Shale Gas - Mod note post#117

garth-marenghi

Oscar winning singer/songwriter Glen Hansard shows his support for the anti-fracking cause with a "Farming not Fracking" t-shirt backstage before his gig at Electric Picnic. (Photo attached) Glen brought the t-shirt on stage and later held it up to the crowd, asked people to take photos and spread across the internet.

Sligo Comedian John Colleary (RTEs The Savage Eye) wore a Love Football-Hate Fracking t-shirt during his show to a packed audience in the Comedy tent and reminded people of the importance of the issue. (photo attached)

Christy Moore and Declan Sinnott also brought the t-shirt on stage to promote the cause and reaffirmed their committment to it.

Many thanks to them all for raising public awareness to this.

Waestrel

garth-marenghi wrote: »

Oscar winning singer/songwriter Glen Hansard shows his support for the anti-fracking cause with a "Farming not Fracking" t-shirt backstage before his gig at Electric Picnic. (Photo attached) Glen brought the t-shirt on stage and later held it up to the crowd, asked people to take photos and spread across the internet.

Sligo Comedian John Colleary (RTEs The Savage Eye) wore a Love Football-Hate Fracking t-shirt during his show to a packed audience in the Comedy tent and reminded people of the importance of the issue. (photo attached)

Christy Moore and Declan Sinnott also brought the t-shirt on stage to promote the cause and reaffirmed their committment to it.

Many thanks to them all for raising public awareness to this.

Great, with such expert geologists and engineers such as Hansard and Moore weighing in on the topic, we surely will have rational debate on the matter of fracking.

Lets frack, but lets do it safely, cleanly, and in the best way we can. Best practice. Musicians have nothing to offer to the debate other than their opinion. And you know what is said about opinions.

Macha

Waestrel wrote: »

Great, with such expert geologists and engineers such as Hansard and Moore weighing in on the topic, we surely will have rational debate on the matter of fracking.

Lets frack, but lets do it safely, cleanly, and in the best way we can. Best practice. Musicians have nothing to offer to the debate other than their opinion. And you know what is said about opinions.

I don't think Hansard and Moore are claiming to be experts but are lending their celebrity status to increase media attention on the issue.

The question remains whether it is possible to frack safely and cleanly. And whether we really need the additional reserves, given that the gas industry itself claims that gas is a transition fuel.

nedzer2011

Think that the Bord Gais price rise and subsequent feedback answers the question of whether we 'need' it or not.

garth-marenghi

Waestrel wrote: »

Great, with such expert geologists and engineers such as Hansard and Moore weighing in on the topic, we surely will have rational debate on the matter of fracking.

Lets frack, but lets do it safely, cleanly, and in the best way we can. Best practice. Musicians have nothing to offer to the debate other than their opinion. And you know what is said about opinions.

Thank god for the likes of Glen Hansard and Christy Moore lending their suppport to campaigns like this because when it comes to PR and publicity it is not a level playing field. The gas/oil companies have vast wealth to spend on PR and advisors to push their agenda and financial interests while those opposed to fracking have to depend on local people to donate their valuable energy and time and are motivated not by money but the desire to protect their communities. The gestures of people like Christy Moore, Glen Hansard and John Colleary (the savage eye) are hugely important and bring the issue to people who may not have heard about it.

Nobody is claiming they are experts but they have looked at the evidence and decided where they stand. Its up to everyone else to do the same.

With regards to fracking safely here are links to just a few reports from different institutions/individuals which question whether that is possible.


http://www.pnas.org/content/early/2011/05/02/1100682108.full.pdf (Duke University on contamination of water)

http://www.news.cornell.edu/stories/March12/FrackingAnimals.html (Cornell University on animal health risks)

http://frackingfreeireland.org/wp-content/uploads/2011/08/Human_health_risk_assessment_of_air_emissions1.pdf (Colorado School of Public Health)

http://www.irishtimes.com/newspaper/ireland/2012/0807/1224321631679.html ( the environmental pillar of social partnership that consists of An Taisce, Birdwatch Ireland, and the Irish Doctors Environmental Association to name but a few)

http://www.youtube.com/watch?v=ahVkrM1a25k&feature=plcp (Dr Carroll O Dolan on the public health implications of fracking)

Macha

nedzer2011 wrote: »

Think that the Bord Gais price rise and subsequent feedback answers the question of whether we 'need' it or not.

Any proper energy policy will address the three questions of energy security, sustainability and affordability. Shale gas fails on two of those. It is not sustainable, nor would it contribute to lower prices. The costs of shale gas extraction would be considerably higher in the EU than in the US, where the industry has been allowed to avoid much environmental regulation. Much also depends on details such as the actual depth of the reserves. The Marcellus Shale seems to be averaging around 2,000m but Exxon Mobil pulled out of Polish shale projects after finding the gas there was closer to 4,000m.

As for energy security, I try not to take a gas company's declaration of potential reserves at face value.

meenaghman

Waestrel wrote: »

Great, with such expert geologists and engineers such as Hansard and Moore weighing in on the topic, we surely will have rational debate on the matter of fracking.

Lets frack, but lets do it safely, cleanly, and in the best way we can. Best practice. Musicians have nothing to offer to the debate other than their opinion. And you know what is said about opinions.

This post is long, but bottom line, Shale Gas not the Nirvana.

Perhaps Art Berman may be quoted, along with Society of Petroleum Engineers and US Geological Survey

As you may be aware there's a lot of talk as to whether shale gas is as abundant as first thought. (USGS re-evaluation of the Marcellus shale reserves). There's also a major problem with Well recovery rates. Check out the USGS figures for EUR versus what the companies claim. The SPE also know there's a problem with the ARPs formula used by companies to claim that wells last for 30 years (Tamborans are 28 yrs) as the wells don't decline in this manner. The companies use a b factor greater than 1 (Tamboran =1.5) which SPE say gives false impressions.

USGS publications http://pubs.usgs.gov/of/2012/1118/OF12-1118.pdf page3.
August 2012, revised EURs for shale plays.

Arthur Berman - a summary here : http://aspousa.org/2009/08/lessons-from-the-barnett-shale-
suggest-caution-in-other-shale-plays/
Berman showed that the curve, and hence EUR was affected by using a B factor greater than 1,
and suggested from actual production rates reviewed that this was not correct.
Powers associates report on Fayetteville. http://www.financialsense.com/contributors/bill-
powers/2011/05/02/the-fayetteville-shale-peaks
An analysis of Fayetteville shale which is most analogous to Lough Allen Basin.
society of Petroleum Engineers report on validity of arps formula -Cheng,Lee,McVay.
http://www.spe.org/ejournals/jsp/journalapp.jsp?pageType=Preview&jid=EREE&mid=SPE-
108176-PA From the abstract “Our work indicates that, as observed in field data, transient effects and
coexistence of different flow regimes between layers lead to abnormal decline behavior (b > 1.0) in multilayer tight gas
wells, which leads to errors in production forecasts. Our new procedure provides a method to minimize these errors.”
http://www.worldenergyoutlook.org/media/weowebsite/2012/goldenrules/WEO2012
_GoldenRulesReport.pdf page 53..talking about higher capital and operational costs for shale gas in europe.



So essentially these wells are good for 5-15 years, if even that. As Berman points out below some more scrutiny of the costs needs to be done. Remember some of the costs are amortized over 28 years, if well life is shortened those costs go up (think lower mortgage payments over 30 years v 20 years). Secondly some of the costs are a function of costs/gas produced. If less gas produced, cost per unit of gas increases too.

"Your observations are correct. The main point is that shale gas empirically only works in marine oil source rocks. Has Tamboran done resource assessments to determine source type, richness and thermal maturity? Has the Bundoran Shale sourced any reservoirs in the basin? Are the samples based on vertical wells or outcrop?

The assumptions in the attached type curve appear optimistic as do the projected costs. What are land, overhead, lease operating and interest expenses? What are taxes and royalties? I would request a full-cost, discounted net present value analysis with all assumptions itemized. I am certain that payout is not in 22 months.

There is little precedent for 5% terminal decline rate except theoretical since no well drilled and completed with modern technology has yet reached full boundary-dominated flow to determine terminal decline. If you run a NPV10 analysis on their type curve using all of their assumptions about IP, price, decline rate, etc., I imagine that you will find that 70% of NPV occurs in the first 5 years, 85% in the first 10 years, and little NPV beyond 15 or 20 years. So, regardless of well life, decline rate, etc., if there is no NPV, there are no reserves in that range of the well's life.


Perhaps the most damning though are the insider emails

http://www.nytimes.com/interactive/us/natural-gas-drilling-down-documents-4-intro.html

Macha

The European Commission has released three studies on shale gas today. One on the climate impacts, one on the other environmental impacts and one on the economics. You can see them here:

Climate impacts: http://ec.europa.eu/clima/policies/eccp/docs/120815_final_report_en.pdf
Environmental impacts: http://ec.europa.eu/environment/integration/energy/pdf/fracking%20study.pdf
Markets impacts: http://ec.europa.eu/dgs/jrc/downloads/jrc_report_2012_09_unconventional_gas.pdf

Up until now, the only significant study carried out by the Commission had been a legal assessment of the legislation covering shale gas activities in Europe. The findings of that report were that no more legislation is required on the exploration phase, but it was less confident to say the same on the exploitation phase.

meenaghman

nedzer2011 wrote: »

Think that the Bord Gais price rise and subsequent feedback answers the question of whether we 'need' it or not.

Tamboran's business model which is suspect (see above) relies on gas at 11 dollars / mcf. 1 mcf = approx 1MMBTU. 1MMBTU is currently trading @6.00 pounds on the NBP. 11 dollars is £6.90. Now I'm sure as we go into peak season that the price of gas will rise, but remember there's only so much the market will bear anyway. The average price has been @6.00 or under for this year on the NBP. There was a spike up to about 9GBP in Feb.

Wandsworth

Macha wrote: »

I don't think Hansard and Moore are claiming to be experts but are lending their celebrity status to increase media attention on the issue.

The question remains whether it is possible to frack safely and cleanly. And whether we really need the additional reserves, given that the gas industry itself claims that gas is a transition fuel.

The other question is whether or not we want to be held to ransom by Russian oligarchs over the price of gas.

I think it is impossible to have a rational debate about fracking as many who argue against it do so more from an emotional standpoint and less from an evidence based one.

Here in the UK, a reshuffle in the government finally seems to indicate that our government will come to its senses about energy policy and realise that covering the counrtyside with windmills is not an energy policy in terms of reliability or cost, and anyone who is interested in reducing their gas bills ( which also means electricity bills) by 75% ( yes, 75%) should avoid the emotional anti frackers with their one sided arguments, and look at all the facts for themsleves

garth-marenghi

Wandsworth wrote: »

The other question is whether or not we want to be held to ransom by Russian oligarchs over the price of gas.

I think it is impossible to have a rational debate about fracking as many who argue against it do so more from an emotional standpoint and less from an evidence based one.

Here in the UK, a reshuffle in the government finally seems to indicate that our government will come to its senses about energy policy and realise that covering the counrtyside with windmills is not an energy policy in terms of reliability or cost, and anyone who is interested in reducing their gas bills ( which also means electricity bills) by 75% ( yes, 75%) should avoid the emotional anti frackers with their one sided arguments, and look at all the facts for themsleves

Have to totally disagree about your emotional debate as opposed to evidence based one from the anti-fracking side. If you look at this page of the thread alone there are plenty of links to numerous evidence based studies from various individuals/academic institutions. An unfair/untrue point that you are making.

meenaghman

Wandsworth wrote: »

The other question is whether or not we want to be held to ransom by Russian oligarchs over the price of gas.

I think it is impossible to have a rational debate about fracking as many who argue against it do so more from an emotional standpoint and less from an evidence based one.

Here in the UK, a reshuffle in the government finally seems to indicate that our government will come to its senses about energy policy and realise that covering the counrtyside with windmills is not an energy policy in terms of reliability or cost, and anyone who is interested in reducing their gas bills ( which also means electricity bills) by 75% ( yes, 75%) should avoid the emotional anti frackers with their one sided arguments, and look at all the facts for themsleves

Did you read any of the referenced studies above just been published by the EU. Gas from Shale excluding any loan Interest or cleanup costs, will be best case 5-12 dollars/mcf to produce. That's the break even figure. Now for NPV10 cash flow analysis one will need the price ones sells at to be double that over the lifetime of a project to ensure viability.. (You aint gonna get investors putting money into a project via shares unless the return looks OK)

So price to market excluding some costs is 10 dollars to 24 dollars per mcf. Gas is trading today at 6.00 pounds (9.60 dollars) per MMBTU (which is equivalent to an mcf).

Again Please note the above doesn't include well capping and clean up costs.
The 5 dollars/mcf assumes large EUR wells and long well life, something which doesn't seem to be the case with Shale Wells.

So Gas isn't going to be any cheaper than today. So get real with the cheap gas idea. Just wishing it will be cheaper is your emotional response coming out. The only way Shale Gas can be viable in Europe is if the gas price increases.

ShanePouch

It’s true that gas prices in Europe are high, although costs in the USA are considerable lower thanks to fracking, according to an article in Forbes and another in The Economist.

While cost of the fuel source is important, other costs of producing energy have to be taken into consideration. Such costs as energy plant commissioning costs, operation and maintenance costs, and the costs of decommissioning energy plants have to be taken into consideration. Additionally, what is called “energy security” also has to be taken into account.

http://www.forbes.com/sites/jamesconca/2012/06/24/actual-energy-costs-are-driving-us-towards-a-natural-gas-nation/

According to Forbes and The Economist, the cheapest form of energy taking all these issues into account is from gas, and in the USA fracking has contributed to lowering the price of gas available.

http://www.economist.com/blogs/schumpeter/2012/05/americas-falling-carbon-dioxide-emissions

The price of whatever fuel is used to produce energy becomes less relevant when the fuel sources are restricted, cut off or made increasingly expensive, and it seems relevant to consider whether any country wants to be more dependent than is necessary on foreign sources of fuel.

No form of fuel is perfect, and all are expensive, (even the costs for Hydro are expensive), and it seems foolhardy to ignore the actual experience from abroad from a country which has considerab;y more experience than any other, and place all ones faith in one report which is produced by the EU, a body which is not known for its independence from political interference.

No one suggests any of this is easy, and none of us should pretend that many of those who are opposed to fracking will be opposed to any consideration of that process whatever the evidence shows.

I am open to fracking, and our views should be based not on anecdote, speculation or youtube videos, but on the best evidence produced, and common sense.

meenaghman

ShanePouch wrote: »

It’s true that gas prices in Europe are high, although costs in the USA are considerable lower thanks to fracking, according to an article in Forbes and another in The Economist.

Shale Gas only makes sense, if its abundant and easy to get out of the ground. The Gas In Place calculations on Shale gas have been revised this year - India down 90%, Poland down 85% and US Marcellus down 80%.
Similarly the amount of gas a well can produce has been downgraded by the USGS recently (bearing no relation to what the producers are saying). We have to be very careful to cost this correctly, otherwise what is the point ?
It would seem the glut in gas in the US was caused by drilling more wells, rather than finding an abundant supply source. As the wells deplete, and with focus on the next bubble in fracking for oil, gas supply will fall and gas prices are going to rise significantly in the US.

While cost of the fuel source is important, other costs of producing energy have to be taken into consideration. Such costs as energy plant commissioning costs, operation and maintenance costs, and the costs of decommissioning energy plants have to be taken into consideration.

Yes in some ways this argument is true. But if we're going towards a renewables future why put huge investment into gas powered stations with a lifetime of 25 years ? The EROI of Shale Gas is poor compared to PV and Wind.


Additionally, what is called “energy security” also has to be taken into account.

Energy security or Energy independence. Energy Security can be maintained by having commercial contracts in place. Energy Independence is not feasible for Ireland using shale gas - Even Tamboran admit that.

http://www.forbes.com/sites/jamesconca/2012/06/24/actual-energy-costs-are-driving-us-towards-a-natural-gas-nation/

According to Forbes and The Economist, the cheapest form of energy taking all these issues into account is from gas, and in the USA fracking has contributed to lowering the price of gas available.

The collapse in the price of gas happens because of the difference in the gas market in the US and Europe. But beware, companies are in the process of taking huge impairment charges, and are facing investigations by the SEC. The banks are in for the kill, with Mergers and Assets... probably the biggest indicator for me of the bubble in Shale, is the sell off, or Joint Venturing of Barnett assets. This was supposed to be the economic powerhouse for next 20-30 years. Now you don't sell off an asset that's going to produce for 20-30 years??
Is this a gas industry, or is it a land grab ? Chesapeake makes more from flipping leases than from selling gas.

http://www.economist.com/blogs/schumpeter/2012/05/americas-falling-carbon-dioxide-emissions

Yes and on the other side of the fence are
a) Americas increasing Methane Emissions which is a more potent GHG
b) Americas increasing air pollution in areas where drilling is taking place (eg Barnett Shale)
c) America has decided to allow fracking to go ahead in Iowa - the bread basket of the US and the world.


The price of whatever fuel is used to produce energy becomes less relevant when the fuel sources are restricted, cut off or made increasingly expensive, and it seems relevant to consider whether any country wants to be more dependent than is necessary on foreign sources of fuel.

Yes All food is going to go up in price and become more expensive. We cannot continue to burn fossil fuel because we will reach tipping point. Ironically Leitrim produces more energy than is consumed, while Fermanagh is also near balance with wind production. Take into account the Ballyshannon Hydro on the Erne and the region is self sufficient. Fossil Fuels have received bilions in subsidies throughout the years, and continue to do so (how much subvention on gas pipelines?). We have to look to be creative. The environmental and public health costs of fracking are too significant to ignore, along with the now accepted shortened well life.

No form of fuel is perfect, and all are expensive, (even the costs for Hydro are expensive), and it seems foolhardy to ignore the actual experience from abroad from a country which has considerab;y more experience than any other, and place all ones faith in one report which is produced by the EU, a body which is not known for its independence from political interference.

We have yet to see a full economic cycle or a full environmental cycle for shale gas and the more we see of it, the less the Shale Gas makes sense. I could re-phrase your question to say, who are you going to believe - the industry (who have consistently over stated their reserves , the employment the industry would give, and who changed regulation because of the damaging effects of the industry -(clean water/air act change in US), or the EU ) Finally just because something works in US, doesn't mean it will work in EU..perhaps the EU should be arbiter of that.

No one suggests any of this is easy, and none of us should pretend that many of those who are opposed to fracking will be opposed to any consideration of that process whatever the evidence shows.

Yes. I have watched the Gas companies come and go in the region. I thought initially great.. this might be the time the gas gets taken out. Then I read about fracking. Stand anywhere in the fracking zone and have 100 gas wells in one Km radius. That's a major public health issue. It hasn't been dealt with yet.

I am open to fracking, and our views should be based not on anecdote, speculation or youtube videos, but on the best evidence produced, and common sense.

I agree. Tamboran's well reports on the cores state that the Carbon Content is Marginal in NW Carboniferous basin. They wish to frack, (that's in their licence application for exploratory wells in Northern Ireland) and their basis is one slide, un referenced and un known source which claims that Carbon content in Old cores is generally lower due to deterioration of the cores. Their business model has suspect costs - particularly after reading the EU report on economics which suggests they should be far higher, while their process model - fracking without chemicals and water recycling is aspirational rather than proven. The licences which were issued aren't I believe legal - as due process wasn't followed - and expect to see more on that in the next while.
You say views shouldn't be based on speculation - but this is a speculative industry. Tamboran's business is speculation and onward flipping of the licence either through asset sell of or Joint Venture. They have even said so themselves.

meenaghman

Perhaps when checking on Energy Indepence and Security of supply, then we should look to Bord Gais...


http://www.bordgais.ie/corporate/index.jsp?p=354&n=365

"Ireland’s imported natural gas supplies are sourced from the North Sea. The possibility of gas supplies to Ireland from these sources being restricted is very remote. "

ShanePouch

meenaghman wrote: »

Perhaps when checking on Energy Indepence and Security of supply, then we should look to Bord Gais...


http://www.bordgais.ie/corporate/index.jsp?p=354&n=365

"Ireland’s imported natural gas supplies are sourced from the North Sea. The possibility of gas supplies to Ireland from these sources being restricted is very remote. "

I am sure we are all concerned that all Irish Gas is sourced from foreign countries which means Ireland is 100% dependent on sources beyond Irelands control for gas, in terms of both supply and price.

Shale gas is heralding a resurgence in American manufacturing as energy costs fall and companies can procure raw materials at a cheaper rate, according to Dow CEO Andrew Liveris.

In the Chemical industry, for example, Shale gas has greatly reduced the input costs in the USA which has led to increased productivity. BASF, the giant German chemical company competing with American giants is now at an 8 point profit disadvantage, because it is paying high prices for oil and gas compared to its American rivals.

This is happening now, and is not speculation or guesswork. Shale gas in the USA is responsible for lowering factory inputs to such a level that the effects on the USA's outputs are leading to a resurgence in manufacturing.

Since the introduction of shale gas, gas prices in the USA have halved. Forgetting the enormous benefits that has brought already to the USA's industry, imagine if your central heating bill this winter could be similarly halved!

China, Germany, France, Britain, Russia, South Africa and others all have immense reserves which promise to provide the world with cheap energy for centuries to come, and they are all going to exploit those reserves.

In Ireland, we will probably benefit anyhow because of the effect this seemingly abundant supply will have on world prices. I suspect even in Ireland will the energy policy of the country coupled with the economic situation lead to a decision to extract as much of this gas as possible.

Macha

The economics of a particular shale project depend greatly on the specifics. It is not possible to simply transfer the American experience over to Europe. Not only does Europe have a more dense population and stricter regulations, the geology of each formation can vary, which also has an impact on the economics of extraction.

The US shale industry has done a good job of promoting the idea that shale alone is the reason why gas prices have dropped. The reality is it's a mix of shale, demand reduction and renewables in the system.

Regardless, any decent cost-benefit analysis would not simply look at the impact on gas prices but the wider impacts. The economies of the parts of Ireland with shale gas potential rely heavily on agriculture and tourism. There are pros and cons that need to be considered, not just the average household's gas bill.

ShanePouch

Macha wrote: »

The economics of a particular shale project depend greatly on the specifics. It is not possible to simply transfer the American experience over to Europe. Not only does Europe have a more dense population and stricter regulations, the geology of each formation can vary, which also has an impact on the economics of extraction.

The US shale industry has done a good job of promoting the idea that shale alone is the reason why gas prices have dropped. The reality is it's a mix of shale, demand reduction and renewables in the system.

Regardless, any decent cost-benefit analysis would not simply look at the impact on gas prices but the wider impacts. The economies of the parts of Ireland with shale gas potential rely heavily on agriculture and tourism. There are pros and cons that need to be considered, not just the average household's gas bill.

The problem is that all the while we are considering the pros and cons of the effects on agriculture and tourism, a decision is delayed.

The more time we take to weigh up the pros and cons (a process which often takes decades in Ireland and is often a euphemism for delaying a decision), the longer the time we all have to pay higher gas bills than necessary, higher electricity bills than necessary and the more Irish industry has to pay more for its inputs of energy, making it less competitive to those countries who have made a decision.

Ireland has all the time in the world to delay making a decision, and for every day it does so that’s costing every person in Ireland money in the form of higher than necessary energy bills.

We are experiencing a truly astonishing worldwide energy revolution, and while Ireland is in the depths of depression, with mass unemployment and poverty, to put off a decision which could help nearly everyone in the country with significantly lower energy bills, and offer more jobs as manufacturing and industry becomes more competitive, might seem to some, wicked.

Procrastination is not an energy policy.

NewVision

ShanePouch wrote: »

The problem is that all the while we are considering the pros and cons of the effects on agriculture and tourism, a decision is delayed.

The more time we take to weigh up the pros and cons (a process which often takes decades in Ireland and is often a euphemism for delaying a decision), the longer the time we all have to pay higher gas bills than necessary, higher electricity bills than necessary and the more Irish industry has to pay more for its inputs of energy, making it less competitive to those countries who have made a decision.

Ireland has all the time in the world to delay making a decision, and for every day it does so that’s costing every person in Ireland money in the form of higher than necessary energy bills.

We are experiencing a truly astonishing worldwide energy revolution, and while Ireland is in the depths of depression, with mass unemployment and poverty, to put off a decision which could help nearly everyone in the country with significantly lower energy bills, and offer more jobs as manufacturing and industry becomes more competitive, might seem to some, wicked.

Procrastination is not an energy policy.

What do you mean? Drill first and then deal with the consequences?

A study of the European Parliament comes to the following conclusion:

"Even an aggressive development of gas shales in Europe could only contribute to the European gas supplies at one-digit percentage share at best. It will not reverse the continuing trend of declining domestic production and rising import dependency. Its influence on the European greenhouse gas emissions will remain small if not negligible, or could even be negative if other more promising projects are skipped due to wrong incentives and signals."

So, fracking will have not really an impact on domestic gas prices. The reasons for that shale gas hype and the low gas prices in the US have other reasons.

=> Fracking - A Boom and Bust

NewVision

Global Frackdown Day - 22 September 2012

meenaghman

ShanePouch wrote: »

The problem is that all the while we are considering the pros and cons of the effects on agriculture and tourism, a decision is delayed.

The more time we take to weigh up the pros and cons (a process which often takes decades in Ireland and is often a euphemism for delaying a decision), the longer the time we all have to pay higher gas bills than necessary, higher electricity bills than necessary and the more Irish industry has to pay more for its inputs of energy, making it less competitive to those countries who have made a decision.

Ireland has all the time in the world to delay making a decision, and for every day it does so that’s costing every person in Ireland money in the form of higher than necessary energy bills.

We are experiencing a truly astonishing worldwide energy revolution, and while Ireland is in the depths of depression, with mass unemployment and poverty, to put off a decision which could help nearly everyone in the country with significantly lower energy bills, and offer more jobs as manufacturing and industry becomes more competitive, might seem to some, wicked.

Procrastination is not an energy policy.

Shane, sorry to disappoint you on the lower energy costs, but the current price of gas on the NBP in UK is $10/mcf and Tamboran's business model (which looks to have overestimated gas and underestimated costs) is based on selling gas at $11/mcf.
The current energy prices in the US are unsustainable. The selling of gas below the cost of production has seen companies effectively in default. eg I understand that even though interest rates in the US are effectively zero, that Chesapeake can't access refinancing for less than 10%.
http://blogs.wsj.com/cfo/2012/05/15/chesapeake-pays-steep-price-for-liquidity/
If Chesapeake goes into chapter11 who do you think will act as underwriter of last resort for clean up and other obligations.
The days of cheap energy are over..there's a reason Shale gas is called 'unconventional'. Shale Gas requires high energy prices to make it sustainable. We wouldn't be pursuing unconventional fossil fuel unless all the easy to get at stuff was gone.

ShanePouch

NewVision wrote: »

What do you mean? Drill first and then deal with the consequences?

A study of the European Parliament comes to the following conclusion:
"Even an aggressive development of gas shales in Europe could only contribute to the European gas supplies at one-digit percentage share at best. It will not reverse the continuing trend of declining domestic production and rising import dependency. Its influence on the European greenhouse gas emissions will remain small if not negligible, or could even be negative if other more promising projects are skipped due to wrong incentives and signals."
So, fracking will have not really an impact on domestic gas prices. The reasons for that shale gas hype and the low gas prices in the US have other reasons.

=> Fracking - A Boom and Bust

As in most markets an increased supply leads to lower prices, then yes drill and deal with the consequent lower prices of gas for everyone.

The geologists tell us there are huge reserves of shale gas in the world. Enough to last centuries. Even if you disagree and think it might be a boom and bust, does that mean we should just ignore the gas that is there, because it may turn out to be a Boom and Bust?

Is your judgment that in the one country in the world which is most advanced with fracking, the USA that the price of gas has not halved since fracking began? Shale gas is not “hype”, it’s real gas, used to power real industries and real homes, and the halving of the price in the USA is not “hype” either, but reality.

meenaghman wrote: »

Shane, sorry to disappoint you on the lower energy costs, but the current price of gas on the NBP in UK is $10/mcf and Tamboran's business model (which looks to have overestimated gas and underestimated costs) is based on selling gas at $11/mcf.
The current energy prices in the US are unsustainable. The selling of gas below the cost of production has seen companies effectively in default. eg I understand that even though interest rates in the US are effectively zero, that Chesapeake can't access refinancing for less than 10%.
http://blogs.wsj.com/cfo/2012/05/15/chesapeake-pays-steep-price-for-liquidity/
If Chesapeake goes into chapter11 who do you think will act as underwriter of last resort for clean up and other obligations.
The days of cheap energy are over..there's a reason Shale gas is called 'unconventional'. Shale Gas requires high energy prices to make it sustainable. We wouldn't be pursuing unconventional fossil fuel unless all the easy to get at stuff was gone.

It doesn’t disappoint me at all, and if Tamboran go bust as a result of a poor business plan, they are a private company and that’s their issue. New technology has always had a learning curve, and if the gains of a plentiful supply of gas come at a price of some private companies going bust, then so be it.

Progress is never easy and if we look at the beginnings of any major industry, you’ll see progress was always difficult, harsh, and often even cost lives, but the ultimate benefits were worth it. Coal, airlines, railways, chemicals, electricity, cancer treatments….all have had enormous costs, and if someone had said at the outset “railways are unconventional” and called a halt, what a mistake that would have been.

If Chesapeak goes bust, by law they have to have insurance against the outcome you mention, so ultimately it will be reinsured through numerous insurance companies and Lloyds of London.

Currently, in Ireland we pay for Oil in $’s and for gas, from the north sea, in £’s. As the € is declining as a currency, that means we have to keep paying every more for oil and gas even if their price does not increase. That’s one reason why gas is more expensive that it might otherwise be.

If you are right and the price of shale gas is higher, no one will be forced to buy a more expensive supply of gas, and north sea gas will still be available!

Maybe the price of gas in the USA is “unsustainable”. Who knows. Maybe the price will reduce ever further as the new, cheaper and better technologies for extracting shale gas are discovered. Maybe not.

But to turn our backs on a reliable source of energy, which we pay for in Euro and which may be less expensive than other forms of energy, and which is produced here in Ireland, seems foolish. Even if it costs the same as gas from the north sea, then the benefit from employment in Ireland will be worth it.

No one is asking you to take any financial risk, or burden, or even have anything to do with any company who decides to do this, and yet you seem opposed to anyone even trying to get any benefits, such as increased employment, greater energy security, less risk of currency fluctuations and paying for energy in €, and lower energy prices for all.

Macha

ShanePouch wrote: »

The problem is that all the while we are considering the pros and cons of the effects on agriculture and tourism, a decision is delayed. .

As it should be. Rushing head-long into decisions when we have very little understanding of the implications is no way to run a national energy policy.

ShanePouch wrote: »

The more time we take to weigh up the pros and cons (a process which often takes decades in Ireland and is often a euphemism for delaying a decision), the longer the time we all have to pay higher gas bills than necessary, higher electricity bills than necessary and the more Irish industry has to pay more for its inputs of energy, making it less competitive to those countries who have made a decision.

You haven't even proved that this exploration will result in lower gas bills. As for decisions in other countries, so far this week France, Austria and the Czech Republic have announced moratoriums or bans.

ShanePouch wrote: »

Ireland has all the time in the world to delay making a decision, and for every day it does so that’s costing every person in Ireland money in the form of higher than necessary energy bills.

You haven't provided any evidence to back up this assertion.

ShanePouch wrote: »

We are experiencing a truly astonishing worldwide energy revolution, and while Ireland is in the depths of depression, with mass unemployment and poverty, to put off a decision which could help nearly everyone in the country with significantly lower energy bills, and offer more jobs as manufacturing and industry becomes more competitive, might seem to some, wicked.

The only astonishing worldwide energy revolution I'm seeing is the build-out of renewables. The European Commission's report clearly shows that shale gas resources are evenly distributed and will not significantly impact on the import dependency of the various regions, including Europe.

I'm still waiting for evidence of all these lovely things that will come as a result of shale exploration in Ireland. Your posts have so far painted it as some sort of panacea to a multitude of problems with very little detail of how.

ShanePouch wrote: »

Procrastination is not an energy policy.

It's not procrastination, it's the correct application of the laws and regulations of this country.

ShanePouch

Macha wrote: »

As it should be. Rushing head-long into decisions when we have very little understanding of the implications is no way to run a national energy policy.

Sure, that’s one point of view. You call it “rushing headlong” and I call it “making progress”.

Progress would never have been made on any issue had the nay sayers got their way. Space travel, medical progress, railways and so on.

If your argument is we most not make any attempt at progress until all the I’s have been dotted, all the t’s crossed, and untile everyone is happy to proceed, then no progress would ever be made.

We have quite a body of evidence now from the USA who has been doing this for some time. They were the country who “rushed headlong” into this, and as a consequence are reaping the rewards. We have an opportunity to learn form their mistakes, take the advances they have made and do some exploratory work here in Ireland.

Te potential benefits can be enormous, but you are right that they might not all be realised. However, that not all the benefits might be realised is not an argument not to try.

Macha wrote: »

You haven't even proved that this exploration will result in lower gas bills. As for decisions in other countries, so far this week France, Austria and the Czech Republic have announced moratoriums or bans.


You haven't provided any evidence to back up this assertion.

North Sea gas wil not go away, and anyone who wants to remain paying their prices can do so. Just because we explore the possibilities of shale gas (and by “we” I mean private companies which will not cost us anything). If those private companier are right, then they can offer us all gas as a cheaper price, and if not we can keep buyig North Sea Gas in sterling.

Macha wrote: »

The only astonishing worldwide energy revolution I'm seeing is the build-out of renewables..

It’s not a case of either/or, and why cant we do both? We need a supply of energy for installed capacity in addition to renewables.

I applaud and encourage both renewables and the cheapest and best source of energy to the back up to the renewables.

I am more than a little perplexed that you seem opposed to exploring Irelands ability to have its own source of energy, and seem to prefer to want to be 100% reliant instead on a foreign source of energy paid for in an increasingly expensive foreign currency. To say nothing of the Irish jobs which might be created, many of the high value jobs .

Macha wrote: »

I'm still waiting for evidence of all these lovely things that will come as a result of shale exploration in Ireland. Your posts have so far painted it as some sort of panacea to a multitude of problems with very little detail of how.


It's not procrastination, it's the correct application of the laws and regulations of this country.

And if you get your way you will be waiting for ever as the only evidence will come from application.

To claim I regard shale gas as a panacea to a multitude of problems is simplistic and misleading, and misrepresents my arguments.

I have stated simply that shale gas is:

1. Plentiful

2. Can be produced in Ireland

3. Can create jobs for irish people

4. Can be a substitute for imports

5. Will be paid for in €

6. Is a proven technology in the USA from which we can learn.

7. Can be explored at no cost to the irish State

8. Can generate much needed revenue for the Irish state

9. Can reduce energy bills for all

All the above are potential benefits to Ireland and to the Irish people.

Even if it doesn’t reduce energy bills for us all (I think it will, you disagree) it certainly is not going to increase energy bills as North Sea gas will not disappear as an option, and there is no cost to finding out.

For some reason, you seem implacably opposed to finding out, and seem instead to continue to prefer to rely on foreign & expensive gas and oil.

Macha

ShanePouch wrote: »

Sure, that’s one point of view. You call it “rushing headlong” and I call it “making progress”.

Progress would never have been made on any issue had the nay sayers got their way. Space travel, medical progress, railways and so on.

Sorry, but we're not talking about space travel. We're talking about the highly risky extraction of hydrocarbons.

ShanePouch wrote: »

If your argument is we most not make any attempt at progress until all the I’s have been dotted, all the t’s crossed, and untile everyone is happy to proceed, then no progress would ever be made.

A misrepresentation of what I said. I said the proper assessments need to be carried out. And if the proper assessments indicate that fracking shouldn't take place, then it shouldn't take place.

ShanePouch wrote: »

We have quite a body of evidence now from the USA who has been doing this for some time. They were the country who “rushed headlong” into this, and as a consequence are reaping the rewards. We have an opportunity to learn form their mistakes, take the advances they have made and do some exploratory work here in Ireland.

Te potential benefits can be enormous, but you are right that they might not all be realised. However, that not all the benefits might be realised is not an argument not to try.

We have quite a body of myths from the US. The idea that shale gas alone has brought down the gas price is incorrect. It has, instead, been a mix of demand management, renewables, a low carbon price in the EU and shale gas.

The other thing we have a body of is the evidence of serious problems. Try reading the Commission report I referred to earlier. They identify 8 high risk areas of environmental impacts, including water use, water contamination, and releases to air. There's no point talking about the benefits without considering the costs.

ShanePouch wrote: »

North Sea gas wil not go away, and anyone who wants to remain paying their prices can do so. Just because we explore the possibilities of shale gas (and by “we” I mean private companies which will not cost us anything). If those private companier are right, then they can offer us all gas as a cheaper price, and if not we can keep buyig North Sea Gas in sterling.

Not cost us a thing? Why do you keep ignoring the potentially very costly external impacts of such activities?

ShanePouch wrote: »

It’s not a case of either/or, and why cant we do both? We need a supply of energy for installed capacity in addition to renewables.

I applaud and encourage both renewables and the cheapest and best source of energy to the back up to the renewables.

The world has sufficient proven reserves of conventional gas to carry out the transition to a low carbon energy system. Gas is not a destination fuel.

ShanePouch wrote: »

I am more than a little perplexed that you seem opposed to exploring Irelands ability to have its own source of energy, and seem to prefer to want to be 100% reliant instead on a foreign source of energy paid for in an increasingly expensive foreign currency. To say nothing of the Irish jobs which might be created, many of the high value jobs .

I just don't know where you're getting this from..

ShanePouch wrote: »

And if you get your way you will be waiting for ever as the only evidence will come from application.

With this logic we would never so no to anything. Which is a completely illogical position to have.

ShanePouch wrote: »

To claim I regard shale gas as a panacea to a multitude of problems is simplistic and misleading, and misrepresents my arguments.

And yet you go onto list 9 fantastic results - none of which you back up. And no discussion of the negative impacts.

Is it that you just don't believe there are any negative impacts? I'm struggling to understand your position.

ShanePouch wrote: »

Even if it doesn’t reduce energy bills for us all (I think it will, you disagree) it certainly is not going to increase energy bills as North Sea gas will not disappear as an option, and there is no cost to finding out.

Did you read the economics paper? Please. Read it. Shale gas is called unconventional gas for a reason. It is not conventional gas. It does not operate under the same economics. The costs are not directly comparable to conventional gas. Notwithstanding the increased exploration and operation costs of shale, an IEA report identified additional costs of at least 7% to ensure minimal environmental and social impacts. That means shale gas will be at least 10% more expensive than conventional natural gas.

ShanePouch wrote: »

For some reason, you seem implacably opposed to finding out, and seem instead to continue to prefer to rely on foreign & expensive gas and oil.

Finding out? I don't believe we live in a society where we have to blow things up to understand how they work. I'd rather have an analysis and if the results say 'better not to do this', I like to follow those results.

As for the unfounded and strange accusation that I prefer Ireland to rely on foreign & expensive gas and oil: I don't actually. I prefer us to develop our renewables potential. At the same time, I don't support the production of shale gas in Ireland, particularly without any sort of impact assessment. And those two opinions are not incompatible.

meenaghman

I have stated simply that shale gas is:

1. Plentiful

I'm presuming you mean in Ireland. There's no economically proven Shale repository in Ireland.

2. Can be produced in Ireland

If it exists can it be done economically and in an environmentally sound manner with no public health impacts. Given health impacts will take 20 years to be evident the precautionary principle must apply

3. Can create jobs for irish people

Some but many will be non-Irish as we don't have the skill set

4. Can be a substitute for imports

Only some imports and only if economic

5. Will be paid for in €

But low Euro will also attract Tourism and would make agricultural exports cheaper. Shale gas would threaten both of those industries. Also most of costs in shale gas are foreign as patents and infrastructure and equipment is US or GB made. Diesel fuel is a significant cost in Shale gas.

6. Is a proven technology in the USA from which we can learn.

Yes but see above for Patents equipment etc.. We're a sales channel.

7. Can be explored at no cost to the irish State

Not true. Government officials will have to regulate the exploration. There will be lots of costs where the state will facilitate exploration. Those are costs which the state will bear.

8. Can generate much needed revenue for the Irish state

Only if proven economic and could potentially cost the irish state more. Eg fines with regards to not meeting air quality, emissions and other targets. The State gets fined, but rarely passes these on individual companies. The state can only fine an individual company if it can prove it was breaking terms of a licence. The cumulative effect of Shale Gas production will most likely mean Ireland breaking emission targets.

9. Can reduce energy bills for all

No. The easy to get at Gas is gone. It will not reduce energy bills. I've already explained why.
The Energy input has been calculated at the equivalent of 3.5 Kiloton nuclear bomb / square mile for Tamborans plans. The EROI of Shale is lower than that of renewables and of conventional gas. It cannot be cheaper.
My nuclear calculations came from here : http://frack-off.org.uk/fracking-nukes-counting-the-kilotons/
using 12000 psi, 2million us gals of water, 24 wells/pad which drain 1sq Mile (640 acres) of Shale/sandstone at 3 different levels. 120-375 pads would mean 420Ktons-1300ktons or 26-82 Hiroshima explosions energy equivalence.

NewVision

ShanePouch.

Here is your "most advanced" fracking nation

=> https://vimeo.com/38843993

Also => https://sites.google.com/site/frackingireland/

Here our "2.2 trillion cubic feet"





It's beyond being a joke.

=> Fracking - A Boom and Bust

Capt'n Midnight

ShanePouch wrote: »

Since the introduction of shale gas, gas prices in the USA have halved. Forgetting the enormous benefits that has brought already to the USA's industry, imagine if your central heating bill this winter could be similarly halved!

Two other casualties are Nuclear power and New Coal technologies
From the Wall Street Journal

The U.S. nuclear industry seemed to be staging a comeback several years ago, with 15 power companies proposing as many as 29 new reactors. Today, only two projects are moving off the drawing board.

What killed the revival wasn't last year's nuclear accident in Japan, nor was it a soft economy that dented demand for electricity. Rather, a shale-gas boom flooded the U.S. market with cheap natural gas, offering utilities a cheaper, less risky alternative to nuclear technology.

"It's killed off new coal and now it's killing off new nuclear," says David Crane, chief executive of NRG Energy Inc., a ...

NewVision

ShanePouch wrote: »

I have stated simply that shale gas is:

1. Plentiful

Myth => Fracking - A Boom and Bust

2. Can be produced in Ireland

So what? We have to buy it for the international market prices

3. Can create jobs for irish people

Very few of them. But... One in five kilograms of baby milk powder sold on earth is coming from Ireland. Dairy products are one of our main exports. If Ireland is losing its reputation for its healthy farming, healthy cows eating proper grass from clean fields, we are putting into jeopardy tens of thousands of jobs. Farmers, and involved companies like Pfizer, are very concerned about hydraulic shale gas fracturing in Ireland.

4. Can be a substitute for imports

Insignificant. About 1% of our demand => Fracking - A Boom and Bust

5. Will be paid for in €

So what?

6. Is a proven technology in the USA from which we can learn.

Yeah! We can see that here.

7. Can be explored at no cost to the irish State

And no benefits either. The problem is, when there will be a major contamination Tamboran wouldn't have the money to repair that damage, or they will just be vanished.

Here some expenses of the Irish people.

8. Can generate much needed revenue for the Irish state

The same "revenue" as in the Corrib Gas Fields? Where Shell can write off expenses for many years, even expenses not made in the country/

9. Can reduce energy bills for all

Myth. => Fracking - A Boom and Bust

All the above are potential benefits to Ireland and to the Irish people.

Nope. I can only see problems

BTW. The carbon footprint of shale gas can be worse than coal. It is not a "clean bridge fuel" as the industry is trying to sell us. In fact, it is a dirty delaying fuel, delaying investments into clean renewable energy sources.


The Cornell Team Redux: Shale Gas a Disaster for Climate
Methane and the greenhouse-gas footprint of natural gas from shale formations
Howarth Response)

Similar findings by by scientists from NOAA and the University of Colorado. Air sampling reveals high emissions from gas field. Compare to other claims of the industry, about 4% of the gas is lost to the atmosphere.

NewVision

More fracking news:

Friends of the Earth have published a paper => Unconventional and unwanted: the case against shale gas

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MEPs divided on whether EU should regulate shale gas

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France Renews Bans on GMOs, Natural Gas Fracking, Shifts Toward Renewables

SustainableBusiness.com News

The new Socialist government in France is taking a strong stance on environmental protection.

Not only has it renewed the 2008 ban on genetically modified crops (GMOs) despite pressure to drop it from the EU, it has put its foot down (again) against fracking, and is committed to reducing dependence on nuclear power in favor of renewable energy.

...

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Hunt launched after Halliburton loses radioactive rod in Texas desert

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US: The Trillion-Gallon Loophole: Lax Rules for Drillers that Inject Pollutants Into the Earth (Pro Publica)

That's what we really don't want in Europe, do we?