Tag Archives: natural gas

T. Boone Pickens Statement on President Obama’s State of the Union Address

Posted on January 25, 2012 | Leave a comment

“In his remarks in the State of the Union address, President Barack Obama again called for a national focus on developing a long-term energy plan for America. I agree we should use every available American resource. I applaud President Obama for highlighting natural gas and for calling on Congress to better promote its use.

“The expanded use of natural gas in America – in power generation and transportation – has enormous bipartisan support in the Congress and in the states. It is time to move from vague generalities to specifics on how we make this transition happen. I am confident that President Obama, as well as all the candidates for President, will lay out detailed plans on how they intend to achieve it.

“We cannot solve the OPEC dependency crisis without a focus on transportation. It is two-thirds of all oil use. Oil is not a major player in the production of electricity so creating more energy from natural gas, hydro, wind, solar or nuclear will not have a major impact on our dependence on OPEC for our oil. Finding a substitute for oil as a major transportation fuel will.

“We have massive amounts of natural gas reserves in the United States and we should immediately move to better utilize it. As a White House report on rebuilding our economy states, natural gas is the cleanest of the fossil fuels.

“America does not have a natural gas production problem – we are awash in natural gas. What we have is a demand problem and unless we bring both sides of the equation in balance, we will see this cleaner, cheaper, abundant, domestic resource exported in greater and greater quantities.

“I hope the President and the Congress will call on American ingenuity and creativity to utilize all of our domestic resources. America is blessed with having the cheapest energy in the world right now. It is that cheap energy – including coal, oil and natural gas – that will not only fuel our factories, cars, and trucks, but will fuel the resurgence of manufacturing in America, while creating solid, well-paying, and permanent jobs.”

Source: The Pickens’ Plan

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Obama Pushes Natural-Gas Fracking to Create 600,000 U.S. Jobs

Posted on January 24, 2012 | Leave a comment

“We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy,” President Barack Obama stated in tonight’s State of the Union address.

For years, the Horn River News has been supporting the the opportunity that North America’s shale gas reserves represent to provide a domestically produced, lower carbon energy source to the United States’ and Canada’s energy needs.

President Obama’s support for the shale gas industry was a little short on reality. The solution for addressing the concerns of fracking is not in having the drillers disclose the ingredients of their fracturing fluids but in passing law and enforcing the use of non-toxic fluids, and double lining the drill holes that pass through the water table.

Companies like GasFrac Energy Services Ltd. of Calgary – a company often referred to here – is leading the charge using non-toxic fracturing fluids and recovering nearly all the fluid. Double lining can be easily done (oil tankers use to be single hulled until oil spills forced the use of double hulled ships only). Technology can be employed to make the shale gas industry safer. And we should always look to employing the best technologies available to continually improve safety.

Obama Pushes Natural-Gas Fracking to Create 600,000 U.S. Jobs

Jan. 25 (Bloomberg) — President Barack Obama pushed drilling for gas in shale rock and support for cleaner energy sources to boost the economy in his final State of the Union address before facing U.S. voters in November.

Hydraulic fracturing, the process of injecting water, sand and chemicals underground to free gas trapped in rock, could create more than 600,000 jobs by the end of the decade, Obama said yesterday. The process, called fracking, is among a list of energy policies Obama said would fuel economic growth.

Full Article

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The EPA’s Fracking Scare

Posted on December 19, 2011 | Leave a comment

The fracking controversy and debate continues. A recent article in The Wall Street Journal titled The EPA’s Fracking Scare summarizes some points and makes some important observations. The one they fail to mention is that the fracking technology has dramatically improved to address many of the concerns raised. As stated in the article: “By all means take threats to drinking water seriously. But we also need to be sure that regulators aren’t spreading needless fears so they can enhance their own power while pursuing an ideological agenda.”

The EPA’s Fracking Scare

Breaking down the facts in that Wyoming drinking water study.

(Source: The Wall Street Journal) The shale gas boom has been a rare bright spot in the U.S. economy, so much of the country let out a shudder two weeks ago when the Environmental Protection Agency issued a “draft” report that the drilling process of hydraulic fracturing may have contaminated ground water in Pavillion, Wyoming. The good news is that the study is neither definitive nor applicable to the rest of the country.

“When considered together with other lines of evidence, the data indicates likely impact to ground water that can be explained by hydraulic fracking,” said the EPA report, referring to the drilling process that blasts water and chemicals into shale rock to release oil and natural gas. The news caused elation among environmentalists and many in the media who want to shut down fracking.

More than one-third of all natural gas drilling now uses fracking, and that percentage is rising. If the EPA Wyoming study holds up under scrutiny, an industry that employs tens of thousands could be in peril.

But does it stand up? This is the first major study to have detected linkage between fracking and ground-water pollution, and the EPA draft hasn’t been peer reviewed by independent scientific analysts. Critics are already picking apart the study, which Wyoming Governor Matt Mead called “scientifically questionable.”

Full Story: The EPA’s Fracking Scare

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China Shale Gas Discovery May Kill Canadian Pipeline and LNG Plans

Posted on December 12, 2011 | 2 Comments

Royal Dutch Shell has discovered shale gas in China – a market that North American producers hope will drive demand for their export plans to Asia.

Shell has not made any public confirmation of the discovery, but their local partner PetroChina has indicated positive progress. Professor Yuzhang Liu, Vice president of Petrochina’s Research Institute of Petroleum Exploration and Development is quoted by Reuters as stating:

“Shell has two vertical wells and they got very good primary production. It’s good news for shale gas.”

And while shale gas has been a boon in the United States, a similar revolution in China would be at the expense of North American (and others) producers hoping to export natural gas to China. Canada is also is looking towards Asia as the US has increased domestic production and Canadian exports to the US have fallen. Two separate groups have formulated plans for an Liquified Natural Gas (“LNG”) export facility in Kitimat, BC. To get the natural gas to the coast, a major pipeline is required. Considerable investment considerations that now might be seeing the market they were targeting for sales, starting to diminish.

The U.S. Energy Information Administration estimates that  China has 1,275 trillion cubic feet (tcf) of technically recoverable shale gas resources. That would make it the largest in the world followed by an estimated 862 tcf in the US. And given their long term energy demands, China will invest heavily in proving up the potential of this major energy source. Its cleaner then coal, and its domestic exploration, extraction and production would be a major job creator.

But not all is lost for Canada’s export of natural gas. The three major target markets in Asia are China, Japan and Korea. And the latter two, are still desperate of natural gas, and have no known shale gas deposits of any commercially viable size. In fact, it’s Royal Dutch Shell that is leading one of the two LNG export facilities being contemplated for Kitimat, BC.  Shell along with Korea Gas Corp (“Korgas”), China National Petroleum Co. and Mitsubishi Corp., are considering a plant that would produce and load 1.8 billion cubic feet of natural gas per day onto LNG tankers heading for Asia. The other plan is for a 1.4-billion cubic feet a day facility proposed by Kitimat LNG, which is owned and backed by Apache Corp. , EOG Resources Inc. and Encana Corp.

If Shell and PetroChina do determine that shale gas deposits in China are economically viable, and they are able to recover the amounts suggested by the EIA it will have an impact on pipeline and export facility plans in Canada. Worse case it may merely delay the plans as other Asian markets will and have made long term commitments to buying Canadian natural gas.

Regardless, the shale gas revolution that HRN predicted would have a significant impact on the global energy market and global geopolitical is well underway and may happen faster then we all expect. Keep an eye on Shell’s progress in China as their drilling activities are expected to be concluded by the end of the year.

Reuters: Shell strikes shale gas in China

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Shale Gas in Europe: Revolution or Evolution?

Posted on December 5, 2011 | Leave a comment

For a couple years now, HRN has predicted that the same technology break throughs that resulted in the shale gas boom in the US, and Canada will have a profound impact on the geopolotics of Europe, and other parts of the world as it unlocks trillions of of cubic feet of natural gas from the shale in several part of the world.

In a report released today (Dec. 5th, 2011), by Ernst & Young titled “Shale gas in Europe: revolution or evolution” indicates that while shale gas has had a transformative impact on the outlook for the US energy market, the impact on the European market may be more evolutionary in nature.

John Avaldsnes, Ernst & Young’s EMEIA Oil & Gas Sector Leader is quoted as stating;

“While exploration is underway in several countries such as Austria, Germany, Hungary, Ireland, Poland, Sweden and the UK, no shale gas play has yet been brought into production in Europe, and only a fraction of this resource base is likely to ever prove commercial and be produced. In addition, over half of all estimated European shale gas reserves, which accounts for almost 10% of the global total, are concentrated in just two countries, Poland and France.

“There are some difficult challenges that the industry needs to address. There appears to be no consensus across Europe on shale gas development and government attitudes vary, in some cases markedly. Public opinion on the issue is similarly divided, adding to pressure on governments to take action to either support or restrict shale gas development with most countries adopting a ‘wait and see’ attitude.”

A copy of the report is available here;
“Shale Gas in Europe: revolution or evolution”

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Shale Gas Reserves Could Reignite U.S. Economy

Posted on November 3, 2011 | Leave a comment

This story in Bloomberg is worth a read. The economic potential of shale gas to have a bigger economic impact is there. For the most part of its history, the Horn River News has focused on the potential of shale gas to reduce carbon emissions, and decrease US dependency on suppliers that are in conflict with with US interests.

Given the flat US economy we are seeing increasing interest opportunity in the shale gas industry as a positive contributor to the US economy. Here in British Columbia, Canada, hundreds of millions of dollars were invested into shale gas infrastructure, gas pipelines, roads, etc. All creating valuable jobs for BC.

Read: Shale Gas Reserves Could Reignite U.S. Economy

UPDATE: Business Week: Could the Shale Gas Industry Reignite the U.S. Economy?

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China Plans Subsidies to Tap Shale Gas Reserves Larger Than U.S.

Posted on October 20, 2011 | 1 Comment

As Americans debate about shale gas, China is moving forward to tap its own massive reserves of shale gas. And when they do and if they offset a good percentage of coal power generation  with natural gas power generation, the world will witness first hand the positive environmental impact this transition will have on the air people breath in Beijing.

According to Zhang Dawei, deputy head of the Strategic Research Center at the Ministry of Land and Resources, China will produce 6.5 billion cubic meters of annual output by 2015 and 80 billion cubic meters by 2020. China currently does not commercially produce any shale gas.

The U.S. Energy Information Administration (“EIA”) stated in April that there may be as much as 1,275 trillion cubic feet (36 trillion cubic meters) of shale gas in China. That is 12 times the country’s conventional natural gas deposits. The EIA estimates that China’s “technically recoverable” reserves are almost 50 percent more than the 862 trillion cubic feet held by the U.S. – the largest producer in the world.
Bloomberg News via the Sanfrancisco Chronicle:

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Kitimat LNG terminal granted export license

Posted on October 13, 2011 | Leave a comment

Fantastic news. Kitimat LNG has reached a major milestone and is one step closer to exporting liquified natural gas (“LNG”) from Kitimat British Columbia, Canada and dramatically changing the geopolitical landscape of Canada’s energy industry. The National Energy Board granted the 20-year licence Thursday.

The Kitimat LNG export facility will connect Canada’s vast natural gas resources to high-demand markets in Asia – specifically Japan, Korea and China. This is a critical link to diversifying Canada’s energy distribution industry.

In granting its decision the board stated:

“The board recognizes that forecast demand growth for LNG in the Asia Pacific region provides a new opportunity for Canadian producers to diversify their export markets. The board also recognizes that long-term oil-indexed sales contracts could provide for higher netbacks to Canadian producers. The size of Canada’s natural gas resource, proximity to markets in Asia and Canada’s stable political and regulatory environment, the board is of the view that KM LNG has the opportunity to compete in the global LNG market.”

Absolutely.

More work is needed to ensure that the Kitimat LNG facility, and pipelines that connect the BC’s Horn River Basin, and Montenay Basin as well as Alberta’s vast natural gas reserves to Kitimat and Asia. Kitimat LNG is owned by Apache Canada Ltd. , EOG Resources Canada Inc. and Encana Corp. The partner companies are expected make a final investment decision for building the project early next year at an estimated cost over $5-billion.

Kitimat LNG president Janine McArdle is quoted;

“It’s extremely exciting news for the project. This is one of the major milestones that we required for us to take a final investment decision. This puts Canada in a new place in terms of being a new secure supplier to the Asian markets.”

Full Story: Globe & Mail – B.C.’s Kitimat LNG terminal wins export licence

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Energy infrastructure megaprojects to create 1 million jobs in Canada

Posted on October 6, 2011 | Leave a comment

In a recent report the Canadian Imperial Bank of Commerce states that energy infrastructure would generate more than one million jobs over the next 20 years, help keep provincial and federal books from deteriorating further and have the added benefit of boosting productivity and energy exports.

CIBC vice-chairman Jim Prentice states;

“If we’re smart about this, we can continue to build out the country, we can create very significant amount of jobs and we can still maintain one of the lowest debt to GDP ratios of any industrial democracy in the world. We don’t need to rely on short-term stimulus spending, we need support for economic infrastructure that creates wealth.”

Mr. Prentice uses the phrase “nation building’ which is historially associated with Canada’s early history. And he is spot on here. These mega-projects are investments in the future of Canada and provide Canada a unique opportunity in a flat global economy that other countries would envy.

He is quoted as stating;

“Canada’s era of nation-building through transformational infrastructure investments is far from over as planned megaprojects will unlock resource wealth, secure new markets for Canadian energy and create a million new jobs”

Its the most ideal time to fast track these projects and get them going. Right at the moment when the world, and Canada are facing another economic dip (which may be putting it lightly).  As Mr. Prentice puts it;

“… in an economic climate where the world debates how much public money to borrow to create stimulus jobs, Canada stands alone in terms of its potential to chart a different course.”

He is absolutely right. And Canada should understand that this is an investment that is desperately needed and one that will be made. The opportunity is to make it now and create jobs, and provide an economic boost to Canada.

Mr. Prentice said goes on to state;

“No other industrial democracy in the world has such an opportunity. If we are smart about this, we can build out our country, create jobs and still maintain one of the lowest debt-to-GDP ratios in the world. We don’t need short-term stimulus spending, we need support for economic infrastructure that creates wealth.”

Well done Mr. Prentice. What are we waiting for, Canada?

Globe & Mail: Ottawa urged to invest in energy mega-projects

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Shale gas part of BC economic growth solution

Posted on October 6, 2011 | Leave a comment

For years the Horn River News has been covering the benefits of natural gas, its new found abundance in shale gas and huge opportunity for British Columbia has from shale gas assets and its advantageous proximity to the Asian market.

The last three years have been since dramatic changes in the North American natural gas market. Low prices, abundant resources, lower demand have all contributed in changing the North American market for good. The US is the largest producer in the world and no longer imports the vast amount of natural gas from Canada as it once did and the Canadian natural gas industry is suffering from it as they have no other distribution channel for selling natural gas.

As the Canadian natural gas enters a new era, the world is once again facing the possibility of  a global recession. Canada will fare better then others but the Canadian economy will not grow as once projected with nearly all analyst reducing their growth projections for Canada by a half to full percentage point.

When shale gas was discovered in northern British Columbia the Province of BC filled provincial coffers with billions of dollars from selling exploration licenses to energy companies large and small eager to tap into the Horn River and Montney basin. The money was welcomed as the global financial markets were about to be shaken. The Province committed hundreds of millions for infrastructure to support the shale gas industry of northern BC. But much more needs to be done; to save and grow the natural gas industry in Canada and BC

With both the EU and USA now stumbling again. The world is holding its collective breath again. Markets are shaking, data is suggesting economies are contracting and people have lost confidence in the market, the economy and their politicians.

Canada has been incredibly fortunate. The Federal Government of Canada has guided the country through the global recession without bankrupting the the country. Canada is likely to stave off a recession but growth will remain very sluggish.

In BC, and Canada the time for natural gas is now. Soft economic markets present opportunities to make long term capital investments that will create needed jobs immediately, and provide immediate and long term economic growth. The Province of British Columbia has been quite supportive of the natural gas industry over the last couple years. Accelerating and increasing this support now would reap needed economic benefits and finally put BC in the international energy market as a provider and export hub.

A recent article in the Vancouver Sun has finally caught up and recognized the importance not only of BC’s shale gas resources as a resource but as an economic driver at a time when the Provincial economy is forecast to soften.

Its simple. Due to our technical ability to economically extract natural gas from shale rock has made natural gas one of the most abundant energy cources in North America. Nearly 90% of Canada’s natural gas was exported to the USA. But the USA has their own shale gas and is the largest producer of natural gas in the world. In fact, plans are underway for the US to start exporting natural gas to energy hungry Asia.

However, the only way the natural gas industry can remain competitive – and worse case stay alive – is to be connected to the international gas market. And herein lies the economic boom opportunity. In order to connect to the international market, pipelines and export terminals are required. A good portion of this infrastructure is underway but more can be done in order to ensure that BC is the preferred export terminal for Asia.

Asia needs energy and demand there is going to increase. Public sentiment for nuclear power in Japan has fallen so in the interim alternative power options will be required and natural gas is a likely contributor.

If you are a reader of the Horn River News, you likely know all the benefits of natural gas as an affordable, cleaner energy alternative to oil and coal. Technology brought the gas out of the shale; technology is squashing environmental concerns for water pollution.

 

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