Horn River News
Shale Gas in Northern BC and elsewhere


 

For a number of years this was the Horn River News website. The purpose of Horn River News was to consolidate news on the Horn River Basin including shale gas and the companies participating in the exploration of the area, while offering insight into the potential of unconventional shale gas as a clean alternative to other fossil fuels.
Content is from the sit's 20109 - 2014 archived pages providing a glimpse of what this site offered its readership.

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About

Welcome! There has been a great deal of interest in the Horn River Basin located in the northeast of British Columbia, Canada where massive reserves of unconventional shale gas have been discovered.

Shale gas across North America have changed the way we view the resources available to meeting long term energy needs while reducing carbon emissions. Some estimate the Horn River basin could contain over 600 trillion cubic feet of natural gas. The most recent public report* by the National Energy Board (“NEB”) pegs Horn River volumes at 78 trillion cubic feet of shale gas in the northeastern corner of B.C. (this does not include the Montney basin or others in BC). This is enough natural gas to cover all of Canada’s growing needs for 26 years according to NEB.

Billions of dollars are being invested into the area and positioning the Horn River basin as a major producer of shale gas in North America, and contributing to building a bridge to a cleaner energy future.

Your comments are encouraged and welcome. Thank you.

Horn River News

hornrivernews(a)gmail(dot)com

*NEB News Release: First time study doubles the estimate of BC gas resources

15 responses to “About”

  1. Johnny| November 27, 2008

    Nice to have a spot where all of the news is about Horn River.

    Nothing happening until Gas price goes up – as a contractor for Encana they have cut back spending huge up there, I have had to lay off an employee.

    Encana plans on spending some mad cash up there though. Plans of a 600 man Camp & huge laydown yard. 2 new Trinidad rigs drilling right now for ECA – new gas plant should be online sometime in the first or second quarter 09.

  2. hornriver| November 27, 2008

    Your participation and comments are both welcome and encouraged. Thank you for your post.

  3. Frédérick Chabot | May 5, 2009

    Private investor. Passionate of Shale Gas and regular reader of your blog. This company could reshuffle the cards at Hamburg with a contrarian approach ( unconventional ) to the play. Muskwa in Alberta, who knew!

  4. Mill Philler | September 23, 2009

    As a directional driller with no Horn River experience; any reading or research I do on the technology used there concentrates on Frac technics. Can anyone tell me if Horn River wells are drilled either under-balanced or with managed pressure?
    Previous Shale gas experience in the Marcellus Shale field in Pennsylvania was conventional, however I wondered if there were significant differances at Horn River.

    • Marius Simon | September 27, 2009

      They call it underbalanced, but they are drilling with conventional invert mud, very light to increase ROP, so because it’s impossible to maintain the right counter-pressure on the formation, they are using a closed system with a separator vessel, flare stack, etc…
      it is actually Pressure Controlled Drilling
      www.strataenergy.net/about_strata.htm

  5. Marius Simon | September 27, 2009

    The Horn River Basin

    The Horn River play is one of the latest grand resource plays to emerge in the Western Canadian Sedimentary Basin. Following in the footsteps of such shale gas plays as the Barnett, Antrim and Caney Shale, the Horn River discovery lead to a surge in land sales in remote north-eastern British Columbia. Mineral rights for more than a million acres were secured by oil and gas companies in the last few years.
    Horizontal Section Chart

    While the presence of natural gas in this stratigraphical unit was known for decades, it took recent technological advances to make this play economical, allowing operators to extract hydrocarbons from the shale. Horizontal drilling allows boreholes to open up more reservoir; multi well pad drilling minimizes the environmental impact; invert mud keeps open holes under control. Multi-stage fracturing, a process that cracks up the rock by shooting high pressure water and sand into the formation, opens new permeable conduits in the otherwise tight formation. The thickness of the shale stack makes this an ideal candidate for multi-stage fracturing.
    Build Section Chart

    Large quantities of natural gas are present in various horizons of the Horn River Formation. Commercial quantities of gas can be extracted from the Muskwa shale, Otterpark Member or Evie Member. Natural gas reserve estimates vary from 100 to 600 trillion cubic feet, twice to ten times higher than reserves of the Montney Play, which is successfully drilled south of the Horn River Basin. Ten to twenty percent of the gas can be recovered with current technology.

    Chinook Consulting assists oil and gas companies with field and office geological supervision of operations pertaining to all areas of the Horn River Basin. Several of our wellsite geologists are specialized in this particular play. Well positioned since the discovery of this play, our company amassed solid expertise and detailed knowledge related to the challenging geology and complex drilling process of the Horn River Shale.

  6. Marius Simon | September 27, 2009

    The Case for Remote Geo-Steering – Cutting Costs in Horn River

    The Western Canadian Sedimentary Basin is a mature oil and gas area, where most of the easy reservoirs have already been discovered, and in many cases already drained. Most new plays are linked to the deployment of new technologies in reservoirs previously deemed un-economic.

    Where is remote geo-steering applicable?

    Not every play is suitable for remote geo-steering. Most conventional plays aren’t, due to the fact that the best borehole follows the best quality reservoir, and cuttings sample observation is crucial in determining the optimal wellpath. A few of the largest resource plays drilled nowadays are prime candidates, however. Contributing factors are good well control of resource plays and existing in-depth knowledge of reservoir characteristic from previously drilled stratigraphic wells.

    Most new gas wells use horizontal drilling to open up more reservoir. The same is true for heavy oil in-situ wells. Gamma markers are used for landing the build section for most horizontal wells. Not sample description, but continuously supervision and communication are the key for optimal landing.

    When hydraulic fracturing jobs create large permeable conduits around the well-bore, the hole can be drilled at some distance from the best natural porosity and still tap the entire hydrocarbon potential of the reservoir. The prime objective when penetrating low permeability reservoirs with thick layers of monotonous shale or siltstone is not so much rock quality, but drilling efficiency. MWD and drilling parameters are sufficient to choose the optimal drill path in such horizontal wells. Remote geo-steering can be used to drill wells in the Horn River shale gas play or in the Montney Formation in the southern Peace River Country.

    When drilling horizontal wells in thin sand beds, penetration rate is the first alarm when the bit hits roof or bottom of the reservoir. Gamma or other LWD signatures are most often used to decide steering direction. Fast decisions are crucial to maximize the exposure to hydrocarbon rich rock. Steering based on cuttings samples is ineffective in this kind of play (high penetration rates produce contaminated samples, and the lag time delays the process further). Lithology within a monotonous formation gives little to no information regarding the position of the wellbore within the uniform rock unit. Remote geo-steering can be applied in heavy oil wells drilled in the Clearwater and McMurray Formations in the Athabasca area, in the Bluesky Formation of the Peace River area, or in the Bakken light oil play in South-Eastern Saskatchewan.

    What does remote geo-steering offer?
    Horizontal Section Striplog

    * Continuous supervision of drilling operations
    * Continuous assessment of stratigraphic location of the drill bit in real time.
    * Correlation of drilling, MWD and mud gas parameters throughout the wellbore and to offsetting wells.
    * Use offset well information to optimally land the build section, by employing TVD logs with cross plot of offset data.
    * Continuous monitoring and critical evaluation of the wellpath inclination and azimuth in relation to stratigraphic markers and porosity windows.
    * Continuous communication with directional driller, proactive adjustments to ensure wellpath placement remains within the acceptable stratigraphic window.
    * Proactively evaluate wellpath position in relation to existing and planned wellbores.
    * Assess hole condition by monitoring drilling parameters and mud properties, paying particular attention to any indications of overpressure zones, sticky hole or lost circulation.
    * Establish estimated timelines for events such as encountering critical Formation tops, casing points, entering reservoir, and reaching total depth.
    * Estimate how long current bit is expected to drill, and when the next trip is expected.
    * Generate detailed daily reports, to be distributed within the company and to partners as needed.
    * Generate exhaustive final reports and striplogs.

    Why should remote geo-steering be considered?

    There are two main arguments to be made in favour of remote geo-steering: one is the lower cost and the second is the added safety.

    Savings occur due to the fact that geologists work close to home, transportation and accommodation costs are eliminated. Day rates are typically lower for people working in town as compared to on-site personnel.

    Safety is always a big concern for oil and gas companies. With fewer people at the wellsite, there is less exposure to hazards. Fewer vehicles on the road and a smaller ammount of logged driving hours also lower the risk of accidents.

    Having a focused group of geologists following a project also increases the quality of the job, with better response and more accurate data acquisition. Better flow of information is another success factor of the remote geo-steering procedure.

    How does remote geo-steering work?
    Operations Room

    Real-time data relay from the wellsite is a day to day reality and has become very robust and reliable in the past few years. Geologists can acquire continuous drilling and MWD parameters to decide the optimal steering direction in real time at any distance. Decisions can be instantly relayed to directional drillers. Geologists with extensive wellsite experience are key to the efficiency of a remote procedure system.

    Cuttings samples can be collected at the wellsite using semi-automated sample catching systems that require minimal supervision; they can be prepared and described at a later time in a laboratory environment. For in-depth analyses, critical samples can be collected and preserved in geo-jars and gas samples can be harvested in iso-tubes and preserved for subsequent analyses in a specialized laboratory.

    Chinook Consulting offers remote geo-steering services tailored for specific projects. Continuous remote geological supervision is offered in house (in the offices of our clients) or from our dedicated operations room.

    If cuttings samples are required, our company can arrange sample preparation from wet samples and petrographic description.

  7. Marius Simon | September 29, 2009

    Please include TAQA NORTH in your list of companies (Blogroll)

  8. Frederick Chabot | September 29, 2009

    Could someone explain to me potential limitations with a thin shale, say under 40m?

  9. Marius Simon |October 9, 2009

    Gazprom wants 10% of US Natural Gas market in 5 years

    BUENOS AIRES, Oct 8 (Reuters) – Russia’s Gazprom (GAZP.MM) aims to take a 10 percent share of the U.S. natural gas market within five years, Deputy Chief Executive Alexander Medvedev said on Thursday.

    The company plans to expand into the United States as it did in Britain in recent years, Medvedev told reporters.

    “We are taking into account different opportunities, but Gazprom marketing operated on the organic growth route in the United Kingdom,” he said.

    “We are now following the same method in the United States. We know how to work in fully liberalized markets,” Medvedev said at a press conference at the World Gas Conference.

    The Russian giant plans to use liquefied natural gas from its Sakhalin-2 project to supply U.S. customers and is also looking at swapping pipeline gas in Europe to obtain supplies for the United States.

    In the longer term, Gazprom could send LNG from its giant Shtokman field to the United States. The field, which is being developed with France’s Total (TOTF.PA) and Norway’s StatoilHydro (STL.OL) should begin production in 2015, Medvedev said.

    Gazprom’s European customers, which sharply cut back gas purchases earlier in the year as the world economy swooned due to the global financial crisis, have been stepping up their purchases in recent months.

    “Starting from July … we see that the daily offtake of gas is substantially higher,” Medvedev said, adding shipments were up by as much as 30 million cubic meters per day from the low point earlier in the year.

    UKRAINE PAYS

    Gazprom has received payment from Ukraine for the gas consumed in September and Medvedev said that if contractual payments continue there will be no problems for European gas supplies this winter.

    “We do hope that political factors will not negatively influence (the situation) especially in view of the (Ukrainian) election campaign … we know that Ukraine has enough hard currency reserves to pay for its gas,” Medvedev said.

    Disputes between Russia and its neighbors, like Ukraine that host the giant pipelines that connect Gazprom with its western European customers, have led to significant disruptions of gas supplies in recent years, pushing the issue of gas supply security up the agenda for European energy importers.
    Medvedev said Gazprom had enough gas reserves to meet future European needs as well as those of emerging Asian consumers like China.

    Gazprom aims to eventually hold a 25 percent share of the world LNG market by 2020 with supplies coming from Sakhalin in the Pacific, fields off the Yamal peninsula in northern Russia and the giant Shtokman field in the Arctic.

    The company is also urging Russia to liberalize the domestic gas market, in part to spur on energy efficiency. Russian industrial users are ready to operate in a liberalized market, Medvedev said although the lingering effects of the economic crisis may deter the government from moving quickly, he admitted.

    Medvedev said talks with ExxonMobil (XOM.N) over the gas at the Sakhalin-1 project were progressing and he hoped to wrap up a deal to have the gas sold into the domestic Russian network completed soon.

  10. Marius Simon | January 18, 2010

    Please include PetroBakken Energy Ltd. in your list of companies (Blogroll)

  11. Marius Simon | February 2, 2010

    All knotted up

    As Canadian gas production slips, exports to the United States are

    by R.P. Stastny

    Western Canadian natural gas production enjoyed historic highs throughout the early years of the last decade and, not surprisingly, gross export volumes to the United States followed in kind. Exports peaked in 2007 at just over 10.4 billion cubic feet (bcf) a day, but then followed production declines. Analysts now expect that downward trajectory to continue even if gas production makes a comeback. The reasons are anything but simple.

    At one time, natural gas forecasters would look to weather, storage levels, and North American production levels for clues. Today, a host of other significant factors need to be considered: the pace of the U.S. economic recovery, the rate of shale gas declines, the extent of the U.S. gas drilling slowdown, how much Canadian natural gas is diverted to the oilsands, the price of liquefied natural gas (LNG) imports versus Canadian gas prices, and the fluctuations of currency exchange rates.

    Other considerations will also impact Canadian gas exports: TransCanada PipeLines´ pending mainline toll increase, the impact of additional volumes of natural gas to the U.S. Midwest through the newly completed Rockies Express pipeline from Montana to Ohio, the extent of power switching from coal to natural gas in both the United States and Canada, further royalty adjustments or drilling incentives in Alberta or British Columbia, the effect of service cost deflation on drilling activity levels, and how aggressively major players step up development in the Montney and Horn River shale plays. (Devon recently traded its international plays in favour of North American gas, while ExxonMobil and Imperial Oil increased their respective land holdings in those two northeast B.C. areas.)

    There remain still more long-term variables driving Canada´s gas exports: the timing of Arctic pipeline approvals; the emergence of new technologies with potentially step-changing impacts such as multi-stage fracing of horizontal wells or the unlocking of methane hydrates; the ultimate accuracy of shale gas reserves estimates; and a host of potential-but unpredictable-environmental, legislative, or geopolitical changes.

    Forecasting today is like navigating through a fog, fraught with uncertainty, even humbling to many who make it their life´s work.

    “There was a time when I thought I understood all this,” says Dave Russum, vice-president of geoscience for AJM Petroleum Consultants. “When I was younger, I felt like I could read the trends and predict what was going to happen. But as it becomes more and more complex, I think it´s the unexpected factors that´ll have the biggest impact.”

    By this, he means the hurricane that wipes out a portion of production in the Gulf of Mexico, or a financial meltdown that slams the world into a recession. So rather than pulling numbers, Russum simply says that natural gas exports are likely to decline in coming years.

    “The biggest factor right now,” he says, “is how quickly the U.S. comes out of recession, boosting industrial demand.”

    Russum also puts a lot of stock in the environmental factor. Large-scale switching from highly polluting coal to natural gas power generation has the potential to make a real impact on natural gas demand in North America.

    As for whether stronger natural gas prices will improve Canadian gas exports, he isn´t so sure. This is because the United States, in his estimation, has a greater capacity to ramp up its natural gas production than Canada. So any increases in commodity prices will be met by an uptick in U.S. drilling, quickly depressing prices again.

    “So logically [Canadian gas exports] will be coming down,” he says. “The volume of gas we´re producing in Canada and certainly in Alberta is going to slip. I think even the growth in B.C. will be inadequate to make up the slide in Alberta gas production. The consumption in the oilsands and the conversion to natural gas power generation within Canada will increase demand, so that also means that there will be less to export.”

    Bill Gwozd, vice-president of gas services at Ziff Energy Group, shows more faith in the ability of his company´s forecasting models to generate hard numbers.

    “We had about 10 bcf per day exported in 2005 and, in 2010, that´s down about 20 per cent,” Gwozd says. Production growth in the Montney and Horn River, he adds, will likely be offset by the growth of natural gas demand in the oilsands and possibly by the Ontario shift to more natural gas power generation. “So by 2015, exports are expected to still be in that 7 to 8 bcf per day range.”

    By 2020, Ziff Energy forecast models include Mackenzie Delta gas and a whisper of Alaska gas production, but starting in 2015 it also factors in growing volumes of liquefied natural gas imports to the United States. The net effect is that by 2020, Canadian gas exports to the United States are still about 7 bcf to 8 bcf per day. And that actually is optimistic.

    “Realistically optimistic,” Gwozd says. “But there are a number of grey clouds on the horizon. If Alaska is delayed or Mackenzie is delayed by five years, or LNG is delayed by a few years, or the oilsands development is accelerated because of demand, then you could have the stars aligning so that gas exports are down even more.”

    Oilsands producers are forecasting that 6 bcf per day will be needed for projects by 2020 if all of them go ahead. Ziff, however, sees oilsands gas consumption more conservatively: 3 bcf per day by 2020, or 20 per cent of Canada´s production. (The oilsands currently consume about 1.1 bcf per day.)

    “The shift from a coal-fired power generating strategy to a natural gas-fired strategy will also vacuum away incremental gas from our cousins in Boston,” Gwozd says. “By 2020, 30 bcf a day is how much all of North America will consume for natural gas-fired power generation. That´s up from 20 bcf per day currently for gas power generation. So a 50 per cent jump from today.”

    Another variable that comes into play in the long term is where Canadian exports are destined. The United States will always be Canada´s biggest market, but Asia will become a customer as well if the Kitimat LNG project proceeds. By most accounts, this would be a win for Canada. Not so for the United States, because of the uncertainties around Arctic pipeline approvals and the resistance to LNG imports in some parts of the United States.

    “Our models actually have Mackenzie and Alaska eventually proceeding,” Gwozd explains. “But in the interim, until we have LNG in the Maritimes coming on, it would be a prudent strategy for our cousins in Boston, and maybe even in New York, to look into some long-term strategies such as learning how to knit or read by Braille just so they have a backup strategy for those folks who are so adamant to keep LNG off their coast.”

    Perhaps a more realistic backup strategy is the promise of the shale gas plays in the Lower 48. Huge initial production and massive long-life reserves have inspired much confidence in the burgeoning natural gas economy in the United States.

    But these shale plays had better be as prolific as touted in light of declining Canadian exports because a controversy is now brewing over the estimated ultimate recovery (EUR) of shale gas wells in the United States. The firing of World Oil editor Perry Fischer by the publication´s parent company president and chief executive officer, John Royall, has landed this debate on the radar for many.

    Fischer´s dismissal was given no formal reason, but it followed the last-minute withdrawal of a column written by geologist/consultant Arthur E. Berman questioning the EUR numbers promoted by major shale gas producers.

    His doubts are shared by many in the petroleum industry, from scientists and financial analysts. The crux of the issue is that when reserves are calculated on the actual decline trends in the Barnett shales-which are now well-developed by thousands of wells-rather than on some future, model-driven expectation of flattening decline rates, these shale wells show much lower EURs than producers claim.

    If it turns out that years from now the average Fayetteville shale well, for example, has a EUR of 0.59 bcf to 1.04 bcf, as calculated by the likes of Berman, rather than the 2.2 bcf to 3.3 bcf, as claimed by major operators, this could become the biggest wild card yet in the Canadian export game, especially if by then natural gas-fired power switching is already well underway in North America.

 



 

BC Advantage

The B.C. Advantage

  • British Columbia is Canada’s second-largest natural gas producing region (behind alberta) at 3.4 billion cubic feet per day and second-largest reserve holder.
  • BC’s Horn River and Montney shale are estimated to have over 250 trillion cubic feet (Source: Various)
  • Land sales in B. C. fetched $2.66 billion in 2008, up from $1.5 billion in 2007.
  • Producers completed 597 wells in the province in 2007, the vast majority targeting natural gas.
  • Exploration and production expenditures (including land sales) were $8.26 billion in 2007.
  • Royalty payments to government amounted to $1.7 billion in 2007.

Key Investments:

  • EnCana Corp has committed an initial investment of $400Million for a multi-billion dollar gas processing facility with initial capacity of 400 million cubic feet per day.
  • The Provincial Government is investing $187 million into regional infrastructure to provide year round access and increase traffic capacity.
  • TransCanada Corp. has committed to invest $340 million to build a 36-inch pipeline from the Horn River region to the Alberta system a distance of approximately 155km. TransCanada has secured initial shipper commitments for 374 million cubic feet per day.  The pipeline is expected to operational early Q2/2011.
  • Kitimat LNG is building a Liquid Natural Gas (“LNG”) plant to cool and ship natural gas for export to Asia and beyond. Completion date is targeted at 2012. Kitimat LNG has entered into  multi-billion dollar, multi-year deals to provide natural gas to Korea Gas Corp. and Spain’s Gas Natural.

Source: CAPP Statistical Handbook, Canadian Centre for Energy

 



 

Clean Energy

Natural gas can play a vital role in the evolution of our energy consumption into a environmentally friendly, affordable and renewable energy world. Over the last couple years, massive amounts of natural gas have been found in tight shale rock formations worldwide. Advances in technology including horizontal drilling and fracturing have made the extraction of this resource economically feasible.

Shale gas is a cleaner fossil fuel compared to coal and oil, with about half the carbon emissions. By increasing the amount of natural gas used in the North America energy mix and reducing the amount of coal and oil used in electricity plants and transportation network, we can reduce carbon emissions effectively while developing alternative energy sources.

However, like oil and conventional gas, the shale gas is also a finite resource. There are vast reserves that will fill demand for decades but this presents the world with perhaps some breathing room to prepare and plan for the evolution of our global energy needs.

 



SOME POSTS FROM 2009 -2014

 

Natural Gas Makes Largest Gains Since Junex

Posted on November 3, 2014 |

Natural gas prices burst back above $4 with their largest day of gains since mid-June as a rush of early winter cold has traders expecting rising demand for the fuel.

Cool Canadian air is likely to spill over everything east of the Rockies by week’s end, creating the first jolt of heating demand for what had been a tepid market, weather forecasters and analysts said.

Traders responded to updated weather forecasts by buying up contracts as soon as off-hours trading began Sunday evening.

“What that tells me is people were freaked out,” said Todd Gross, chief investment officer at QERI LLC.

Natural gas is a notoriously volatile market, heightened now by competing pressure from record supply and winter worries. An onslaught of gas from U.S. shale drilling has pushed the fuel’s price low enough to make it competitive with coal and has several bank analysts expecting a glut by the spring. But with winter only weeks away, many traders are thinking of last winter’s record cold and demand spikes that pushed prices above $6 a million British thermal units....

 

 

Time to seize a prosperous future fuelled by natural gas

Posted onNovember 3, 2014 |

Compared with coal, natural gas produces half the carbon dioxide, less than a third of the nitrogen oxide and just one per cent of the sulphur dioxide, with virtually no particulates. That China is looking to import LNG from B.C.’s shale gas is good news for both Canada and for the Earth’s atmosphere. But LNG will only slow China’s massive coal-fired power growth. Here’s the really good news. According to the U.S. Energy Information Administration (EIA), China possesses the world’s largest technically recoverable shale gas reserves that, at 1,115 trillion cubic feet, are almost twice as large as Canada’s. These vast resources remain undeveloped due to the early stage of Chinese recovery technology. That’s why the University of Calgary’s announcement of a new Canadian/Chinese Research Centre aimed at unlocking that potential is so newsworthy. At the signing ceremony in Beijing on October 23, U of C President Elizabeth Cannon stated that the project “will help China move from a coal economy over to gas.”

 

‘No LNG exports, no growth’ in Western Canada

Posted on August 15, 2014 |

Experts warn that without a LNG export market on the British Columbia’s west coast, there will be no growth in the industry.

Forecasts have Western Canada’s natural gas production growing by 5 billion cubic feet (Bcf) per day by 2022. However, the forecast includes that amount as being attributed to LNG exports. Without the exports there will simply be now growth in market where competition is growing on a global basis. With no LNG export terminal, Canada’s only customer would be the USA who is now the largest producer of natural gas on the planet.

In a recent report, Simon Mauger, Director of Natural Gas & Economics at Ziff Energy:

“Growth in Western Canada will depend on market growth, first and foremost. So no LNG exports, no growth. With the LNG exports, we expect to see quite some growth — from about 14 bcf a day today up to 19 bcf a day in 2022.”

Recently Apache Energy dropped out of the Kitimat LNG project in BC. Kitimat LNG is considered by many as being the most advanced of the 15 LNG projects under consideration. Likely only two, perhaps three we be built. Chevron Canada the remaining partner in the project is looking for another suitable partner to replace Apache.

Read More:“No LNG exports, no growth’ in Western Canada’s natural gas industry: expert”

Read More: “Apache Energy, under investor pressure, exiting Kitimat LNG project”

 

 

Polish auditors slam government for slow pace of shale gas development

Posted on January 15, 2014

Its always interesting to read the progress other countries are making with shale gas development. In the case of Poland, their national auditing agency criticized the Polish government for the slow pace at which they are developing out the industry. Poland is in a unique situation whereby it great shale gas potential and currently depends on Russia for about 70% of its natural gas needs. In addition, Poland is building a LNG facility on their northeast coast to import natural gas for domestic consumption and potential transport to Ukraine – another Russian natural gas dependent.

Article: Polish auditors slam government for slow pace of shale gas development

 

 

National Energy Board approves four more LNG licenses in British Columbia – no time to waste

Posted on December 19, 2013

Four more proposed liquefied natural gas (“LNG”) projects in British Columbia have received approvals for export licences from the National Energy Board, bringing the total number of licenced projects to seven. Three of the four projects have major backers and include These four projects include: BG Group’s Prince Rupert LNG Exports Ltd., the Petronas-led Pacific NorthWest LNG Ltd. and Exxon Mobil Corp.’s West Coast Canada LNG Ltd. The fourth project is a smaller venture called Woodfibre LNG Export, planned for the Squamish area north of Vancouver. The NEB is reportedly reviewing an additional four applications on top of these seven granted licences.

None of the approved projects, however, are in the terminal construction stage because the proponents say they first need to learn details of the B.C. government’s plans for taxation of the LNG industry and internal assessments still must be conducted on the economics of proceeding.

Apparently none of the approved projects are in the construction stage. One of the reasons construction has not started is that the various proponents need to understand the BC governments taxation plans for the LNG industry. With the NEB doing their part the BC government can ill afford to delay the process as perhaps the entire Canadian natural gas industry is in jeopardy.

Just the day before the NEB announced their license approvals, the Energy Information Administration released their Annual Energy Outlook that forecasts the frack induced boom in natural gas and oil production will continue through to 2040. Natural gas production is forecast to rise a staggering 56% from 2012 to 2040 and will reach 37.6 trillion cubic feet (Tcf) and the report also predicts that the U.S. surpass Saudi Arabia as the world’s biggest oil-producer in 2015. Truly an amazing turn of events. So it is quite clear that the U.S. will not be needing Canadian natural gas any time soon, and Canada better move fast to save the Canadian natural gas industry.

If Canadians want to retain the billions of dollars generated and the thousand of jobs created by the Canadian natural gas industry, it is absolutely imperative that the pipelines to carry gas to the BC coast, and LNG facilities to process it for export must be approved and built as soon as possible. There is no time to waste. The U.S. once our largest customer is now our largest competitor and will not revert back to being a customer till at sometime after 2040. By 2040, a robust global LNG distribution network will be in place making LNG distribution worldwide efficient and cost effective. In order for Canada to compete effectively it is apparent a domestic distribution system that plugs into the global network must be in place.

While Ottawa reviews the licenses, BC debates tax schemes, and Canadians debate about pipelines and LNG distribution systems, other countries around the world are building out their distribution facilities and moving forward in being first to market, and first to service the energy hungry markets in Asia. The opportunity is there for Canada to seize but there is no time to waste.

Update: Today, the Northern Gateway Pipeline review will be released.

Read more @ The Globe & Mail: NEB Approves four more LNG license in BC, but await Ottawa’s blessing

 

Florida nuclear project cancelled in face of shale gas boom

Posted on August 9, 2013 |

Its unfortunate that Duke Energy scrapped plans for a $24-billion nuclear project in central Florida citing the boom in shale gas as the reason for the cancellation. This short sited view will only result in a the project re-emerging at a later date at a substantially higher cost. Though the Horn River News has long been supportive of the opportunity presented by the boom in shale gas globally, and called it as being the most important energy source of the next century, it is important to realize that no one single source can meet growing global clean energy needs. Nuclear will play a critical role in developing a sustainable, low emission energy mix.

HRN

(Source) North America’s nuclear industry received more bad news last week when Duke Energy scuttled a planned $24-billion nuclear project in central Florida, as competition from low-cost gas has cast a pall over a long-promised renaissance.

Duke is only the latest in a list of companies that have either cancelled construction plans or announced closure of reactors that had been scheduled for costly overhauls.

The industry has run into a number of problems including weak power demand and cost over-runs. But it has also become hard to justify new nuclear in the face of a shale gas boom that not only has brought low prices, but is expected to keep a lid on the fuel costs for decades to come.

Ontario is currently redrawing its long-term energy plan, and will be reviewing proposals from Westinghouse and Candu Energy to build two reactors to make up for the loss of capacity when older ones reach end of life in the next decade.

Full Article: Globe & Mail; Florida nuclear project cancelled in face of shale gas boom

 

Happy Birthday to the Pickens’ Plan

Posted on July 8, 2013 |

Pickens-Plan-Logo

 

This week marks the fifth anniversary of the announcement of the Pickens Plan. Mr. T. Boone Pickens has launched a video celebrating and summarizing all of the accomplishments of the Pickens Plan and an op-ed that he wrote which was published in the Dallas Morning News.

Congratulations on five successful years T.Boone! Here’s to five more.

 

Obama sets stage for Keystone XL approval

Posted on June 27, 2013 |

Photo: AP Photo/Charles Dharapak

Photo: AP Photo/Charles Dharapak

In a speech yesterday in President Barack Obama stated the Keystone XL pipeline will be rejected unless it’s clear that it won’t exacerbate global warming.

“Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interests,” the President said, adding “our national interest would be served only if this project does not significantly exacerbate the problem of carbon pollution.”

President Obama has appeased the opposition while setting Keystone up for approval later this year because Keystone will easily meet the stated requirements.

First, with or without the Keystone pipeline the Alberta oil-sands will increase production over the coming years. The pipeline will not have an impact on this growth or the carbon emissions from the oil-sands production.

Second, the increased shipment of Alberta oil-sands product via the Keystone is intended to replcace heavy oil from Venezuala and other suppliers. So again, the keystone pipeline will not result in a net increase in emissions.

In fact, if the Keystone is not built there will be an increase in emissions as oil-sand bitumen will be shipped to the USA from Alberta buy diesel powered locomotives and also have an increased risk profile compared to shipping via pipeline.

President Obama has set the criteria know that it will be achieved and when approved will be able to defend his decision.

The alternative solution would be to build refining capacity in Canada and ship end products rather then raw bitumen to the USA. The Americans would happily buy it and it would create all those jobs in Canada rather then the USA (apparently they don’t want the jobs or don’t need them in the USA!)

Keystone XL will get built, and so will the Northern Gateway pipeline which will open a secondary market for Canadian oil and gas in Asia as it will also meet the same criteria. It is not good business to be dependent on just one customer just as the USA is not dependent on one supplier.

 

Britain doubles north England shale gas estimate

Posted on June 27, 2013 |

As anticipated, Britain has doubled its estimated shale gas resources in northern England, which could have a positive impact on reducing reliance on imports and fundamentally transform the the UK energy market.

The familiar impact of shale gas on the north American energy market, could be realized in the UK providing a domestic source of clean burning natural gas. The British Geological Survey estimated today that the Bowland shale gas area holds 1,300 trillion cubic feet (tcf) of natural gas.

There is still plenty of exploratory work programs to conclude before the economic feasiblity of the Bowland shale gas. Interested parties will also have to invest in educating the local communities and environmentalists on the latest technology that addresses most of the historical concerns on the fracking process.

For example, we have oftern referred to the tremendous success of GasFrac Energy Services of Calgary, Alberta which uses organic based fluids that are 99% recoverable and recycled back into the fracking process. At the same time, the company’s technology increases overall production rates. Very positive. It just proves that technology can solve problems and improve performance both in production rates and environmental

Reuters: Britain doubles north England shale gas estimate

 

 

UK shale gas survey likely to reveal reserves higher than expected

Posted on June 26, 2013

(Source: The Guadian) New estimates of the UK’s reserves of shale gas will be published on Thursday, and are expected to be much larger than originally thought – potentially supplying the UK with decades’ worth of natural gas, if a high proportion of the gas in the rocks can be extracted at a low cost. However that key question that cannot yet be answered due to the lack of experimental wells drilled so far and the challenges posed by the UK’s high density of population.

New shale gas drilling is likely to come under fire from protestors, though ministers are hoping to put off opposition by offering local communities incentives to encourage them to agree to the fracking operations. The incentives which may take the form of energy bill discounts or improvements to local amenities.

The survey of shale reserves, carried out by the British Geological Survey at the request of the Department of Energy and Climate Change, has been much delayed, reflecting how politically controversial it is....

 

CNN: Pickens on natural gas – You can’t beat it!

July 14, 2009 ·

T. Boone Pickens talks to CNN about  Washington, the Iraq war, and our energy future.

On how and why natural gas is key to the energy needs of the US, Pickens stated:

“Natural gas is 50% cleaner than diesel and gasoline. So you’re getting all kinds of pluses with the natural gas. What are the minuses? The infrastructure isn’t quite there. But it will get there. Don’t worry about it. The government doesn’t have to put any infrastructure in. If the cars are still there, people will build stations to fuel the cars. The [natural gas vehicle] technology is there. It’s in place. It works. There’s 10 million vehicles in the world today on natural gas, and 142,000 of them are in the United States. What the fuel is is a bridge to [newer alternative energy technologies]. It’s what you have. It’s not forever.”

“This is going to have to happen because it’s a security issue for the country. I mean, you’re buying oil from your enemy. With people around the world, our credibility isn’t worth a hoot because of that reason. They cannot understand why we’re funding both sides of the war.”

Check out the full article.

CNN Special Report – Energy Fix:  “Pickens on natural gas: You can’t beat it”

 

T. Boone Pickens clarifies wind farm plans; defends against attackersh2

July 14, 2009 ·

Pickens plan pic

Oil billionaire, turned wind / natural gas champion, T. Boone Pickens knows a few things about energy. He has spent his career in the oil business, and he is dedicating his time and money to taking the US into a new, secure and cleaner direction of energy independence.

Today, Mr. Pickens was compelled to clarify his plans to build the largest wind farm in the world in Pampa, Texas,  suggesting that other special interest groups are out to see his “Pickens Plan” fail.

Mr. Pickens understands what is at stake here for US energy security, and for the environment globally. His plan is simple. Use more wind power to generate electricity, and use more natural gas to power vehicles.  Citizens should understand that Mr. Pickens is ultimately promoting and building a strategic energy plan for cleaner energy in the United States. And his success will be good for the US, and good for the global environment. So, in that regards, it is important for citizens of the US, and citizens of the world to support his actions.

And while Mr. Pickens is investing his own money to promote the plan and provide the initial financing for a critical piece of his strategy – the world’s biggest wind farm. As an 81 one year old billionaire his primary motive is not profit. But lets not be fooled to thinking that this is not a profit making venture. It will be. And it should be if it wants any hope of long term success.

 

US coal lobbying money beats natural gas downh2

July 14, 2009 ·

clean_coal_diag_main

Source: SANDIA

The USA is heading for a power showdown that will pit coal against natural gas for electricity generation. According to the Wall Street Journal, electric utilities used coal for 59% of their power generation in 2007, while natural gas was used 13 percent of the time, as reported by the Energy Information Administration. Coal has been less expensive, making it more profitable for utilities to use as a fuel source. But that was 2007 and a lot has changed since that time.

Since 2007, we have seen a major recession depress demand and the prices for all commodities. During the same time, technology advancements in horizontal drilling and fracturing have increase the natural gas reserves across North America putting further downward pressure on natural gas prices.

According to the WSJ, utilities spent $35.1 million on lobbying while the natural gas industry spent less than $3.3 million in the first quarter of this 2009. The WSJ also stated that out of the top 10 industries with a stake in climate legislation, natural gas put the least money into lobbying in the first quarter.

Coal lobbyists want to slow down government plans to cap carbon emissions and make businesses buy allowances for those emissions. While coal and natural gas are the two top sources of fuel for electricity generation, utilities favor coal as a cheaper source fuel which provides higher profits. The massive amount of lobbying by utilities in the the USA has resulted in a bill that makes coal carbon competitive to natural gas on paper instead of looking at the real merits of each fuel source on its true carbon emissions. Natural gas emits about half the amount of carbon for the same amount of power generated as coal does.

Energy is strategic for all countries. And the solution to generating cleaner energy today and for generations to come is by utilizing the most practical energy sources that will have an immediate impact on carbon emissions while investing in technology for both clean sustainable sources such as wind, and solar, as well as investing in technology that makes existing sources like oil and coal cleaner sources (carbon capture etc).

 The problem implementing bills that make certain fuels more carbon competitive on paper takes away any incentive to making those sources cleaner. The $35 million spent on lobbying on behalf of the coal industry, may have been better spent on technology advancement for the coal industry.

Meanwhile, on Energy Independence Day (July in the US, T. Boone Pickens participated in a bi-partisan press conference to introduce the Nat Gas Act in the US Senate along with the original sponsors of the bill; Robert Menendez (D-NJ), Orrin Hatch (R-UT) and Senate Majority Leader Harry Reid (D-NV).  Yesterday, T. Boone Pickens reported that they now have 70 bi-partisan co-sponsors of the Nat Gas Act (HR.1835)  in the House.

 The“Pickens Plan”h2 is simple. Power more of the grid with wind and power more vehicles with natural gas. The end result is less dependance on foreign oil, and less carbon emissions. However, no where does Mr. Pickens state that coal and oil are not needed. He fully understands that energy independence comes from domestic sources that are cleaner then they have been in the past, or new domestic sources that are simply clean. (Unfortunately, economic conditions and the lack of suitable transmission facilities have lead to some delays with T. Boone Picken’s wind farm in Pampa, Texas)

Why natural gas? Because there is lots of it; its proven; its readily available; its cleaner; and it sets down the foundation for a future energy economy based on hydrogen.

It will take two things to solve our energy needs and reduce carbon emissions. 1) Technology; and 2) Profit. These two parts together are a powerful force. Its too bad that the coal industry is trying to justify its current carbon emissions instead of focusing this lobbying money and effort into tecnology to make it cleaner. Coal is a valuable and needed source of energy. It simply has to reduce it’s carbon footprint at the point of power generation and not on paper and in the halls of the Senate.

Wall Street Journal: At the Centre Ring in Senate Climate Debate: Coal vs. Natural Gas

 

Kitimat LNG and EOG sign natural gas supply agreementh2

July 13, 2009 ·

 

Artist rendering of Kitimat LNG Inc.'s processing plant

Artist rendering of Kitimat LNG Inc.'s processing plant

Kitimat LNG announced it has signed a memorandum of understanding (”MOU”) with Texas-based EOG Resources Inc. (NYSE:EOG), whereby EOG will supply natural gas from the Horn River basin to Kitimat LNG’s planned liquid natural gas facility in Kitimat, British Columbia.

Rosemary Boulton, President of Kitimat LNG stated:

“EOG’s participation in our project reinforces the fact that business and natural gas fundamentals support our LNG terminal. Kitimat LNG presents a compelling opportunity for producers to leverage growing natural gas reserves in western Canada and sell into significant new international markets such as Asia.”

This announcement follows two previous announced MOUs Korea Gas Corp. (HRN: Kitmat LNG signs MOU with Korea Gas Corp worth $20 billion) and Spain’s Gas Natural (HRN: Kitimat LNG signs MOU with Spain’s Gas Natural) to purchase LNG from Kitima LNG’s facility over the next ten years.

The Kitmat LNG facility is the critical link to opening new  international markets for the Horn River basin and the western Canadian gas industry as a whole. EOG is an early major into the Horn River basin which  has an estimated 250 trillion cubic feet of natural gas locked in the shale rock formation.

The Canadian Press: EOG, Kitimat LNG reach agreement on proposed liquefied natural gas project

 

Abu Dhabi invests in Horn River basinh2

July 13, 2009 ·

Middle east takes stake in the Horn River basin.

According to rig data from oil-field services company Baker Hughes Inc.,  total number of oil and gas rigs fell to 916, down 12 from the previous week.  This week  672 rigs were drilling for natural gas representing a drop by 16 from the previous week; 234 were drilling for oil an increase of 5, and 10 were listed as miscellaneous down 1 from the previous week. Of the major oil and gas  states, Arkansas added one rig. Louisiana lost four rigs, California lost three, Texas and New Mexico each lost two and Alaska and Wyoming each lost one. Colorado, North Dakota and Oklahoma were unchanged.

In an interview Friday, Frederic Lesage, Managing Director of TAQA North stated;

“This is a great time to buy, obviously.”

He also was quoted;

“Why do we want to get into the Horn River? It has great prospective for production and reserves. It’s one of the best shale gas basins in North America, equivalent to the Haynesville [in Louisiana] or the Barnett [in Texas]. And it’s just in our backyard. So why not?”

TAQA has joined a growing list of major companies and investment groups making massive investments into the Horn River basin and underlining its attraction as an investment and in the basin’s long term importance to North America’s energy mix (and Asia’s).

 

US natural gas rigs at a 7-year lowh2

July 12, 2009 ·

Companies cutting exploration and drilling activity has lead to a new 7-year low in the number of active rigs drilling for natural gas in the United States.

According to rig data from oil-field services company Baker Hughes Inc.,  total number of oil and gas rigs fell to 916, down 12 from the previous week.  This week  672 rigs were drilling for natural gas representing a drop by 16 from the previous week; 234 were drilling for oil an increase of 5, and 10 were listed as miscellaneous down 1 from the previous week. Of the major oil and gas  states, Arkansas added one rig. Louisiana lost four rigs, California lost three, Texas and New Mexico each lost two and Alaska and Wyoming each lost one. Colorado, North Dakota and Oklahoma were unchanged.

Continued cuts are in response to low prices and increased inventory supplies. Eventually, these cuts will lead to a point where inventories will begin to decline, and production will not be able to replenish declining inventories creating a situation for price appreciation. Further upward pressure on prices will occur once an increase in demand is factored in due to improving economies. Most analysts forecast the economies in both Canada and the US to turn positive in Q110.

According to a lengthy report last month from Calgary’s Tristone Capital Inc:

“We expect U.S. supply will peak in the next two months and hit an inflection point of sequential monthly declines beginning in the month of August. The drop in supply will begin to accelerate as we enter the heating season, with our expectation that we are down nearly 4 [billion cubic feet per day] year-over-year by the start of winter and the supply shortfall grows to 5.5 bcf/day lower year-over-year by late [in the second quarter of 2010].”

With this week’s rig cut may suggest we are nearing that inflection point. Keep a close eye on data over the next 8 weeks.

Wall Street Journal: Baker Hughes: US oil, gas rig count down by 12 to 916 this week

 

 

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