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« Ranalli on scientific consensus | Main | IPPR on wind »
Friday
Aug312012

Hiway to heaven

The advent of horizontal drilling has famously combined with the older hydraulic fracking technique to bring about a revolution in the global energy industry (outside the EU that is, for within the Union poverty generation dominates the political agenda). So while European consumers worry about their energy bills, in North America, the glut of shale gas has caused a collapse in gas prices, to the extent that few in the gas industry can now make money.

However, with the technology being so new, innovation is still an important factor in the economics of shale gas and it is therefore not unexpected that cost is being driven out of the system.

...using a proprietary system called Hiway that only became commercially viable last year, Schlumberger's fracker in chief believes he has knocked a lump out of the infant industry's three major cost components; water, sand, and trucks.

Schlumberger is already using the system on nearly a third of all fracking jobs, and expects that to rise rapidly to 50-70 percent, according to Kyel Hodenfield, the company's vice president for unconventional resources.

"It can vary, but using Hiway we generally say you need 40 percent less proppant," (graded sand mixed with guar gum or lubricating chemicals), he told Reuters in an interview.

"Water is more variable, but it's somewhere between 20 and 50 percent less."

Less sand, less water and less pumping adds up to fewer trucks, Hodenfield explained on the sidelines of the Offshore Northern Seas (ONS) conference in Stavanger, Norway.

Read the whole thing.

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Reader Comments (29)

Sorry to begin with an immediate O/T but a new article has slipped onto CiF in the last few minutes.

An English Literature graduate demands a certification scheme (run by climate 'experts') to certify newspaper articles on climate science. This is make sure they promote the correct message...i mean..err.. science.

Aug 31, 2012 at 6:19 PM | Unregistered CommenterHenry Brubaker

On the one hand:

So while European consumers worry about their energy bills, in North America, the glut of shale gas has caused a collapse in gas prices, to the extent that few in the gas industry can now make money.

On the other hand we know that the 'denialosphere', including advocacy of fracking, is backed by pernicious old fossil fuel interests. Who are thereby putting themselves out of business.

I've never understood this conspiracy theory but especially now. Please somebody make it clear.

Otherwise this can only be seen as a blessing to the ordinary person, to the poor. And that will never do.

Aug 31, 2012 at 6:19 PM | Unregistered CommenterRichard Drake

(outside the EU that is, for within the union poverty generation dominates the political agenda).

That should be licensed to Richard North its a beaut!

Aug 31, 2012 at 6:53 PM | Unregistered CommenterBrian j BAKER

What I want to know is, on the one hand Gazprom is pulling the plug on the Shtokman field in the Barents sea, citing world gas spot prices making a new field uneconomically viable. On the other hand, SSE plc is raising this winter's energy tariffs, on 15 Oct by 9% - citing greater energy prices on world markets.
So, who is telling the truth?

Add in to the mix, Britain is sitting on a sea of cheap gas but we won't exploit it - while the American shale gas bonanza is benefitting the consumer and industry beyond our wildest dreams here in Britain.

What will it take, what needs to happen, before, someone in the British administration/ anyone in Westminster - nah that's much to big an ask. Cuadrilla, should just get fracking and show the middle finger to the British government.

Why not?

Aug 31, 2012 at 7:01 PM | Unregistered CommenterAthelstan.

Your Grace, I have to say how much I like the descriptor - especially when applied to wind turbines - of 'poverty generators'. Kinda sums it up really.

(And why, as I wrote 'wind turbines', did my mind immediately picture 'Wild Woodbines' - and all that they meant to the health of the nation?)

Aug 31, 2012 at 7:13 PM | Registered CommenterHarry Passfield

Less sand, less water and less pumping adds up to fewer trucks...

The Green Lobby is bound to hate this!

Aug 31, 2012 at 7:42 PM | Unregistered Commenterdcardno

I am SO glad I invested in Schlumberger stocks 15 years ago.

Aug 31, 2012 at 8:39 PM | Unregistered CommenterOtter

This is probably just a milestone on the path to lower costs and lower resource inputs for shale gas and fossil fuel production .

I had a 40 year career as a chemical engineer in the oil industry, Oil Sands. My last ten years were spent focused on new and emergent technologies. One primary lesson I learned, all major competent and responsible oil and gas companies have a primary objective, namely, to be the safest and lowest cost producer in the field. Safety includes the environment. The drive for new technology is relentless.

This is one of the reasons why the alternative energy fields, wind, solar and geothermal are, and likely will be for the forseable future, be playing catch up with mainstream energy supply options.

Politicians would be wise to take a pinch of salt when listening to the crystal ball pronouncements of " we just need time to lower our costs" from the alternative energy lobby groups, the target is and will always be moving. Never assume your competition is standing still.

Aug 31, 2012 at 9:34 PM | Unregistered CommenterOld Mike

BYE BYE BLACK SHEEP

RICHARD BLACK QUITS!

http://www.bbc.co.uk/news/science-environment-19422041

(I HOPE THIS IS NOT OLD NEWS)

Aug 31, 2012 at 9:37 PM | Unregistered CommenterFrederick Bloggsworth

Athelstan said:

What I want to know is, on the one hand Gazprom is pulling the plug on the Shtokman field in the Barents sea, citing world gas spot prices making a new field uneconomically viable. On the other hand, SSE plc is raising this winter's energy tariffs, on 15 Oct by 9% - citing greater energy prices on world markets.
So, who is telling the truth?

It is possible that both could be true. SSE might expect prices to rise this winter. However Gazprom, like any gas or oil company, have to try and judge what the market will be like by the time any new field is developed. Extracting gas from the Barents Sea would probably be a very expensive undertaking. Gazprom presumably think that there is a significant chance of low gas prices a few years from now, and are not willing to run the risk of developing a field that would only be profitable if prices were above a certain level.

Aug 31, 2012 at 9:39 PM | Unregistered CommenterRoy

Athelstan

The reason Cuadrilla dont get fracking is that our government will not allow them to frack and has now been sitting on its hands AND our gas for over a year.
I learned something that amazed me when I watched part of the Romney & Ryan show last night. There is a shale deposit in Green Rivers Wyoming that contains1,600 trillion barrels of oil (I knew that bit hehe) which equals all the other known global oil deposits put together. Lest we think that Westminster is the home of all dumb politicians; please be aware that Obama will not allow them to exploit it.
in the US they say the same as us, the only thing that holds them back is that politicians keep getting in the way.

Aug 31, 2012 at 9:58 PM | Registered CommenterDung

Roy - SSE are more likely to be the ones telling porkies. Iirc Ulster Electric announced that they will be cutting prices by 12 or 14% citing lower wholesale prices. I suspect the real reason for SSE's price increase is to help cover the cost of the largely unnecessary Beauly to Denny 400kV line they are currently building through the Highlands. They have ongoing (and hideous) windfarm projects in Perthshire and further north also, and even with the generous subsidies I expect it will take many years to recover the considerable capital cost of these projects. And they have longer plans to build a brand new pumped storage plant on Loch Lochy (which will cost billions, and will not make much net electricity). NOSHEB (now Scottish Hydro aka SSE) used to be one of the cheapest per unit providers, mainly because much of their plant was from the post war hydro-schemes (which were largely paid for by the state, and rain is fairly abundant and effectively free here). But sadly they have now gone down the scam renewables path and long term customers like me will have to take the hit for their (unless I change supplier of course, which I am now actively looking at). I currently average about 26 units a day, and pay about 12p per unit. (so monthly DD is about £120) No mains gas so has to be a lecky only deal. Anyone got any suggestions that don't involve the RSPB, The Guardian or any other eco-ponse do-gooders?

Aug 31, 2012 at 10:25 PM | Registered Commenterlapogus

http://www.telegraph.co.uk/sponsored/earth/the-age-of-energy/9119627/Green-economy-debate.html
As Dung points out - our government will not allow them to frack.
This is very largely due to intense lobbying by SHELL OIL'S Chief Climate Change Adviser, David Hone, who just happens to be Chairman of the International Emissions Trading association.
In this photo he is seen with Oliver Letwin who advises Cameron on Climate matters.
Google -'David Hone -Shell' and you will see all 300+ blogs that Hone has written saying that all fossil fuels, including Shale Gas should be constrained by the use of Carbon Capture & Storage which makes it far less competitive.
(only in his last 3 blogs does Hone fail to mention CCS as even he admits it ain't going happen, but the damage is done)

Sep 1, 2012 at 12:09 AM | Unregistered Commentertoad

Roy, understood, price will always [or should be] the determinate in the market, >demand causes price rises, < supply the opposite etc but we are not talking about a open market, it is rigged and we are getting it in the neck twice over - what with the UK's 'renewable commitment'.

@ Dung,

"There is a shale deposit in Green Rivers Wyoming that contains1,600 trillion barrels of oil (I knew that bit hehe) which equals all the other known global oil deposits put together."

Wow, that is astounding [peak oil, huh?] anyway, the political lunatics are halting the progress of the west - particularly in the US of A and in the UK, mind you lets hope Ryan and Romney can triumph in a few months - we all need that.

With the Chinese offering fuel subsidy to major industries - how can we compete when our lot seem to be batting for the other team?

Sep 1, 2012 at 12:54 AM | Unregistered CommenterAthelstan.

http://www.ecorazzi.com/2012/08/29/matt-damons-anti-fracking-movie-has-oscar-buzz/

Lets hope Matt Damon goes to collect his Oscar for Promised Land.
Then in his interviews and Press conferances afterwards he can explain why he made a film attacking a Technology that is providing the United States with a cheap abundant almost polloutionless fuel.
A technology that is because its so cheap and abundant is cutting energy costs meaning more jobs for Recession hit Americans .Creating massive Economic Growth getting millions of Americans out of poverty and back to work.

Because of Shale the US Recession hasnt become a Depression.
If Matt Damon is a committed Enviromentalist .Then why is he attacking a Tecnology that is cutting massive great chunks through the USA CO2 Emissions. Without Shale Gas Energy there wouldnt be Renewble Energy .What is backing it up keeping the lights on when the sun goes down and the wind dont blow?

Message for Clint Eastwood and Rommney from the empty chair ,Shale has saved America not Obama.

Sep 1, 2012 at 8:57 AM | Unregistered CommenterJamspid

It is a quite extraordinary piece, which would have had CP Scott turn in his grave. JS Mill too. Basically you have an educated person thinking aloud that some propositions are so important and so obviously true that only certified experts should be able to offer public opinions on them.

Its a very traditional argument for censorship. It is wrong for reasons given by century old liberalism: if its not true and cannot be argued for, it will wither on the vine. In fact, to suppress dissent simply drives it underground. The author needs to understand that there is widespread total scepticism outside Hampstead and the ?Guardian about AGW.

The more sceptics come on TV, or write inthe Guardian, and articulate their point of view, and get shot down, if they do, the faster this scepticism will be extinguished. Precisely the same thing applies to the peer-reviewe press. You can see how little success the attempts to prevent pulbication of sceptical articles has had. Because it lowers the amount of scrutiny its actually counter-productive.

Time to go back the rest of the Grauniad, which reads more and more like a funny mixture of True Confessions, Hello and the Daily Mail every day....

Sep 1, 2012 at 9:56 AM | Unregistered Commentermichel

Richard Drake
'pernicious old fossil fuel interests who are thereby putting themselves out of business. I've never understood this conspiracy theory. Please someone make this clear'
Here goes.
The man behind all this is James Smith, up until recently he was Chairman of SHELL UK.
All his working life he fought against the industry that employed him.
He was responsible for SHELL'S involvement in the London Array.
When he was outvoted and SHELL abandoned all 'renewables' except Bio-fuels, Smith moved seamlessly to become Chairman of that totally pointless Quango the Carbon Trust which still receives £22 million a year from the taxpayer to fund 'eco-friendly' activities.
SHELL UK (NOT North America or China, I must emphasise) were convinced that the 'Carbon Market' could be three times the size of the Oil market and 'invested' accordingly.
Up to a point they were right, the Carbon Market did rise to a point where it was worth $176,000,000,000.
However this is now collapsing fast and SHELL could lose a great deal of money.
If Shale Gas were allowed to take off in the UK 'Carbon emissions' would fall as in America and the appetite for 'carbon taxing & trading' would fall further.
If you doubt what I'm saying I would ask why SHELL made such strenuous efforts to stop Lord Browne Of Madingley, former Chairman of BP, now with Cuadrilla, from attending THAT meeting at No 10.
Surely Browne, an old mate of Cameron's could have given the other side of the story ?
Smith's 'work' at SHELL is carried on by his protegee David Hone, who has issued no less than 300 blogs with only two subjects mentioned, 'Carbon taxing and trading' and 'constricting fossil fuels by the use of CCS'.google 'David Hone Shell' to read them !

Sep 1, 2012 at 10:09 AM | Unregistered Commentertoad

[O/T]

Sep 1, 2012 at 10:57 AM | Unregistered CommenterAlecM

I think you will find that Obama was against fracking but permitted by several States with a Republican leaning. It is this that helps America not the tree hugging Obama.
Now we must lobby our MP's to get fracking on the way in the UK.

Sep 1, 2012 at 11:42 AM | Unregistered CommenterJohn Marshall

Great point. As long as there is capitalism and humans mixed, innovation and development and prosperity lope along together.

I ran across a company (Canadian if I recall correctly) that recently got a patent on using propane as the fracking fluid. What's unique is no water and the propane returns along with the methane. Should work for oil unless there's issue with mising oil and gasses. Touted as a "green" solution. Might even work well and cheaply. Revolutions in energy are underway. Despite the EPA, Obama, the Greenies and all those horrible windmils and solar panel.

Sep 1, 2012 at 12:03 PM | Unregistered Commentercedarhill

Remember, there is immense money tied up in carbon trading. much of government is linked to this, including all who are in favour of the Euro.

Sep 1, 2012 at 12:24 PM | Unregistered CommenterAlecM

Cedarhill: just some points to add to your post of 12:03

Using liquid propane to frac with is not new. It is extremely dangerous, which is why most major fracturing companies won't do it, and most oil comapnies don't request it. The idea is good, but the execution needs to be perfect.

It should be noted that the first frac job in the1940s (yes, its that old), involved the use of gelled gasoline. You know this as napalm. This was discontinued, as it was too dangerous.

Today, oil fracture treatments are common. Gelled Oil, in some formations, causes less damage and more production. The oil used is generally light, 32 API or higher. As you noted in the case of propane, it can be recovered and sold, recouping the cost of the fracture.

Almost all fracture treatments use gelled fluids; water, acid, emulsions, oil, propane, CO2 etc. The gelled fluid carries sand better, and opens the fracture wider, allowing the placement of more sand, which allows higher production.

Oil formations need to be water wet for optimum production. A minimum of 30% of the rocks fluid content needs to be water. If the rock becomes oil wet, production falls tremendously, as the oil tends to "stick" to the microscopic pores in the rock.

But in gas wells, dry is better. That is why surfactants are used in the gelled fluid. The soap allows greater recovery of the frac fluid. One has to be careful, though. If the interstitial water mobility
increases too much, the well will "water out", and kill itself.

Sep 1, 2012 at 12:39 PM | Unregistered CommenterLes Johnson

Thank you for your expert comment Les.

Sep 1, 2012 at 12:50 PM | Unregistered CommenterAlecM

EUROPEANS CAN BUY CARBON CREDITS FOR $4 A TON (AND AUSTRALIANS WILL PAY $23)
So Jo Nova tells us.
SHELL'S Aussie in-house Carbon Trader David Hone has now achieved one of his major objectives, the 'linkage' of the ETS (European) with the Australian one.
The opportunities thus presented are obvious.

Sep 1, 2012 at 1:11 PM | Unregistered Commentertoad

SHELL OIL & THE 'AGE OF ENERGY"
SHELL OIL funded a very,very expensive 'advertorial' series in the Daily Telegraph.
This was 'chaired' by Geoffrey Lean, but controlled by David Hone.
Ministers up to Cabinet level were involved, principally Oliver Letwin who 'advises' Cameron on 'Climate' matters.
The purpose of the series was to ensure that 'fracking' was not allowed to take off in Britain unless artificially constrained by Carbon Capture & Storage.
You may find it extra-ordinary that a UK OIL Company should wish to do this, but don't take my word for it, this is what Graham van't Hoff, SHELL'S UK Chairman wrote for the series.
'Fossil fuels will continue to play an important role , and SHELL supports government assistance for commercialising new low-carbon energy technology.
Developing ways to capture and store the Carbon Dioxide that comes from burning them is ESSENTIAL. Carbon Capture & Storage (CCS)is currently the only technology available to mitigate emissions from large-scale fossil fuel use'.
That didn't come from Greenpeace or Friends of the Earth, that was the Chairman of our largest (?) Oil company talking. Now why would he say that ?

Sep 1, 2012 at 1:32 PM | Unregistered Commentertoad

WHY CARBON CAPTURE & STORAGE IS NOT GOING TO HAPPEN
On 7th July Graham van't Hoff SHELL'S UK Chairman was telling us in the Telegraph, that CCS was ESSENTIAL if we are to burn fossil fuels.
However by 3rd Aug SHELL'S in-house Carbon Trader David Hone was saying - 'With an allowance surplus building up in the E(European)TS and a resulting low-carbon price the urgent need for commercial deployment has diminished'.
(It's all about Carbon Pricing - nothing to do with CO2 Reduction)
On 5th August the Guardian was sounding the death-knell of CCS - 'The UK leads the way in CCS Technology (no-one else is that interested) but now experts are calling the funding system flawed and fear that the few remaining projects across the country could be in jeopardy'.
Little does Hone care however, he's got his 'linkage' between the European price of 'Carbon'($4 ton) and the Australian price ($23 ton) - bags of room for manoeuvre there !

Sep 1, 2012 at 2:56 PM | Unregistered Commentertoad

Shale Gas in Europe? might be being hampered by the biggest gas seller in the world.

http://www.zerohedge.com/contributed/2012-08-31/russia%E2%80%99s-gazprom-tightens-its-stranglehold-europe-france-falls-natural-gas-wa

Sep 1, 2012 at 6:13 PM | Unregistered CommenterShevva

Shale gas in the UK is only hampered by the UK government and those who advise them (such as Hone, Smith and Hoff as above plus British Gas et al). The Government do not own these assets, they hold them in trust for the people. They should be used in the best interests of the nation and the people and NOTHING could be further from what they are actually doing which is leaving them in the ground.

Sep 1, 2012 at 7:30 PM | Registered CommenterDung

http://screenrant.com/matt-damon-promised-land--oscar-release-date/

Producers of Matt Damon Hollywood anti fracking film realised they made a mistake.Matt Damon want to raise his Hollywood profile from pretty boy action hero to serious politically aware world figure ,like his oceans 11 co stars George Clooney and Brad Pitt or rather Brad Pitts wife.
Matt Damon Promise Land was obviously a vanity project.
Problem is American recession hit audiances being lectured at by Sanctimounious Enviromentalist finger waging Hollywood A listers.Critising Fracking Shale Gas giving America cheap energy and getting America back to work. Inconveniantly Shale cuts Carbon

Producers are giving Promised Land a limited Theatrical Release in the Liberal Arthouse Cinemas. Gets the Critics and the Oscar nomintions a bit of a Buzz Then straight to DVD .They wont risk giving it a nationwide release to a hostile reception.
Clint Eastwood embarassingly rambling on at the Republican convention said " i Cried for 23 Unemployed American", The crowd chanted back"Make my Day".

Matt Damon best to go off and make another Chase em and Shoot em Jason Bourne sequal.
Matt Damon wont ever be another Clint Eastwood.

Now America has got Mitt Romney

Sep 3, 2012 at 10:26 AM | Unregistered CommenterJamspid

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