Bishop Hill Shale blithe spirit
Jun 19, 2013 Energy: gas Reality seem finally to be dawning on the Scottish Conservative Party, whose deputy leader Murdo Fraser has suddenly started making positive noises about shale gas.
Shale gas has revolutionised energy markets in the US and has substantially reduced costs for both consumers and industry and I believe it has the potential to do the same for Scotland.
“Nearly 40% of Scottish residents are struggling in fuel poverty. I want to see a proactive Scottish Government approach on shale gas that will give hard up Scots a route out of fuel poverty.
“Recently I have visited several factories in my region, and they are crying out for shale gas in order to level the energy price playing field. Unless the Scottish Government can devise a balanced, fair and affordable energy policy, high energy prices will cost manufacturing jobs.
“The potential for offshore shale gas has yet to be explored and I would recommend that the Scottish Government follow DECC’s recommendations and use the existing North Sea infrastructure to tap into this resource.
Murdo is the deputy leader, so this should be seen as a significant statement of intent.
Reader Comments (34)
It's a shame he didn't take the opportunity to castigate the Scottish Government for its ludicrous energy policy based on 100% renewables (wind) by 2020, I recall.
"Nearly 40% of Scottish residents are struggling in fuel poverty"
And why would that be, I wonder..?
"a proactive Scottish Government approach on shale gas that will give hard up Scots a route out of fuel poverty ..." - I think it was Lord Redesdale, in yesterday's H of L debate on the Energy Bill, who said that shale gas, even if it can be exploited, has a maximum life of SEVEN years, not 100+ as recently postulated. He also claimed big differences in UK/USA geology were a factor. He declared interests in energy-related industry, so is more likely to be talking sense that the previous speaker, Lord (I got it for Pauline) Prescott.
I worry for employment in Scotland. If the Scottish leaders continue with their obsession for renewables they will lose what manufacturing they’ve got. As RBS as their flagship, who’s going to set up banks there? If they get independence will they lose a lot of English tourism… well those who haven’t been driven away by the sight or the windmills?
A lot of Scottish people feel that with sole ownership of their oil fields they will manage very well without the rest of the UK. Given the renewables policy, isn't this attitude peverse?
With the G8 countires trying to clamp down on tax avoiders they can't even become a tax haven.
I would hesitate to take Lord Redesdale as any better authority on shale gas than TwoJags.
Only one way to find out, stop PotatoEd DaveyLump prevaricating and procrastinating and start drilling.
(I suppose there is another way to find out, take a cue from Harry Hill......)
...I would hesitate to take Lord Redesdale as any better authority on shale gas than TwoJags....
This isn't about 'reality dawning' or 'being a better authority'. This is about politics.
When the little political cliques meet in the smoke-filled rooms, they are well aware that Global Warming isn't happening, that windmills would be a disaster, that the bottom has fallen out of AGW, etc. But these are NOT primary issues. Politics, popularity, and playing your policies against the opposition are the key drivers.
For instance, if a major political party got up and said that AGW was a scam, they would be hammered by their opponents playing the green 'what about the grandchildren?' card. So no one will, even though both sides probably realise that it's a doomed policy which would collapse the country.
You're not dealing with the truth here. You're dealing with people's perceptions. People think funny things - often contradictory, and the job of a politician is to stay on top of that churning miasma for as long as he can. You rarely get to do that by telling it like it is. You have to wait for people to be calling out for shale gas, and hanging windmill owners in the street before it's safe for the politicians to come out against AGW...
Which is why Bishop Hill exists...
Good to see a bit of sense being aired. Scotland also has significant potential for coal seam methane - I think there's a little pilot project running somewhere, pushing a few watts onto the grid.
Meanwhile, over where they take shale seriously, here is what one energy company had to say:
" Southwestern's average drilling time in the Fayetteville Shale play is a little over five days per well, down from 17 days per well a few years ago. Drilling costs have dropped from $3.2 million to about $2.2 to $2.1 million over the last quarter.
"We actually drilled 25 wells in 2 and a half days," he said. "The wells are about 4,000 feet [deep] and the laterals are 4,900 feet [long] on average. That is a significant increase in efficiency."
He said industries that use natural gas are returning to Texas and Louisiana because "the resource base is there and they can contract for long-term supplies," he said.
Because Southwestern's infrastructure is in place in the Fayetteville Shale play, "we can get gas to market within 30 days," he said. "This is just-in-time inventory with 100% certainty. We don't drill dry holes anymore."
That rate of improvement in efficiency is remarkable: 30 days from starting drilling to gas in the pipe. Meanwhile we can hope that Cuadrilla will be through most of the regulatory process by early next year... Sigh.
Could it be anything to do with this?
'After gaining 147 councillors in England and beating the Conservatives into third place in the South Shields by-election, won by Labour on a reduced majority, UKIP has announced a former Liberal Democrat and Green candidate is to become its spokesman on energy issues.
The Eurosceptic party's energy policies are essentially pro-nuclear, anti-renewables and dismissive of global warming theories, accusing the Scottish Government of "zealous implementation of EU diktats" on wind farms...
UKIP's first Scottish spokesman is Mike Haseler, an energy sector researcher from East Dunbartonshire. He was a Liberal Democrat candidate in Watford in the 1990s and stood for the Greens for the Holyrood elections in 2003.
He said: "I left the LibDems as I saw the damage being done to UK industry by the EU. Now, seeing how the Scottish Government's zealous implementation of the EU diktat has caused these bird-mincing wind farms to spring up everywhere, I'm sure we have to leave the EU.
"UKIP is the only party to base its energy policy on real science and almost every other country, except the EU superstate, has realised this global warming non-science is part of an anti-industry, anti-modern life obsession by extremists in society." '
http://www.heraldscotland.com/politics/political-news/ukip-the-scottish-assault.20984852
(Scottish Herald, 5 May 2013)
More joy in heaven over one sinner that repenteth, and all that ...
"...A lot of Scottish people feel that with sole ownership of their oil fields they will manage very well without the rest of the UK. Given the renewables policy, isn't this attitude peverse?.."
Jun 19, 2013 at 8:45 AM | TinyCO2
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I am for Scotish Independance (perhaps I should declare an interest, I am English).
I am not sure that proper consideration has been given to this. First, it is probable that not all fields in the North Sea would be Scotish. They may be sited nearer Scotland, but that does not in itself render them Scotish. My understanding is that one has t project the England/Scotland border into the sea and since this runs in a North East direction, some oil fields will sit is English territorial waters.
Second, whilst I do not know the licensing arrangements, money is made on licensing the fields to the explorers/operators. This has already been done. Unless there is a annual charge, what revenues will be earned until the licenses already granted have expired and have to be renewed, or until there are new oil finds in the area when a new license will be issued.
Third, the oild companies are not Scotish, so Scotland will not receive the corporation tax revenues which the oil companies make on oil extracted. Much of this will continue to be paid to England where these companies are based (some companies are not English and there profits are taxed elsewhere, but not as as I understand matters in Scotland).
Fourth, it follows from the above that unless Scotland is proposing renationalising the oil fields (without payment of compensation or penalty), Scotland may not earn so much money from North Sea Oil. renationalising the oil fields would be a bold step and the oil companies as a whole have more financial muscle than Scotland would have as a nation. It could have serious ramifications.
As I say, I do not know the full position, but I have reason to consider that it is more complex than the nationalists would have one believe.
The difference between the US and the UK is private land ownership. In the US there is considerably less restriction and less red tape as to what a land owner can do on their own land. This has allowed shale field development to continue a pace.
In the UK, it will be bogged down by planning rules and regulations.
Ian_UK
Redesdale cannot possibly know this. He is making stuff up. It is utterly impossible to know anything at all about presence/absence of hydrocarbons, let alone production and life expectancy until there has been an extensive drilling campaign. Geology is inhomogenous. One, or a few holes tell you very little about a basin.
Mike H
That is incredible, about 1/10 of the costs, and 10 times faster than when I was last associated with the game (20 years ago). Do you have a link for this?
"...the Scottish Conservative Party.... deputy leader...made positive noises"
Stop right there. You might as well announce, "The King of the Moon said today....."
Hector P; that quote came from an article on Platts here:
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/21176102
Richard V; another aspect to the Scottish oil situation is the position of the Shetlands. I am long out of date but there used to be a view that they would not be part of a separate Scotland. If so, they would take a lot of oil & gas with them plus the huge facility at Sullom Voe.
I thought Alec Salmond had all the energy that Scotland needed (and with loads over for export to us Sassenachs) sorted out, based on windymills..?
You're surely not going to tell me that its not working as intended..?
This from a representative of the party that presided over the deindustrialisation of Scotland in the 80's. There's a reason they have only one MP left. If Scotland has little manufacturing now then he needn't look that far for the main cause.
And now it seems to be fashionable to worry about manufacturing. Back then they called it "metal bashing industries" that were to be replaced by "high-tech".
Sadly (on this topic at least) Conservatives / Tories / Conservative and Unionist Party are completely unelectable in Scotland.
The only chance is for the UKIP party to be more forceful in Scotland.
The only other alternative for Scotland are Labour / New Labour / Scottish Labour which is a cabal of Neanderthals (put up a monkey or your disgraced MP’s brother-in-law and we will vote for him / it) , Liberals (say no more , nudge nudge) and SNP who have gone way off message and embrace Wind Farms, on land and sea, and the EU (can’t get enough of those German game hunters).
If the Scots vote for independence, Salmond will take them back to the stone-age. Scotland will become an uninhabited wilderness covered with rotting windmills.
Gixxerboy
That depends on what the King of the Moon is saying and whether it is something you want to hear. If the Tories promise cheap, reliable energy while the other parties chitter on about decarbonisation and windmills and renewables — especially after the Scots have told Eck the Fish where to stick his independence — then you might just see a Tory revival that will astound you.The current crop of Tories are a world away from McLetchie and Goldie.
The Scottish tories?
Forgive me if I laugh but Scotland is a one-party state and it ain't the tories.
I have just spent an hour in the presence of that well-known Scot Iain Stewart on BBC2 while he investigated the American experience of fracking. I have to say it was surprisingly balanced.
Well, Horizon's report on fracking was not as bad as I feared. We did get a bit of flaming water attributed to leaking wellbores but there was fair comment that such problems should be easily managed with tight regulation. Likewise, interviews with people who "became ill" were tempered with comments that official investigations by the EPA et al had not found hard scientific evidence.
There was a serious lack of hard numbers for the positive case but there was mention of the benefit to manufacturing and the "reshoring" of jobs. A few choice figures showing the impact on employment in the Dakotas, for example, would have been welcome.
Likewise they could have talked to the local business communities: there are plenty of reports on the web of local traders, restaurants, hotels, etc which have seen business boom. I read one a while back where the manager of a small town bank talked of how his business has exploded and he closed by saying that someone wanting a loan for new barn used to be as exciting as it got.
For the BBC, not bad.
Scales? Eyes?
Murdo Fraser's intelligence is astounding.
What a pity that his party control 16 of 129 seats.
Sure to be a game-changer.
Scotland needs nuclear and coal first. Shale gas only makes sense in core areas of good formations and has been a loser in the non core areas of American formations. We have already seen BHP, Encana, Range, Exco, Chesapeake, and other companies write down shale assets that are not economic. The Scotts should not make the same error.
bravo Vangel
he gets consistency points even for being consistently wrong
check
http://www.cityunslicker.com/2013/06/shale-and-price-of-gas.html
sorry Vangel...everything you say is just ..........
Vangel - do you think nuclear without Gov. as a back stop is really possible? At what price point? And for how long?
http://www.ft.com/cms/s/0/59e88222-c92a-11e2-bb56-00144feab7de.html#axzz2WhgUPF64
MIkeh
So where do the Shetlands go if not to Scotland?
On Monday the Geological Society gave a briefing day on shale gas.
http://www.geolsoc.org.uk/shalegas
"So where do the Shetlands go if not to Scotland?"
Diogenes
They are considering going their own way, via one of several independance options.
http://www.guardian.co.uk/politics/2013/mar/17/scottish-independence-islands-home-rule
Diogenes; my comment was based on chatting with folk in the oil industry some time ago. Their feedback was that some Shetlanders had ideas about going it alone or even forming some sort of loose alliance with Norway - all based around "their" massive oil wealth of course.
That is well out of date, I expect: I will take a look at the link from EM.
I too was pleasantly surprised by the documentary on shale gas last night. I'm not one of Iain Stewart's biggest fans but give credit for a balanced and at times nuanced discussion. I thought the presentation of negative aspects - methane seepage into groundwater and health issues was handled with skill. He was at pains to point out that there is little, or in some cases, no scientific support for some of the claims. As for methane seeps he pointed out these have always existed and in the cases where there is an increased incidence the problems have been associated with poor well casing and not with the fracking per se. He was also very clear about laying to rest the earthquake shibboleth.
Perhaps the most surprising aspect was that he avoided discussion of climate change and the question of using fossil fuels. This from Stewart who presented Earth the climate wars! Is this an implicit statement that he, and perhaps the BBC, are taking a step back from thoughts of impending climate armageddon and are taking a more rational view of the relative importance of energy economics, security and climate change?
Vangel - do you think nuclear without Gov. as a back stop is really possible? At what price point? And for how long?
http://www.ft.com/cms/s/0/59e88222-c92a-11e2-bb56-00144feab7de.html#axzz2WhgUPF64
You don't need government to make a case for nuclear. But you do need a free market system where you don't have massive amounts of useless regulations that drive costs higher and put up barriers for producers.
From what I see wind, solar, shale, biofuels and most other programs that we are pinning our hopes on cannot compete with conventional fuels or nuclear at this time right and are unlikely to be the solutions in the future. The best things that governments and central banks can do is get out of the way but that will not happen in social democratic systems like the US, Canada, or UK.
check
http://www.cityunslicker.com/2013/06/shale-and-price-of-gas.html
You missed the nonsense. We read, "If and when it is produced in fair amounts (say, equivalent to 10-20% of UK demand - a lot less than some predict will flow) it will have the potential to impact on spot-gas prices not only in the UK but in Europe as a whole." Only someone who is totally ignorant of the history of shale development can think that the UK can get 20% of its gas needs from shale formations unless lenders are willing to continue to give loans to producers that can never pay them back.
Haven't you people learned from the US housing scam? UK and EU banks fell all over themselves and bought overpriced AAA rated paper as they reached for yield without much thought. We just saw many foreign energy companies do the same when they overpaid for American shale assets. But just as the foreign banks before them, the foreign energy companies found that they were taken in by hype. This is why BHP and Encana had to write off shale gas assets and why the gas rig count collapsed once the 'Held by Production' lease commitments were fulfilled. I see people eager to parrot every pronouncement made by the EIA without ever questioning its data or its conclusions. Had they bothered to look they would have found a series of errors and unsupported claims that show just how clueless the EIA has been. So why depend on estimates when you have real world data and real SEC filings to tell us what is going on?
I've always wondered about this idea that it's commies and lefties who support the idea of green policies and climate change. If this is true, why is it that the biggest communist states are the biggest polluters and the democratic centre right democracies the main supporters of interventions to reduce carbon emissions?
I'm sorry, how do you reconcile:
"You don't need government to make a case for nuclear. But you do need a free market system where you don't have massive amounts of useless regulations that drive costs higher and put up barriers for producers."
with:
"Only someone who is totally ignorant of the history of shale development can think that the UK can get 20% of its gas needs from shale formations unless lenders are willing to continue to give loans to producers that can never pay them back."
If lenders WANT to give money to shale miners, that's the free market in action. If not, then that's the free market in action.