Its unfortunate that Duke Energy scrapped plans for a $24-billion nuclear project in central Florida citing the boom in shale gas as the reason for the cancellation. This short sited view will only result in a the project re-emerging at a later date at a substantially higher cost. Though the Horn River News has long been supportive of the opportunity presented by the boom in shale gas globally, and called it as being the most important energy source of the next century, it is important to realize that no one single source can meet growing global clean energy needs. Nuclear will play a critical role in developing a sustainable, low emission energy mix.
(Source) North America’s nuclear industry received more bad news last week when Duke Energy scuttled a planned $24-billion nuclear project in central Florida, as competition from low-cost gas has cast a pall over a long-promised renaissance.
Duke is only the latest in a list of companies that have either cancelled construction plans or announced closure of reactors that had been scheduled for costly overhauls.
The industry has run into a number of problems including weak power demand and cost over-runs. But it has also become hard to justify new nuclear in the face of a shale gas boom that not only has brought low prices, but is expected to keep a lid on the fuel costs for decades to come.
Ontario is currently redrawing its long-term energy plan, and will be reviewing proposals from Westinghouse and Candu Energy to build two reactors to make up for the loss of capacity when older ones reach end of life in the next decade.
Full Article: Globe & Mail; Florida nuclear project cancelled in face of shale gas boom
This week marks the fifth anniversary of the announcement of the Pickens Plan. Mr. T. Boone Pickens has launched a video celebrating and summarizing all of the accomplishments of the Pickens Plan and an op-ed that he wrote which was published in the Dallas Morning News.
Congratulations on five successful years T.Boone! Here’s to five more.
Photo: AP Photo/Charles Dharapak
In a speech yesterday in President Barack Obama stated the Keystone XL pipeline will be rejected unless it’s clear that it won’t exacerbate global warming.
“Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interests,” the President said, adding “our national interest would be served only if this project does not significantly exacerbate the problem of carbon pollution.”
President Obama has appeased the opposition while setting Keystone up for approval later this year because Keystone will easily meet the stated requirements.
First, with or without the Keystone pipeline the Alberta oil-sands will increase production over the coming years. The pipeline will not have an impact on this growth or the carbon emissions from the oil-sands production.
Second, the increased shipment of Alberta oil-sands product via the Keystone is intended to replcace heavy oil from Venezuala and other suppliers. So again, the keystone pipeline will not result in a net increase in emissions.
In fact, if the Keystone is not built there will be an increase in emissions as oil-sand bitumen will be shipped to the USA from Alberta buy diesel powered locomotives and also have an increased risk profile compared to shipping via pipeline.
President Obama has set the criteria know that it will be achieved and when approved will be able to defend his decision.
The alternative solution would be to build refining capacity in Canada and ship end products rather then raw bitumen to the USA. The Americans would happily buy it and it would create all those jobs in Canada rather then the USA (apparently they don’t want the jobs or don’t need them in the USA!)
Keystone XL will get built, and so will the Northern Gateway pipeline which will open a secondary market for Canadian oil and gas in Asia as it will also meet the same criteria. It is not good business to be dependent on just one customer just as the USA is not dependent on one supplier.
As anticipated, Britain has doubled its estimated shale gas resources in northern England, which could have a positive impact on reducing reliance on imports and fundamentally transform the the UK energy market.
The familiar impact of shale gas on the north American energy market, could be realized in the UK providing a domestic source of clean burning natural gas. The British Geological Survey estimated today that the Bowland shale gas area holds 1,300 trillion cubic feet (tcf) of natural gas.
There is still plenty of exploratory work programs to conclude before the economic feasiblity of the Bowland shale gas. Interested parties will also have to invest in educating the local communities and environmentalists on the latest technology that addresses most of the historical concerns on the fracking process.
For example, we have oftern referred to the tremendous success of GasFrac Energy Services of Calgary, Alberta which uses organic based fluids that are 99% recoverable and recycled back into the fracking process. At the same time, the company’s technology increases overall production rates. Very positive. It just proves that technology can solve problems and improve performance both in production rates and environmental
Reuters: Britain doubles north England shale gas estimate
(Source: The Guadian) New estimates of the UK’s reserves of shale gas will be published on Thursday, and are expected to be much larger than originally thought – potentially supplying the UK with decades’ worth of natural gas, if a high proportion of the gas in the rocks can be extracted at a low cost. However that key question that cannot yet be answered due to the lack of experimental wells drilled so far and the challenges posed by the UK’s high density of population.
New shale gas drilling is likely to come under fire from protestors, though ministers are hoping to put off opposition by offering local communities incentives to encourage them to agree to the fracking operations. The incentives which may take the form of energy bill discounts or improvements to local amenities.
The survey of shale reserves, carried out by the British Geological Survey at the request of the Department of Energy and Climate Change, has been much delayed, reflecting how politically controversial it is. Read full story.
Oil and gas production from tight shale formations clearly is a long-term phenomenon and not a short-term trend, Deloitte LLP officials told reporters. The financial services company found growing confidence in unconventional energy resources in a survey it conducted last year, said John England, a vice-chairman and leader of its oil and gas practice.
“Huge investments are flowing into this sector from previously unheard from sources,” he said on May 21 during Deloitte’s 2013 Washington Energy Conference at nearby National Harbor, Md. “It’s a reason so many foreign companies have come into the US. Investment recently has flowed to midstream infrastructure, but there’s still strong interest upstream.”
More natural gas liquids are being recovered along with the shale gas, and that’s attracting investments too, he observed. “It’s interesting that we’re having this debate about authorizing more [LNG] exports when we’re already export significant amounts of NGLs,” England said.
Growing tight oil development also is generating more investments, he continued. “Even in the Eagle Ford and Bakken formations, recovery rates are still quite low so there’s a real technology opportunity,” he said.
Joseph A. Stanislaw, Deloitte’s independent senior energy and sustainability advisor, said the whole global energy equation is changing because of what North America is doing with shales. “This new fossil energy abundance could benefit alternatives if we use it not as an end, but a means,” he suggested. Read more…
(Source: Blomberg) According to a commission report prepared for a summit of EU leaders, shale gas production has contributed to a widening gap between U.S. and EU industrial prices for energy. The increase in European energy prices is linked to the inconsistency of EU policies to boost the share of renewable energy, increase energy efficiency and cut greenhouse gases, as well as to national policies that distort the internal market, according to a study.
Bloomberg: “EU Seeks Energy Integration as U.S. Shale Gas Widens Price Gap”
According to a recent report by the Institute of Directors, shale gas could be the “new North Sea” for Great Britain providing tens of thousands of jobs, and supply valuable energy resources .
The Telegraph: “Shale gas ‘could be a new North Sea for Britain’”
This article in the Globe & Mail is worth a quick read. Though the proliferation of technologies for shale gas and tight oil will spread around the world, it take more then just technology to make the process of extracting these resources work. Mainly, water. For example, China may have more shale gas then that found in all of the USA, but its in the dry arid eastern regions where water is scarce. But with time, this too is changing with the evolution of new technologies that recover and recycle 99% of the fluids used in the fracking process. Time will tell but history has shown that opportunities are created by providing solutions to problems.
The geographic proliferation of shale gas and tight oil is inevitable
Globe & Mail (Source) This question keeps getting repeated: “Will shale gas and tight oil technologies proliferate beyond North America?”
Of course they will. There is no precedent for game-changing innovations in any business to respect territorial boundaries. So some remaining questions are, under what conditions will shale gas and tight oil be developed in other countries, how long will it take, and where first?
With respect to necessary conditions, it seems Texas has the right stuff. At a major conference in Dallas last week, a few thousand exuberant U.S. oil and gas executives were gushing over recent production growth from unconventional resources. North Dakota’s Bakken seems like yesterday’s news as attention now shines on the productive oil potential of the legendary Texas Permian Basin.
The stock, U.S. oil man’s answer to what drives such domestic exploration frenzy is the American principle of landowners’ mineral rights – if you own the land on the surface you also have title to the oil and gas beneath your feet. This alignment of financial interests between private landowners and oil companies lubricates the wheels of capitalism like nowhere else. Ergo, the converse argument goes, we are unlikely to see meaningful shale gas or tight oil development in other parts of the world, where no such subsurface benefits accrue to the landowner. But there are flaws in this line of thinking.
HRN has long recommended that more natural gas be used in the U.S. and Canadian energy mix in order to take advantage of this abundant low cost burning fuel domestically before exporting these benefits overseas to countries that have totally embraced expanded usage of natural gas in transportation and power generation. In the U.S., the abundance of natural gas can play a major role in energy independence or at a minimum reducing the amount of oil imported from OPEC.
Peter Gardett covers the topic in his article “Natural Gas Exports:’What’s the rush?’ Asks Dow. An article worth reading.
The debate over natural gas exports from the US has broken out of the energy sector and begun to raise temperatures across the political spectrum, with a high profile Congressional hearing this week underlining the stakes at play in a Department of Energy policy decision on the economic standing of natural gas export projects.
Despite being painted as absolutely opposed to exports of domestically produced natural gas and its position as a leader in the manufacturing sector’s opposition to unrestricted approval of export projects, Dow Chemical actually favors exports to free trade partners but is concerned about the impacts of unchecked exports to non free trade countries, the company’s Vice President for Government and Public Affairs Kevin Kolevar told AOL Energy in a recent briefing. Contine to full story.