Alasdair Cross, who is also Producer of the BBC Radio 4 show “Costing The Earth,” says that despite concerns about the environmental impacts of shale gas drilling.

“Shale gas seems to answer the oil industry’s desire for an accessible energy source perfectly just as other sources are becoming more problematic,” he writes.

After becoming a booming industry in the US, shale has spawned worldwide interest and has been showing numerous benefits.

“Shale gas exists in large quantities and promising sources lie close to many big energy-intensive cities,” the article says. “In terms of electricity production it is a cleaner power source than coal or oil, and new horizontal drilling techniques are making it easier to reach.”

Shale gas may already account for more than 10% of US natural gas production and analysts project that could rise to 50% within 20 years.

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n the 12 months between July 1, 2009. and June 30, 2010, the state’s 632 producing Marcellus wells released 180 billion cubic feet of gas – an amount that more than doubles Pennsylvania’s annual natural gas production from the years before the shale exploration began.

These numbers not only mean that Marcellus is on track for producing large amounts of shale gas, they also mean that Marcellus is producing more gas than ever imagined.

“Everybody is going to be happy with these numbers,” said Terry Engelder, a geosciences professor at Penn State University who studies the Marcellus Shale. “These numbers are huge.”

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One particular region – the Mancos Shale – is buried deep in the Piceance Basin, but has already been the site for some tests wells. Another shale play, the Pierre Shale located in eastern Colorado, also holds potential but has yet to be tested.

“Certainly if the Mancos does prove out, it’s very widespread throughout all of western Colorado, and the Pierre Shale is widespread throughout eastern Colorado. If it’s as good as everybody is hyping right now, the potential is pretty exciting,” said Colorado State Geologist Vince Matthews in Daily Sentinel article.

The region is already well-known for its natural gas production, but adding shale gas to the mix could significantly increase the payoff in Colorado.

“We view it as potentially doubling the production from the gas wells,” said Hal Blacker, President of Dejour Energy Corp which holds some Piceance Basin leases.

If so, he added, it would result in the basin’s production being competitive with that of shale gas development areas elsewhere in the country, making it again one of the better places in the country to invest in drilling.

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According to Reuters, Reliance is looking to make a full buyout as it builds the knowledge needed to run shale gas operations independently.

Potential targets for acquisition are Forth Worth’s Quicksilver Resources Inc, Colorado’s Enduring Resources and Houston’s EOG Resources.

To date, Reliance has already brokered three major shale deals, acquiring stakes in joint ventures with Carrizo Oil & Gas, Atlas Energy, and Pioneer Natural Resources.

“Reliance is looking to become one of the key players in the shale business in the United States, the world’s biggest energy market,” the article says. “The joint venture deals allow Reliance to understand and learn the shale gas business, work with good operators, and then enable the company to take a go at it alone.”

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“Visitors from countries such as Germany, Poland, Argentina and Canada might be streaming into downtown Fort Worth to utilize XTO’s expertise,” said an article in the Star Telegram this week.

ExxonMobil is developing plans in all those regions to tap unconventional shale deposits.

“Some of the [international] shale plays will be brought into Forth Worth for review,” said former XTO President Vaughn Vennerberg at a Dallas energy conference this week.

XTO is currently one of the biggest and most lucrative producers of shale gas in North Texas’ Barnett Shale play.

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“Historically gas has been undervalued in the market,” said Tony Meggs, former head of technology for BP and moderator of the MIT conference. “Getting the gas to the consumer was a serious pain in the ass compared to a barrel of oil. Two things are changing gas markets: the climate debate [and] the shale gas boom.”

A shift to cleaner and more renewable energy sources is undoubtedly making shale gas an attractive option said Jeff Fisher, Senior Vice President of Production for Chesapeake Energy, the leading player in the new gas industry.

“Combined with wind and solar energy, [shale gas provides] a long-term viable renewable energy mix,” he said.
Henry Jacoby, a professor at MIT who studies the ongoing interaction between energy and the environment agreed with that statement, and said with cap and trade or regulatory climate policies in place, “gas will displace coal” and grow as a cleaner alternative. Natural gas is the least carbon intensive of all fuels.

However, the environmental impact isn’t the only reason shale gas is “a game changer,” said David Fleishacker, an expert on energy policy. Shale’s abundance is a major factor in highlighting a switch from coal-based energy to gas-based energy.

“Shale gas is widespread, easy to find, and produced at a rate and cost that is economic,” he said.

To date, 32 of 50 states produce natural gas. Some experts estimate there is a 100-year supply on shale gas at current consumption rates.

And the technology to extract the gas – the combination of hydraulic fracturing and horizontal drilling – is driving the market as well.

“Advancements in technology and innovation have unlocked vast supplied of unconventional gas resources,” said Fisher.

While an energy future that is based on minimal to no reliance on fuel at all, the panelists agreed, shale gas is the best option on the table to help the US get to that point.

“The low carbon economy is further away than we think,” said Fleishacker. “Natural gas is here now and will be an essential element in the bridge to the low carbon future.”

Watch the entire conference:

SOURCE:
Go Marcellus Shale: “MIT Energy Conference 2010 – Unconventional Natural Gas”

Rex’s shares climbed 7.2% to $11 on the midafternoon disclosure.

The deal is the Japanese trading house’s second shale deal as a wide variety of international players are seeking exposure to the hot natural gas assets. A surge in output from the one-time unconventional drilling prospects have helped keep a lid on natural gas prices and inventories have surged the past several years.

Meanwhile, Rex gets to become debt free and have “substantial” cash on hand. The oil-and-gas company, which has most of its operations in the Illinois and Appalachian basins, returned to black ink in the most recent two quarters after posting a string of losses since commodity prices fell from record highs in 2008.

“We believe that this will enable us to continue to aggressively develop our assets, while maintaining one of the cleanest balance sheets in the industry,” said Rex President and Chief Executive Benjamin Hulburt. Meanwhile, the company announced Tuesday that its lenders have agreed to boost Rex’s credit line by 25% to $125 million while extending the maturity a year to September 2013. As of Tuesday, $65 million had been borrowed from it.

With the sale, Rex reduced its third-quarter guidance to average daily production by 5% while the year’s target was reduced by up to 20%.

Beyond paying the $88.4 million for the joint venture stake, Sumitomo will also cover 80% of Rex’s remaining Marcellus drilling and well-completion costs up to $52 million. The deal is set to close next month.

SOURCE:
The Wall Street Journal

Though OIL hasn’t said which US company the joint venture would include, the agreement will help OIL access shale gas not only around the world, but also in India.

Presently, OIL, a Navaratna company, has over 1-lakh sq kilometer of area for its exploration and production activities in India, most of it in the north-east, which accounts for its entire crude oil production and majority of gas production.

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George P. Mitchell, founder of Mitchell Energy & Development Corp, is the man who pioneered shale gas drilling in the US by developing the hydraulic fracturing technique that has triggered a shale boom in America, and also around the world.

But in a recent profile in the Philadelphia Inquirer, Mitchell says these accomplishments are only secondary to his real passion: sustainability.

“There’s no doubt this nation is strong because of oil and gas,” Mitchell told the paper. “But sustainability is the most important thing I’m working on.”

While some may consider the combination of oil/gas exploration and environmental sustainability a bit of an oxymoron, Mitchell relishes the effect of a global glut of shale gas, the Inquirer says. Less reliance on imported oil and coal also means less pollution and greenhouse-gas emissions.

“If we don’t start waking up, in 2050 we’re in trouble, because you’ll have nine billion people worldwide,” he said. “And if you can’t make the world work with six billion people, how can you make it work with nine?”

Mitchell also says the shale industry must rise to the challenge of environmentalists by finding a way to create greener fracking fluids that can also be recycled and reused.

“If you can reuse it, it’ll cost you a little money, but it’s a good thing,” Mitchell said. “Because the environmentalists will give you hell, and I think they’re right, they should give you hell.”

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There is a new source of energy which is really a primary focus of the State Department right now,” said David Goldwyn, U.S. State Department Coordinator for International Energy Affairs. “And that’s natural gas”.

In an interview with Voice of America, Goldwyn says natural gas from shale is an excellent source of energy for many nations “so they’re not dependent on one country or one pipeline.”

The State Department recently hosted the Global Shale Gas Initiative to discuss expanding the safe use of shale gas. Twenty nations as well as US federal, state and local regulators met in Washington, D.C to discuss the importance of shale gas development for the 21st century.

In addition to helping the United States wean itself from its dependence on oil, the Obama administration believes that increased shale gas development will help reduce greenhouse gas emissions.

Other studies have also concluded that increased shale gas production in the United States and Canada could also help lower the price currently charged by Russia and Persian Gulf countries.

“This is not only a huge boon for energy security and economic development,” said Goldwyn, “but also, potentially for climate security if countries are able to move away from older coal plants and to natural gas instead.”

As Coordinator for International Energy Affairs at the State Department, David Goldwyn is at the center of U.S. energy security policy. His office supports initiatives that reduce U.S. dependence on foreign oil and also mitigate the impact of climate change.

Source: Natural Gas for Europe