Bishop Hill Shale momentum
Sep 21, 2012 Energy: gas The momentum behind the shale gas revolution is beginning to look almost inexorable. The Institute of Directors has now come out with a report backing the large-scale exploitation of this resource:
A new report from the Institute of Directors (IoD) reveals the huge potential of Britain’s shale gas reserves, calculating the job creation, decarbonisation and economic benefits of exploiting the shale gas on our doorstep.
Britain’s Shale Gas Potential, the latest report in the IoD’s Infrastructure for Business series, explores the extent of UK shale gas, the practical and policy implications of fracking and the lessons that can be learned from the US’s experience opening up their reserves. New polling of IoD members shows that British business leaders support developing a UK shale gas industry.
Is it now only Ed Davey and the environmentalist staff at DECC who stand in the way of wholesale change?
Reader Comments (53)
The report is *much* more positive than the performance of the IoD man who was interviewed on the radio this am
The main arguments against shale explorations seem to be ...
1) It's become uneconomic in the US where the gas price has crashed.
We should be careful to avoid the over production they have had in the States, if we can maintain prices at their exisitng level for a few decades that's a bonus.
2) Wells outputs fall off faster than prospectors predicted with a few 'sweet spots' producing longer.
I assume those wanting to drill in the UK will take this into account.
Nial.
"Is it now only Ed Davey and the environmentalist staff at DECC who stand in the way of wholesale change?" Errrr.............yes! Why allow cheap energy to flow, taking vast numbers out of fuel poverty, creating thousands of real jobs, boosting growth in the economy, taking Britain out of recession, getting people back to work, boosting tax revenues, helping to reduce the nation's financial defecit? What a stupid thing to do!
I want my kids to have the things I never had:
Enough onshore supply to meet 10% of the UK’s gas demand for the next 103 years, preventing the expected rise in costly gas imports
Offshore reserves – which are harder to extract – are estimated to be 5-10 times larger than those onshore
Someday, son, all this will be yours.
Whatever happens now, a great deal of damage has been done already by this government which has literally tried to strangle shale at birth. I have been writing to my MP about this for well over a year, he is Dan Byles who appears to be Tim Yeo's lap dog in chief on the DECC select committee. At first he denied that there was a fracking ban, then he denied that shale would work in the UK and was quoting an early Reuters report as if it were the bible. Finally he adopted the most recent position which has been that there is not enough shale to bother with. The UK economy has been stagnating and the government has been claiming it has done its best to encourage growth. Strangulation at birth is not often associated with rapid growth>
I was listening to some Eco nut on BBC3 the other day (masquerading as a learned professor if something!) but she was unequivacle that any fissile fuel derived energy source MUST NOT be exploited! Of course it's besides the point that thanks the fracking in America that the level of the universes most toxic substance (Co2) had dropped!
These guys are stuck so far up their own academic rectums that they will spite any kind of fossil derived source of fuel regardless of whether that fossil fuel actually leads to lower levels of Co2 emissions!
Mailman
Our ability to secure cost effective energy has, over the centuries, improved the welfare of all mankind.
Davey and others may try, but there is just no way the genie will go back into the bottle!
You must remember this government was a putsch by the emissions' traders. DC, Clegg, Huhne and Davey won't move on shale gas unless forced to do so, otherwise they don't benefit in the way promised.
That stage is quite soon when the people tell their MPs that energy costs are too high. Today's UKIP conference is significant in that a right wing group could, allied with UKIP, force a change of Tory leader**, which would be very good because it would blow the putsch apart.
**Why do you think Mitchell blew a gasket yesterday?
I have been flipping through the IOD report and it is hopelessly short sighted:
200tcf is the reserve quoted by Cuadrilla for their single tiny portion of the UK's shale deposits. The Bowland Basin Shale seam does not start and end at the borders of the Cuadrilla license, it continues under a large surrounding area and out under the Irish Sea, plus it contains oil as well as gas.
The Bowland Shale is just one of many shale deposits in the UK, we dont have exact figures because the government will not allow anyone to go find out. This lot couldnt run a p**s up in a brewery.
I would be more enthusiastic about exploiting UK shale gas ( and I am mildly enthusiastic) if I thought that almost all the wealth it is going to generate was not for the most part going to stick to the fingers of the already wealthy. Or am I being curmudgeonly given the real (as opposed to subsidised as in windfarms) jobs that will be created?
Somehow, I do not see my energy bills going down much, if at all, as a result. However, if we can avoid having a similar glut to that in the American market and the stuff can be safely and reasonably unobtrusively extracted, exploitation will of course overall be a GOOD THING.
Sorry to be a bit of a party pooper, but I do not think it is the universal panacea it is sometimes held out to be. Experience has taught me that when something seems too good to be true...it frequently is not true.
It will kick our energy supply problems "can" a bit further down the road, I suppose. Perhaps we could funnel some of the tax generated by it into more nuclear research?
That said....Drill, baby drill!
You are all going too fast!
We have to wait until Clegg and his wife, Cameron/Camerons pa' in law get their money out of moving air and into gas.
They and their friends believed their own lies, and so are lagging behind.
They need time to get on board the next gravy train
Jack
When this government removes its head from its rectal orifice you will find that we have enough natural gas from shale to satisfy all our needs for about 250 years and it does not end there.
Methane hydrate deposits constitute the largest source of fossil fuel on the planet, exceeding all other fossil fuels combined many times over, we have large deposits along our coast lines. Methane hydrates will supply us for several thousand years.
If the fossil fuel ever runs out then we have enough Thorium to power cool running, none meltdownable nuclear power stations for about 20,000 years (waste from these is safe within a few hundred years)
Splash out, turn a few lights on ^.^
The problem is - that this solution is just too simple.
Oh - and of course it completely b*ggers up all the carefully laid plans of the wind-lovers....
Let's assume that Davey is not a complete idiot. Nor that he cannot read the political runes.
And also note that the Lib Dem conference is imminent. Assuming that he can get through that relatively unscathed, then he has a year to get things moving...or the inevitable political forces will roll all over him.
So watch this space and be patient.
David; there are investigative journalists researching the climate fraud whereby the elite, using Green and Red politics as cover, also the Mafia, attempted to gain an oligopoly over energy. This was what was written about Oxburgh after the fake CRU investigation: http://wattsupwiththat.com/2010/04/25/global-warming-the-oxburgh-inquiry-was-an-offer-he-couldnt-refuse/
One thing to remember is there actual people who want an energy supply crisis because they hope that will give them the chance to get their political goals , which otherwise would stand no chance , adopted while for some such a crisis would fitting 'punishment' for human' treatment of the planet . So there really those out there that will oppose shale or other sources because they want an energy crisis not because they think it will be bad for the environment.
Will Davey find out how cold and lonely the corridors of power are when the winds of change blow through?
Call for Josh!
I've posted this before but I'll keep doing so as nothing I've ever read illustrates quite so neatly what we're up against.
It's from a BBC programme from 2010
"Solitaire Townsend runs a city PR firm, but one
which specialises in communicating a single issue:
sustainability.
TOWNSEND: I was making a speech to nearly 200
really hard core, deep environmentalists and I played
a little thought game on them. I said imagine I am the
carbon fairy and I wave a magic wand. We can get rid
of all the carbon in the atmosphere, take it down to
two hundred fifty parts per million and I will ensure
with my little magic wand that we do not go above
two degrees of global warming. However, by waving
my magic wand I will be interfering with the laws of
physics not with people – they will be as selfish, they
will be as desiring of status. The cars will get bigger,
the houses will get bigger, the planes will fly all over
the place but there will be no climate change. And I
asked them, would you ask the fairy to wave its
magic wand? And about 2 people of the 200 raised
their hands."
Just for anyone who thinks Shale is unstoppable. The CAGW crowd's primary mission isn't to cut CO2 emissions.
And for the Anti-Tremblers;
http://www.quakes.bgs.ac.uk/earthquakes/recent_uk_events.html
Stuck-record
Absolutely right mate and it links right into Lord Deben when he was interviewed for his job as chair of the Committee on Climate Change. He actually said that we didnt need to think about Climate Change because we need to do all those things anyway for sustainability reasons.
Dung
I think 200tcf was the BGS's figure for onshore resource. Cuadrilla is smaller than that IIRC.
I beg to differ boss, Cuadrilla figure is indeed 200 tcf. That is why I am saying that the IOD figures are rubbish.
(for non aficionados: tcf = trillion cubic feet)
For those interested in Solitaire Townsend the program is at http://www.bbc.co.uk/programmes/b00q3cnl with a transcript at http://news.bbc.co.uk/nol/shared/spl/hi/programmes/analysis/transcripts/25_01_10.txt
In Austria, OMV have thrown in the towel on fracking.
They have a bore-hole just up the road from where I live - they would have had to sink 130 million Eur into the project. They reckon that there are gas supplies to make Austria self-sufficient for 30 years when it eventually came on-stream in 2020, but the costs ( and the hassle I suspect ) are too great.
Your Grace asked:
Is it now only Ed Davey and the environmentalist staff at DECC who stand in the way of wholesale change?
No, it is not. In the United States a large group of "artists" (i.e. pop musicians) including Yoko Ono and her and John Lennon's son Sean Lennon, have started a campaign against fracking.
Celebrities Campaign Against Fracking
http://shalestuff.com/controversy-2/celebrities-campaign-fracking/article02987
To Solitaires credit she was shocked by this..
John Barrett
I would be really interested to know the reasons why OMV pulled out of fracking? On August 31st the Bish posted a an article about a new fracking system called Highway that had knocked a huge chunk of cost out of the process.
I had to try out a few articles, but this seems to be the cause :
Grund dafür ist eine Gesetzesnovelle, die für jede Schiefergas-Probebohrung eine Umweltverträglichkeitsprüfung vorschreibt. Weil der OMV damit die nötige Klarheit fehle, ob die kostspieligen Projekte auch umgesetzt werden könnten, rentiere sich das Vorhaben nicht mehr, erklärte der Konzern.
There's a new law that means each Shale Gas test-bore needs an environmental-tolerance study. Because OMV cannot be clear whether the expensive project is also economical, then the scheme simply isn't profitable enough any more.
John
Sounds totally political to me but then I am a conspiracy theorist climate denier hehe
Yes, there's the usual opposition which has a website
www.weinviertelstattgasviertel.at
which uses as its "evidence" the film "Gasland" and local citizens' initiative as well as opposition from the wine producers. The law requiring the environmental studies was passed in July and basically I suspect that OMV simply can't be bothered with the hassle.
HuhneToTheSlammer: The IOD guy on Today this morning was definitely playing it carefully - when what was wanted was robust comment. That said, I certainly got the feeling that he was being very careful about the answers he gave to some of Humphries's stupid questions. He (JH) even brought up the old saw about the water in our bathroom taps catching fire!!
When the chattering classes manage to move on from this sort of stupidity we may get somewhere. However, I get the feeling that BG, among others, is a major lobby group against shale as it will hit the prices of their product and force their profits down.
Stuck-record
I am also in danger of becoming something of a "stuck record" as well because I have been repeating at every chance I get for at least the last 10 years exactly what you and KnR are saying: this is not and never has been about the science. From the very beginning it has been eco-politics. The eco-luddites are not interested in global warming, global cooling or anything else. As far as they are concerned CO2 was a heaven-sent opportunity to pursue a cause which they have known for decades does not and never will command the support of even a substantial minority, let alone a majority, in any democracy in the world.
It may be that the greenies are simply useful idiots for an even more committed bunch of what Delingpole calls watermelons whose ultimate aim is the destruction of the economic power of the West and its enslavement by assorted totalitarians from the South and East but meanwhile I think we'll apply Occam's Razor to that hypothesis.
You are right to publicise what might well be called "The Townsend Manouevre". Though the sample size was small the overwhelming response in one direction might make it meaningful. Perhaps a statistician could help out.
Mile; what I despise more than any other factor is that 1000s of students in climate courses here and in other countries have been deliberately taught fake science to add to the votes for the scam. And in the CG emails the people at CRU actually boasted of this when they referred to the lecturer, soon to retire, whom they despised for teaching correct physics.
@Dung
This has been hashed out before. Please read the comments on http://bishophill.squarespace.com/blog/2012/5/21/cuadrilla-were-not-at-no-10-seminar.html . A bunch of people, including Doug Proctor in that thread, have been pretty emphatic that no more than a fraction of Bowland's 200+ tcf of GIIP can possibly be recovered: a useful fraction can be recovered at a useful price, but nothing near 200 tcf. Do you believe he is seriously wrong in this? If so, why?
I'm pretty sure that 200 tcf was an estimated resource. The last time I looked at Bowland sales material, I got the impression that the sellers were carefully avoiding giving any kind of estimate of the reserve.
"When this government removes its head..." --Dung
Proctocraniosis (as we refer to it here) is treatable:
http://www.johnernst.com/sight_windows_p50.html
Simply insert in umbilicus. Some surgery required, but sight will be partially restored.
Worth taking a look at the medium to long term here - It seems likely that the Lib Dems will hang on to that ministerial place until the next election, and as long as they do policy is unlikely to change unless they fall out with the Tories in which case nothing will get through in terms of legislation anyway.
On current polling it is unlikely the Tories will win power next time and may not even be part of any coalition so Labour will either have total or partnership power - unless of course someone finds the photo of Ed Milliband torturing a kitten and publishes it in the Sun.
Labour love anything green and hate shale so the policy won't change there either.
As for UKIP, I have more chance of getting my banana covered in salad cream and wrapped in a photo of Normal Tebbit into a photo of a topless royal published in Italy before UKIP will get anywhere.
Artists against Fracking. Isn't it marvellous that these celebrities take the time to campaign for us little people against these evils. No wonder the media listen to them rather than scientists, engineers etc. who actually know what they're talking about.
Just got back from the UKIP Conference. Roger Helmer was brilliant on CAGW, Shale Gas and Windmills.
Oh for a UKIP Government !
However AlecM has hit the nail on the head -'Emissions Traders'.
David Hone and his gang of Emissions Traders inside SHELL, who realise that the 'Carbon Market' will be three times the size of the Oil Market, aren't going to let anything stand in their way.
Whatever anyone else can afford to lay out, you can add 3 noughts to even approach what SHELL are prepared to spend.
A market worth $176,000,000,000 and on the rise again ? Not to be sneezed at.
Also don't forget that James Smith, SHELL's original 'Carbon Emissions Trader' is now Chairman of the Carbon Trust a totally pointless Quango, still being given £44,000,000 a year of taxpayers' money, for the sole purpose of promoting Offshore Wind.
The real Elephant in the room!
Warning a bit moralising coming up.
http://www.youtube.com/watch?v=N-iihQOxBkk
For all the Echo Guilt Rich Celebrites and the the Fat ones .Has Lady Gaga ever heard the expression Heat or Eat.
For Most people in the world Shale Gas will save a few Quid off their Electric Bills.Unfortunatley for most people a few quid is all they have got in the world.
Dung and Bishop and Cuadrilla reserves.
Surely the Cuadrilla 200 TCF is a gas-in-place estimate rather than recoverable (to compare, the massive Dutch Groningen gasfield, an utter giant which set off the North Sea saga and still dwarfs most other gas fields has estimated ultimate recoverable reserves of about 96 TCF).
The industry work volumetrically with both calculations of in place and recoverable reserves using the term informally. There is and always has been endless confusion and misunderstanding, particularly in the press, confusing one with the other about oil and gas 'reserves'. It is prudent therefore to be very wary anytime just 'reserves' is used, instead of with the qualifying 'in place' or 'recoverable' explanation, even though the strict definition of reserves refers only to volumes that are economically and technically recoverable, with further subsections of proven probable and possible recoverable reserves. These are strictly defined, are quite rigorous as they are the basis for independent annual audits of corporate assets.
Conventional oilfields range in recovery factor between about 5 and 60 %, exceptionally higher, depending on reservoir quality, connectivity and drive mechanism. Conventional gas fields may get up to 90% recovery in some cases. In all cases the recovery factor is uncertain until the field is fully appraised, therefore the recoverable reserve is also very uncertain in early days.
Shale is in effect a very poor (ultra-low permeability) reservoir so inherently has a very low recovery factor (basically zilch until fracked) for a single well, but close pattern drilling can raise this up significantly, depending on the well and project economics, which is obviously highly cost/ productivity sensitive. Intuitively, it demands a decent rate of return ie a decent and contractually assured gas price and confidence that the political risk (of rug-pulling) is low.
Ed Davey is passing on his knowledge at the Telegraph.Snippet below.
" Businesses face different energy costs, and we are sensitive to the needs of the most energy intensive users. No-one wishes to drive industries overseas or simply outsource emissions. That is why, as Ms Lea notes, the Government is working with energy intensive industries to draw up a package of financial support.
Green policies currently add between 3pc and 12pc to the energy bills of the most energy intensive industries. The UK ranks well internationally for industrial gas prices, with the lowest prices in the EU 15 since mid-2009. And while it ranks less well internationally for industrial electricity prices, the Government’s package of support will be designed to help those electro-intensive users whose international competitiveness is most at risk. Why have other countries managed to cope with volatile wholesale prices? Perhaps one answer is that their energy systems are more diverse. The reason we are starting from a ‘crucially low base’ on renewables is that we are so far behind: Germany will get 35pc of its electricity from renewables by the end of this decade. And our target isn’t just about emissions; it’s also about building an energy mix that can iron out price volatility, ensure security of supply, and bring on new technologies. Our current reforms to encourage low-carbon energy will reduce the UK’s exposure to oil and gas price shocks by 30pc in the next eight years. "
http://www.telegraph.co.uk/sponsored/earth/statoil/9552515/ed-davey-boost-energy-industry.html
Anonym et al
I have not once used the word recoverable because that figure can not be known until production starts. However the IOD report was not talking about recoverable reources either, they gave a UK figure for resource and that figure was wrong which is what I have said.
If you want to know anything about the resources in Cuadrilla's license then you have to look here:
http://www.lucas.com.au/files/ASX-Announcements/ASX-2011-12/AJL_European_Shale_Assets_Update_100512.pdf
Cuadrill is a private company and is not required to divulge any information it wants to keep private. However A J Lucas owns 42% of Cuadrilla and as a Limited company is required to give details about its assets, all the info about Cuadrilla is on this website.
Anonym et al
I have not used the word recoverable since that figure only becomes clear once production is underway. However the figures given by the IOD/BGS were not recoverable resource either, my figures are comparable with theirs.
It is not possible to see the figures for the Cuadrilla resources on the Cuadrilla website, they are a private company and keep some stuff to themselves. However A J Lucas is a listed company and owns 42% of Cuadrilla so if you go to their website you get all the info:
http://www.lucas.com.au/files/ASX-Announcements/ASX-2011-12/AJL_European_Shale_Assets_Update_100512.pdf
Mick J
One wonders why politicians lie about stuff even when the truth is staring them in the face. I assume they think that nobody else knows any different. If Germany is going for renewables then why are they currently building 20 new coal fired power stations (and they will be burning Lignite, the dirtiest coal of the lot)?
Please note that Germany does not have CCS available either ^.^
Barry Wood
quote
To Solitaire's credit she was shocked by this.. [revelation that climate change prevention is not the motivation of those who employ her firm.]
unquote
I would have more sympathy with the delectable Solitaire if she showed any sign that she understood the damage she has done to the environment and the number of people who have died because of her professional expertise. She has helped sell the meme of CAGW while the old grow cold, the poor grow hungry and the planet's jungles have been razed to provide biofuels in place of petrol. And all in the service of faulty and biased science.
Shame on her, shame on her company. One day she will have to repent.
JF
Dung
http://blogs.shell.com/climatechange/2012/09/quest/
'Germany does not have CCS either'
of course they don't. Nobody has CCS because it cannot possibly work.
In this piece from David Hone (Shell's Emissions Trader) is trying to kid everybody that it's going to work in Canada.
It won't because it can't !
The CAGW crowd are clearly terrified of the implications of shale. Read Geoff Lean's borderline hysteria in his latest column in th Telegraph. Quite astonishing.
http://www.telegraph.co.uk/earth/energy/gas/9557916/The-Tories-are-clean-out-of-their-mind-to-want-new-gas-plants.html
@Pharos
Probably the IoD's use of 'reserves' can just be counted as sloppiness, because it does go on to consider what percentage of the "reserves" (ie. resource) is recoverable. Probably a more serious issue is that it seems you'd have to read the IoD presentation very closely to get any indication that that miraculous plunge in gas prices pushed them well below the break-even point for the shale-gas producers. Surely a seriously naughty omission, and not one that's very difficult to spot.
Stuck-Record
Astonishing indeed! well at least he gets both barrels from his commenters:
I have to think he does not read them anymore hehe.
toad
The link didnt work but I found it in his archive ^.^
These guys continue to find ways of spending our taxes on schemes which achieve nothing apart from making them richer.
Reading his article made me wonder what would have happened if the CAGW crap had started before we began drilling for oil and gas in the North Sea?