalmandfraconThis is another presentation, How I Stopped Worrying And Learned To Love Hydraulic Fracturing hot off the presses from Tudor, Pickering & Holt, the Houston investment bank in London this past week. TPH said that people back in Texas would be surprised so many people were in a room talking about international shale gas anywhere, but especially in London.

The event was notable for a round up of shale resources worldwide, but started out with an up to date assessment of what’s been happening in North America. Next time I go to one of these, I’m going to try and bring a UK opponent of shale gas so that they can see for themselves what the reality of US production is, and decide if they want to either get out of the way or get out of the debate.

Another speaker at the event was Energy Minister Michael Fallon who again underlined how from the top at least, UK shale policy is done and dusted:

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Time to start selling natural gas again

natural-gas-Question-600304Although it seems there are shale events every other week in the UK, giving rise to the joke that the only people making money in UK shale are conference companies and security firm G4S, there have always been a number of conventional gas conferences, and it was only at last week’s EAGC in Brussels that the twain started to meet.

The conventional gas industry in Europe has been of two minds about shale, but last week’s two main themes were about increasing demand for gas in Europe and significantly, how to start selling gas as a product instead of a commodity.  Tacked on to the second were genuine concerns that the conventional gas industry was being “tarred with the shale brush” as one speaker put it.

Speakers from the majors such as GDFSuez, E.on, Italy’s ENI and Dutch transporter Gasunie all voiced concerns that public acceptance of shale could affect the entire gas chain of supply, storage, transmission and point of use. The UK’s No Dash for Gas was mentioned as example. This group trumpeted:

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Good News is No News on Fracking

supply chain riskOne way of keeping the “controversial” part of the fracking narrative trundling along is not only by keeping any allegations, insinuations or mis-statements in the public eye but by ignoring positive developments. Simply put, good news is no news. Some recent examples in the UK concern scientific studies of health, seismic and water impacts of shale. Everyone knows how controversial shale is.  It causes health impacts, earthquakes and will lead to a drought affecting what little uncontaminated water remains.  Or it might not, but that, is not news. Allegation is news. Proof is no news at at all. 

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China’s shale reality is also the new coal and environment reality

CleanEnergyChinaGasMore details are emerging about China’s shale gas production potential, not the resource potential that we can only guess at in the UK at this stage.

The exploration and development of shale gas in China is accelerating with production in 2015 set to easily exceed this year’s 100 million cubic meters, a senior official at the Ministry of Land and Resources, said on Friday.

“In 2015 we can achieve mass shale gas production with a goal of 6.5 billion cubic meters,” Zhang Dawei, director of mineral resources and the reserves evaluation center at the ministry, said at a meeting on developing the gas sector.

“I think it is even possible to exceed 10 billion cubic meters if Sinopec and CNPC are able to reach their annual capacity of 5 billion and 2.5 billion cubic meters respectively,” Zhang said.

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Shale, Carbon, Graphene and the Re-Industrial Revolution

elephantAndy Wohrley, a librarian at a major US university, has been a No Hot Air reader almost as long as I’ve been writing it, and has provided many invaluable tips over the years that have never been wrong yet. So when he asked me to publish this, I hope people will remember they heard it here first. The entire point of No Hot Air is that we don’t find the future looking in the rear view mirror.

Andy notes he “ follows one rule in his research on shale; he only reads people who know more than himself.  Fortunately, he is overwhelmed with research material.”

Before starting this under the fold, a key trend of conferences this year has been how to match demand to the great supply coming on board. We all know about increasing generation and promoting transportation and LNG, along with gas to NGL production leading to the end of stranded gas. The history of shale has been one where the completely new disrupting things for the better. It doesn’t get much better than this:

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Stealth Shale flying under global gas radar

sneakyThe commonly held, conventional wisdom, about shale gas being a North American phenomenon for a variety of technical and economic reasons needs to be updated. Certainly the vast majority of world shale activity has been in the US and Canada, but there is much shale exploration, and as I recently noted in China, actual production of shale emerging in some surprising places, albeit at much lower levels – so far.

One needs to explore before we produce, but some countries have a level of exploration activity that’s not widely known. The history of production in the US was for many years a model of first movers trying to be as unobtrusive as possible in order not to tip the hands of competitors. First movers could sign up land cheap, and in the early stages as Chesapeake showed in the past, it was easier to sign up leases, do minimal activity and simply sell them on.  

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World shale: Overwhelming US evidence makes international shale inevitable.

 houstonThere is still a lot of confusion in Europe and internationally, about the financial foundation of shale. This comes not only from the green side who have a vested interest in emphasising uncertainty and encouraging an insecurity narrative, but more dangerously, from the financial community.

A recent example came from Bloomberg New Energy Finance in their submission to the wide ranging House of Lords inquiry on The Economic Impact on UK Energy Policy of Shale Gas and Oil.  

BNEF insist they have no interest in new energy finance, and although they are entirely separate from the Bloomberg News brand in practice, there is great value in having the perception of independent observers.  

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China’s Shale Gas Breakthrough

china flagLooking at Chinese shale gas from a European perspective, one can’t help finding some familiar themes. It’s same day, same stuff, but instead of European Greens and Gazprom as at home, in China the new deniers of shale are not only Gazprom, but also many in the world LNG industry.  

51% of world LNG demand is from Japan and Korea alone, two countries uniquely dependent on LNG and cursed by geology, mountains and high population to be reliant for decades to come on the fuel. Just as Gazprom seeks to preserve the oil index link for European pipeline gas by casting aspersions on, and obstacles under, European shale prospects, LNG suppliers such as BG Group or Australia’s Woodside disparage any chance of short or medium term shale gas development in China. In the same vein, they often say US LNG will never happen, or that US shale gas prices will go up.

Japan and Korea are both mature economies and declining demographically, so any growth for LNG supplies will come from China or India. Already facing US LNG exports and huge, and expensive, Australian LNG projects in competition with Qatar for everyone else, LNG exporters are even more worried about the Qatar sized export projects based on offshore conventional discoveries in East Africa.

With the only growing market of any size being in China, the last thing LNG producers need to see is China repeating any US shale success.  

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