Fracking for Shale Gas & Shale Oil Worldwide

Transcription

1 Fracking for Shale Gas & Shale Oil Worldwide Vasili Nicoletopoulos Natural Resources GP Hammamet,, Sept 22, '12

2 Occurrences Hammamet, Sept 22, '12 2

3 Unconventional Gas Coal--bed methane [CBM]: Trapped in coal seams, adsorbed in the solid matrix of the coal Tight gas: Trapped in relatively impermeable hard rock, limestone or sandstone, sometimes w/ quantified permeability limits Shale gas: Trapped in fine grained sedimentary rock called shale, which has a characteristic flaky quality Fracking in combination with horizontal drilling access to natural gas reserves previously considered uneconomical, particularly in shale formations Reserve estimates: Uncertainty, differences, revisions some?? in our following slides Hammamet, Sept 22, '12 3

4 Hydraulic Fracturing [Fracking[ Fracking] Well-stimulation process: millions of gallons of chemically treated water & sand pumped into the extremely high pressure to generate fractures or cracks in rocks & release trapped oil, natural gas [conventional or not], geothermal energy, & water Hammamet, Sept 22, '12 4

5 Techniques in Fracking Ceramic Proppants: higher flow capacity than similar sizes of sand, including resin-coated grades, greater strength & thermal stability Foam fracking: uses CO2 foam, rather than water, to create fissures in rock pores up to 20,000X narrower than human hair trapped or tight gas molecules released from rocks Guar gum: key component in mix of sand, water & chemicals used in hydraulic fracturing LPG: waterless, propane-based form of fracking. Uses mixture of propane [& occasionally some butane] pressurized to the consistency of a gel PermStimSM: fracturing service to replace guar-based systems by providing a cleaner, more robust system; more cost-effective treatments & improved well performance Slickwater fracking: to forego guar gum, and use much thinner liquid to transport the proppant. Involves adding chemicals [ friction reducers ] to water to allow for more efficient gas extraction Hammamet, Sept 22, '12 5

6 World Shale Gas Resources Hammamet, Sept 22, '12 6

7 Technically Recoverable SG Resources by Country [EIA] Hammamet, Sept 22, '12 7

8 Recoverable SG Resources in Europe [fm EU] Hammamet, Sept 22, '12 8

9 US Shale Deposits. Hammamet, Sept 22, '12 9

10 . US Shale Deposits 860 trillion cubic feet [cf] of shale gas resources 20 trillion cf of inferred reserves, 56 trillion cf of undiscovered resources estimated by the USGS. Of that amount, 41.4 trillion cf is located in Southern California and 14.6 trillion cf in the Rocky Mountain region but uncertainty, USGS revisions The play average expected ultimate recoveries [EUR] billion cf / well Largest concentrations of shale gas in Northeast region which contains the Marcellus Shale & the Gulf Coast region containing the Haynesville Shale The importance of US service companies Hammamet, Sept 22, '12 10

11 Natural Resources GP Shale Basins in Europe Hammamet, Sept 22, '12 11

12 Shale Gas Projects in Europe US: now >25% shale gas. Russia: Largest NG supplier in Europe Bulgaria: SG, tight gas available, banned shale gas drilling w/ 'fracking' this year France: drilling suspended since Feb 11, Sept 12 Hollande stops 7 projects Germany: Govt should ban fracking near drinking water reservoirs & mineral springs and require developers to conduct EIA, German Environment Ministry report Sep 6, 12 Poland: most favorable market in CE Europe for SG production Turkey: Sept 4 12 Shell started SG exploration in Diyarbakir, SE UK: govt go-ahead May 11 but May 22, 12, shale gas appeal in decline ; offshore [eg N. Sea]: oil price >>$200/barrel Ukraine: US Energy Information Administration estimates ~ 42tn cf shale gas reserves Hammamet, Sept 22, '12 12

13 Shale in China Hammamet, Sept 22, '12 13

14 Shale in China Reserves: uncertainty, revisions 20 shale gas wells have been drilled by Chinese companies Shale oil to reduce dependence on imports U.S.-China Shale Gas Resource Initiative : to promote shale gas investment in China through U.S.-China Oil & Gas Industry Forum, study tours and workshops focused on shale gas development September 12: Beijing invited foreign joint ventures to bid for shale gas exploration licences in S. China Hammamet, Sept 22, '12 14

15 Central North Africa Two major shale gas basins: [1] Ghadames Basin, in eastern Algeria, southern Tunisia and north western Libya; [2] Sirt Basin, in north-central Libya. 1,861 Tcf of risked gas in-place [EIA, 4/11] Tunisia to be confirmed during this conference Attracted many international E&P countries Only country in North Central Africa where unconventional natural gas potential being actively explored 61 Tcf of risked shale gas in-place, w/ 43 Tcf in the Silurian Tannezuft shale & 18 Tcf in the Frasnian Hot Shales of the Ghadames Basin [EIA, 4/11] Jun 10, 2012: Royal Dutch Shell Plc [RDSA] discussing possibility of exploring for shale-gas deposits in Algeria, Tunisia Sept 17: Winstar Resources Ltd., Calgary external study: vast gas potential in Silurian Tannezuft hot shale in Ghadames basin, S. Tunisia Hammamet, Sept 22, '12 15

16 Natural Resources GP Shale Gas Basins, Pipelines: Central N. Africa [EIA] Hammamet, Sept 22, '12 16

17 Environmental, Health Issues Environmental Water contamination depletion: efforts to recycle, reduce well cement cracking food-quality liquids in 5 yrs? Nationwide Mutual 1 st major insurer to not cover gas fracking damage July 12 Seismic risks Impacts on landscape and land use Air pollutant emissions and soil contamination GHG emissions [methane etc] Cost of dairy up Radioactivity? Risks to various species? Health: Bleeding, Oozing legions covering people s faces, wounds, severe inflammation, phenol & hippuric acid in urine Hammamet, Sept 22, '12 17

18 Policies Public Policies Environmental and licensing Protection of public health and safety in general Enhancing & protecting natural resources Price volatility Investment uncertainty Tax policy In the specific field of unconventional oil and gas extraction through hydraulic fracturing, two other important issues at play: Securing energy independence Cartelization of gas markets Hammamet, Sept 22, '12 18

19 Geopolitics Fracking caused US NG price to fall to < 3 $/mmbtu while in Europe > 10!! European fracking bans/opposition slowed devt Bans & moratoria could delay by > a decade replacement of much of high-priced Russian and N. African gas w/ cheaper domestic production SG devt can reduce a country s dependency on imported gas, increasing domestic energy security: eg. UK fm Norway/Qatar Russia, Qatar et al to lose competitive advantage as suppliers of [non-conventional] oil & gas but Gazprom Sept 6, 12: It remains to be seen whether the shale gas boom will revolutionise the European gas market. Hammamet, Sept 22, '12 19

20 Geopolitics Oil & gas affects current account deficits and prices/inflation in importing countries International nuclear energy [and renewables?] could be heavily affected by lower-priced non-conventional oil & gas US [shale] gas crucial: Japan applying US technology crucial: China getting it As shale-derived US NG becomes cheaper in past few years, power companies opting to use it, rather than thermal coal, to generate electricity Hammamet, Sept 22, '12 20

21 References Work by Vasili Nicoletopoulos, Natural Resources GP Hydraulic Fracturing and the Growth of Shale Gas and Shale Oil Internationally, A Study by Natural Resources GP, July 12 Rare Earths and Shale Oil & Gas: Technology, Environment and Politics, Sustainable Mining Development in Europe, Plovdiv, Bulgaria, Sept 12 Forthcoming: Hydraulic fracturing, a working paper submitted to IENE, Aug 12 Forthcoming: Fracking in Europe, for Industrial Minerals Magazine, Sept 12 Other Studies and reports by EIA, EPA, EC, EP, IEA Hammamet, Sept 22, '12 21

22 Thank you very much! Vasili Nicoletopoulos Hammamet, Sept 22, '12 22