Discussion > Shale Gas Profits
What a waste! Picture from space reveals how new U.S. oil field is burning off enough gas to power Chicago AND Washington - because it's cheaper than selling it.
http://www.dailymail.co.uk/news/article-2269517/The-picture-space-shows-U-S-oil-field-burning-gas-power-Chicago-AND-Washington-cheaper-selling-it.html
This incredible picture from space shows how the U.S. oil industry has boomed to such an extent that a gas field now burns as brightly as a major city.
The rapid increase in shale oil production means it is now often more economical to 'flare off' unwanted gas than to sell it.
As a result, one field in North Dakota, the state leading the energy revolution, is now burning off enough gas to power all the homes in Chicago and Washington D.C. combined.
replicant
Redacted
Dung
2: to select or adapt (as by obscuring or removing sensitive information) for publication or release; broadly : edit
3: to obscure or remove (text) from a document prior to publication or release
censorship
replicant
At least that's what redacted means.
replicant
Replicant
You have now been talking to yourself for 4 days, this is an amazing feat even for a brainless troll, I do hope you receive a reward from the mother ship ^.^
Dung
Oh is that what I have been doing? Well, I guess one hackneyed insult deserves another. Watch you don't cut yourself now on that sharp acerbic wit now.
http://thetyee.ca/News/2010/09/17/AthabascaDeformedFish/
"Top water ecologist cites evidence of extreme pollution near oil sands.
At the University of Alberta in a room packed with nearly 100 reporters and onlookers, David Schindler, one of the world's most celebrated water ecologists, explained that he had never seen so many deformed fish from one region in his long career as a freshwater scientist except on polluted rivers feeding the Great Lakes nearly 30 years ago.
However, both Ottawa and the Alberta government, which are dependent on oil sand taxes and royalties, claim that all the pollution in the river is naturally occurring based on proprietary data collected by an industry-funded group.
And now of course you can't dismiss a report from the government just because it is written by those wizards from the oil industry. I mean, if one thing is certain, they know their water quality issues and wouldn't hesitate to pull the plug if they found anything untoward. Wouldn't you agree with that braniac?
replicant
riceplant - you are wasting your time here. Nobody here is interested in your obsessions - we simply skip over your rantings.
Martin A
Well you know, I was hoping on getting some scientific insight from people who are familiar with studies that are chemical in nature. Who are used to reading factual scientific reports and can evaluate them properly. So far though all I have been getting are childish insult. No studies or evaluations or even intelligent retorts. Oh well, my bad.
replicant
Better luck elsewhere. Bye.
Martin A
Just a brief update on this:
The spot price for natural gas (which is currently mostly shale gas) in the USA as given by Henry Hub, has been slowly rising. The rise is possibly due to the approaching availability of the first US LNG export terminal. As reported earlier in this thread, the break even price for shale gas production is around $4.00 (per Million British Thermal Units) and the current price is $4.25 so all producers should now be profitable.
Dung
This news article on Platts gives a little insight into the realities of the shale business today:
http://www.platts.com/latest-news/natural-gas/washington/new-ohio-shale-gas-well-results-show-utica-fairway-21223081
An excerpt confirms where things now stand in terms of drilling performance, multi-well pads and direct connection to supply: " Houston-based Magnum Hunter said its first dry gas well off the Stalder #3 pad was placed into production this week with a peak rate of 32,500 Mcf/d. The pad could eventually hold 18 wells, Magnum Hunter said.
Analysts at energy investment bank Tudor Pickering Holt on Friday crowed about the "huge" well.
"Well still cleaning up frack water and company believes sales rate will likely increase over the next few days. Stalder #3 drilled to a vertical depth of roughly 10,600 feet with a 5,000 feet lateral fracked with 20 stages," TPH said. "
As for the economics: " TPH estimated the Stalder #3 will break even at gas prices of $2.50/Mcf."
mikeh
mikeh
Brilliant bit of info! My figure of $4.00 break even price was an under grad thesis (US based) of a figure across all wells both old and new, $2.50 is fantastic ^.^.
There is no reason why break even for Cuadrilla wells should be any higher.
I dont know if anyone spotted an article about the founder of Cuadrilla who now has 3 licences to drill for SHALE gas in the Irish Sea? These would be the first off shore wells and since the estimates are that there is about ten times as much gas offshore, we are now firmly into "thousands of years of shale gas" territory hehe.
Dung
Dung; there's a lot of good info on the Platts site. News items often get right into the nitty-gritty of what's happening out in the field.
Another interesting comment was the one about the rigs being prioritised towards oil and liquids so much of the increase in gas output is a "by-product"!
In my - layman's - view, UK shale may have some cost advantages compared to the US. The thickness of the shale means that wells could be drilled at different depths from one pad. Utilities are likely to be close-by. Ditto connections into the gas grid. We already have a couple of refineries which take NGLs. There is plenty of under-utilised gas-fired power plant.
We just need to get fracking...
mikeh
mikeh
I agree with everything you say mate and I have been getting a daily bulletin from Platts for a long time just didnt read all of them :(. I have been fighting a battle on BH for years because the Bish was accepting government figures for our potential gas reserves when it was obvious we had a great deal more. As you rightly point out the thickness of the shale at least in the Bowland basin is currently unique in the world and Cuadrilla stopped drilling before they hit the bottom. Literally nobody knows just how thick it is, it could even be thicker than Lord Deben hehe.
On the actually USAGE of gas in the UK then it will not happen until the government stops giving priority to renewables because at the moment gas does not pay the operators of the gas plants due to the stop start usage.
Dung
Meanwhile the outlook for the US just keeps on getting better, as reported on No Hot Air:
"Adam Sieminksi of the US Energy Information Administration showed in the video that the previous high reference case for natural gas is the new base case at 16:35 here he talks of a figure that is absolutely stunning: 100 BCF per day by 2040 or over 1000 BCM by 2040, compared to a total EU consumption of 500BCM today, or 700BCM for the US.
If that wasn’t high enough, a presentation by Encana and IHS said that“unconventionals have the potential to account for up to 10 times the conventional recoverable resource”
These are absolutely stunning numbers, so large as to be almost inconceivable. An ultimate recoverable resource of over 10,000 TCF is 400 years of current US gas demand and 4000 years of UK demand, yet these are numbers given at high government levels in the same forum as the Energy Information Administration and US Energy Department. These are not the numbers that UK officials say are those of shale advocates who are as unscientific as green opponents.These figures must be put in perspective that the entire planet produced 117 TCF in 2012: Thus the United States alone has enough gas to power the planet for 85 years."
mikeh
Dung; may I suggest we broaden this thread to cover all shale-related issues? (as has already happened a bit).
You probably know the "Frackland" website? The latest post there includes a map of shale wells in a suburb of Dallas Fort Worth.
It is interesting to bring the same area up on the satellite view of Google Maps. It is quite easy to spot the shale sites.
I was rather surprised by how close together some are.
After some digging, I think it is down to several factors. This was one of the first major shale plays so each site did not have many wells (looks like 4 or 5 is the norm) and lateral drilling did not have the reach it has today. Also it is not always possible for the driller to get full lease coverage so the area accessed from each site can be sub-optimal.
Even so the sites do not seem any more intrusive than, say, a large farmyard.
With regard to local impact, I have just been reading about the expansion of lignite mining in Germany and the Czech state. Whole villages face demolition and the landscape is torn up for miles around. Yet Germany does not want to allow shale exploration....insane.
mikeh
Mikeh
First questions of the broader discussion.
How will the Ukraine crisis affect the 15% of gas we import from Russia via their pipeline?
If it stops, how well will we cope?
Entropic man
mikeh
"With regard to local impact, I have just been reading about the expansion of lignite mining in Germany and the Czech state. Whole villages face demolition and the landscape is torn up for miles around. Yet Germany does not want to allow shale exploration....insane."
Unbelievable logic. There should be university courses and PHDs awarded for studies in logic shown here. Here we have two cases of tremendous destruction. But it is considered insane to try to stop further destruction. "Whole villages face demolition..." What a stupid idea to try to halt further destruction. Well that's just ludicrous. I can't for the life of me understand why we can't destroy everything. We're starting to run out of places to destroy the surface because of all the people, but we have a good beginning on destroying ground water that isn't already being poisoned by chemical surface runoff. Nothing succeeds like excess I always say.
replicant
EM; your guess is as good as mine!
If Russia squeezes supply the whole of Europe will be scrabbling to make up the shortfall. Maybe some producers could boost their output. We could import more LNG - and pay highly for the privilege, no doubt.
I posted on another thread that, afaik, we have by far the lowest gas storage capacity of the major European consumers. It was only a few months ago that the government pulled the plug on the Rough project which would have given us at least some back-up.
So my guess is that any supply disruption will hit us in the UK quicker and harder than elsewhere - unless our fellow Europeans offer to share their back-up....Another guess is that any disruptions will short and sporadic as Russia's economy would suffer heavily from prolonged shutdowns. Hopefully no-one starts fighting.
No doubt some envious glances will be cast across "the pond" where they can now drill and get gas into distribution within 30 days.
mikeh
Mikeh
You make a good point that Russia has a strong incentive to maintain supply. Now let us hope that some confuaed Ukrainian patriot does not decide to blow up the pipeline!
One thing that may come in the UK is increased subsidies and planning overrides for shale drillers. Security of supply may trump the concerns of unprofitability and environmental damage.
Entropic man
Mikeh
There is an interesting map here.
http://www.zerohedge.com/news/2014-02-20/ukraine-situation-explained-one-map
Entropic man
Mikeh
Totally in agreement with broadening the discussion about shale.
God forbid that Russia and the Ukraine start fighting but if they did and Russia tried to withhold gas supplies, then the stupidity of the coalition would be shown in bright lights.
They sat on shale exploration in the UK for at least 18 months, Cuadrilla would have been producing by now and we could stick two fingers up to Russia.
Dung
"now and we could stick two fingers up to Russia."
Yea? Who could do that? You? The brave English investor of Wall street hype? The British land owner who had his ground water destroyed because of those brave English frackers at Cuadrilla? Or is that the brave English elite who have always demonstrated much care and concern for the British people. Just which crowd of scum do you think that 'we' belong. Oh wait, it must be the new modern intelligentsia led libertarianism that holds peoples property and rights sacrosanct above any mere government rabble. That is unless the elite decide to sell that property to wall street conmen and flakes. Then it's Carry On Up The Khyber. Wot?
replicant
"The British land owner who had his ground water destroyed because of those brave English frackers at Cuadrilla?"
Who was that land owner? Is this another of Replicant's bizarre jokes?
diogenes
http://www.marcellus-shale.us/Marcellus-air-quality.htm
Once gas wells are producing, next come the gas lines, and compressor stations to move the gas. Whether its the adverse effects of one compressor station, or the cumulative effects of many, the town of Dish, Texas has become the poster child for these air quality issues.
One university expert, Al Armendariz, whose SMU study was backed by Texas state officials, has indicated that air pollution created by Barnett Shale gas drilling and production in Texas is equivalent to all the air pollution created by vehicular traffic in the Dallas-Ft Worth metroplex.>/b> Similar reports out of Colorado have shown a link between gas production activities and haze. Health issues follow.