Natural gas is saving the earth.

The US shale revolution is now going global via LNG. Countries that formerly would have chosen coal for power generation are now going gas.

“There are markets like Bangladesh and Pakistan where traditionally they would have gone with coal but now gas can be the cheaper option once you include the cost of new infrastructure,” LeLong of Goldman said. “You are seeing these energy poor countries often with poor credit ratings turning to LNG.”

While China and India are the two carbon monsters in Asia, there are many smaller ones also doing the math about coal and gas and finding gas wins on cost, pollution and infrastructure.  Coal was the default option for years. but we’re seeing smaller markets embrace  natural gas as in Sri Lanka:

Sri Lanka will cancel plans for a 500 megawatt Indian-built coal-fired power plant at its strategic eastern port city of Trincomalee and will instead opt for a liquefied natural gas (LNG) power plant, a cabinet minister said late on Tuesday.

“We do not want to hurt India. So President Sirisena in his visit has offered an LNG plant instead of the coal plant,” Weerakkody told Reuters. “This has been discussed at the highest level and there is consensus.”

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London Local Energy

A quick word about London Local Energy.  You haven’t heard the last of us. In coming months, you’ll hear much, much more.

Simply put, in the last two years of waiting we’re becoming even more confident about supplying the lowest carbon, highest tax natural gas to the 3 million plus Londoners who it to heat their homes and take a shower every day. Or most days judging by London Underground recently.

Low food miles is a concept everyone understands.  Low energy miles in natural gas is an equally attractive prospect.  If I proposed artisanally  produced London olive oil, my floor would be covered in blood from the fight between Waitrose, Marks and Spencer and Whole Food.  Often the best ideas are simply too early.  But the smartest ideas come from those who don’t give up, refine them further and create enthusiasm from unexpected sources.  London Local Energy will be back. This time with friends.

 

Welcome to ReImagine Gas

This is the new home of No Hot Air. Most of the links to the past are still here, with the occasional dead link and graphics gone.  The most important part of the site are now the buttons to the right. Unlike the Friends of the Earth, I’m not a charity.

Things will look different, but some things remain the same. The most important thing is that No Hot Air’s archives are still here.  Readers already know that one of my most enduring, if not endearing, qualities is an ability, developed from years of practice to say I told you so. Having posts dating back to 2008 allows me to prove it.  The search section is still operating, and is much quicker. Explore eight years of the shale revolution.  It’s great fun to choose something random from 2010 and shake ones head in wonder, or shame, that so many experts were wrong.  Even worse, it’s amazing how much the themes of shale – damage, economics,  and sustainability being only three examples, are still used by both fracktivists, academics and financial analysts even today.

There were times I have been wrong. European shale gas is still too early, but getting closer.  Just because it hasn’t shown up yet doesn’t mean that it won’t. Thats a message I’ll be taking to Platts European Gas Summit in September.

The other place I’ve been wrong is underestimating how huge the Marcellus and Utica shales were.  They are truly monstrous with current production at a rate of 20 bcfd or over 200BCM, which is almost half of all EU (including the UK!) gas consumption.

European shale won’t be the same as the US.  We’ll have to reinvent it. Or, as I prefer, to re-imagine it. But it’s coming. Huge gas resources have been under the feet of customers for over 200 million years.  Another few years won’t change much.

Brexit and British shale

As anyone who follows me on Twitter knows,  I’m underwhelmed by the EU referendum vote.  About the only thing that makes me hopeful is how my experience in UK shale makes me believe the far more complicated issue of Brexit will never happen.  The UK has multiple examples of how difficult the simplest infrastructure can be : HS2, Crossrail, Heathrow Expansion, Hinkley Point etc etc.  The only big project delivered on time this century was the London Olympics, a special case connected with saving national embarrassment.  Many other projects proves how in UK infrastructure, one can’t do anything at all in less than multi-decade timescales, by which time the original problem has often become irrelevant.

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The curious case of the Frackmaster. What can we learn from it?

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In 1950’s America at the dawn of another revolution, that of Rock n’ Roll, there was the Payola scandal, when payments to disk jockeys to play particular records were illegal.

Methods became more sophisticated and third parties nosed in, yet because it was about US airwaves publicly regulated by the FCC, there were still cases even up to 2005.

What on earth does this have to do with energy?

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UK shale and Brexit.

embarrassed1My feelings about Brexit are obvious, but putting them aside,  consider what it may mean for UK energy in general and onshore natural gas in particular.

  1. The essential rationale for UK onshore gas remains. The North Sea is declining fast and the only alternatives will be imports.  Both Norwegian and LNG have links to oil prices and will get more expensive.
  2. The carbon case for UK onshore gas is as strong as ever.  If it’s an error to export lost tax revenue, it’s insanity to import high carbon gas instead of intrinsically lower domestic production.Thus, on rational terms, UK onshore investment would seem rational.
  3. UK investments, in any field, couldn’t previously depend on productivity, a highly skilled workforce or good infrastructure. They depended on a lack of risk. Enough said.

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You can be sure about shale – and Shell

sea-shell-300x200Reuters report about Shell and shale is among the most important shale stories of not only this year, but of the entire shale era.  Shell’s late embrace of shale actually makes a lot of sense. They are getting into shale at exactly the right time. ExxonMobil’s foray into XTO was stunning at the time, but in retrospect was too soon.  BP, Total and Chevron have made various, if often  tenuous, efforts. Statoil made the wisest and earliest investment in the Marcellus back in 2009 of any major, although ENI’s smaller US investment of the same year was also smart in timing and money.  BHP Billiton seemed to have bought at the height of the market in 2011, but even that will ultimately be in the money, even at these prices.

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The Mistrust of Science and what it means for natural gas.

sci placeboI’m in general good health. I never get so much as a sniffle, haven’t had a headache in years, and as long as I stay away from mirrors I feel 30 years old. Thanks to either good genes or the beneficial aspects accruing from twenty years of smoking, drinking and staying up all night, I often appear ten years or so younger than I actually am.

Don’t let that fool you. I’ve also had a fractured skull leading to two brain operations, a burst stomach artery, two separate forms of cancer and a heart valve replacement. Never once during my involuntary medical adventures did I ask to be prescribed the treatment 3% of doctors recommend. In short, I trust science.

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The Three Great Advantages of UK Shale Gas

worldmpThere are some key questions about shale gas internationally, and for now, the international front often means the UK.  Every country in Europe is awaiting the UK’s decision (on fracking anyway). But geology is the study of planetary resources.  The common idea that somehow the United States is uniquely blessed with the ability to drill for oil is an example of a strange concordance between anti-fracking activists and right wing US Republicans. I have always agreed with Roberto F. Aguilera’s point here:

As indicated in our recent book, The Price of Oil, successful developers around the world could reap benefits similar to those experienced by the US in its progress with unconventional gas. The advantages afforded by the shale revolution in the US have been so strong that its international spread is inevitable. Most of the technology employed is not proprietary and so can be transferred across borders.

 

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Storm Brewing in North Sea, as harbours onshore lie empty.

hurricaneThe 2016 version of the summer must-read for energy geeks, BP’s Statistical Review of World Energy was issued last week, and as usual it’s the best reading until the International Energy Agency World Energy Outlook is published in November for the geek Christmas gift market.

It contains much good, even great, world news, including the best of all: global energy intensity continues to fall, consigning the idea that energy use and GDP growth are inextricably linked to the dustbin of Peak Oil History. Even better news is how coal is also reaching a peak. Europe was one of the few areas that showed above average growth in energy use, admittedly from levels caused by economics and renewables.

Nonetheless, closer to home, there looks to be trouble ahead for both UK oil and gas production. There was a marginal recovery in North Sea gas production, but this chart shows the gap between consumption and production in the UK, as it developed in the 21st century:

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