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« Your funding bonanza for greens | Main | Global warming overestimated by factor of two »
Saturday
Feb092013

Shale - more than we thought

The Times seems to have got sight of the British Geological Survey's new estimates of Britain's shale gas resource. The  previous figure of 1000 tcf, widely pooh-poohed by greens, has been upped to between 1300 and 1500 tcf. Current demand is about 3tcf per annum.

It's only fair to note that not all of this will be extractable and the Times suggests a figure of 20% might apply with current fracking technology. That would be around one hundred years' supply.

I recall Roger Harrabin's tweet back in October:

RHarrabin Belatedly, via @zacgoldsmith, the relatively meagre reality of UK shale gas deposits. http://t.co/RUUJj0rN

The flow of good news continues unabated. Read the whole thing here.

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Reader Comments (73)

Article refers to "dozens of tremors"?

Feb 9, 2013 at 9:51 AM | Unregistered CommenterJohn Page

Seems to me that Ed Davy and the sycophants he has surrounded himself with are a major part of the problem to removing the road block that's stopping the fracking revolution from getting under way.

Mailman

Feb 9, 2013 at 10:07 AM | Unregistered CommenterMailman

Always good to remember that the BGS records seismic activity before the eco-worriers start on 'unprecedented' claims.

Feb 9, 2013 at 10:10 AM | Unregistered Commenterssat

Indeed, there were only two earth tremors.
http://www.cuadrillaresources.com/protecting-our-environment/seismicity/what-happened/

Feb 9, 2013 at 10:24 AM | Registered CommenterPhillip Bratby

They seem to be wrong (lying) about everything.

Feb 9, 2013 at 10:31 AM | Unregistered Commenteresmiff

In fact in a previous article at The Times dated Dec 13 2012, one of the authors (Tim Webb, Energy Editor) only mentioned the two tremors that occurred in 2011. Have these people no memory or no ability or are they just out to be deceptive?
http://www.thetimes.co.uk/tto/business/industries/naturalresources/article3630054.ece

I'm sure most people reading here remember that only two tremors were recorded, and we are not Energy Editors who would be expected to remember such details, or have them at our fingertips.

Feb 9, 2013 at 10:36 AM | Registered CommenterPhillip Bratby

Even this increased estimate is likely to be shown as conservative. The whole history of shale - where its development is permitted - is one of resources, rates of recovery, costs and time to production all turning out to be better than forecast. For example, recoveries of 40% are now being projected in some areas and costs are on a downward trend with faster drilling, more wells per pad, etc..
And where there's gas, there might well be oil.....
wrt tremors, there have been a couple of reports lately of small tremors in the Midlands which were stronger than those linked to Cuadrilla last year - and no mention of damage or concern.

Feb 9, 2013 at 11:10 AM | Unregistered CommenterMikeH

Presumably these estimates only refer to that which lies below the land and do not include what may be accessible from our coastal waters. If that is true then the energy security argument goes out the window (if it hasn't already).

Feb 9, 2013 at 11:27 AM | Unregistered Commenterssat

Tweet the facts back to him, liberally sprinkled with colourful invective, of course.

A coprophagy reference, or two, certainly couldn't hurt, or be wide of the mark =)

Feb 9, 2013 at 11:30 AM | Unregistered Commenterchippy

What is the betting that the German politicians scoot past Davey and chums before the year is out? Before placing your bet, read this article in Spiegel online:
http://www.spiegel.de/international/germany/berlin-wants-to-end-moratorium-on-fracking-in-germany-a-882313.html

Feb 9, 2013 at 11:33 AM | Unregistered Commenteroldtimer

Where's Kevin Bacon when you need him?

Feb 9, 2013 at 11:40 AM | Unregistered CommenterAlecM

Both the USGS and BGS state that it is impossible to be certain that a small quake was either natural or fracking based. the UK gets about 200 quakes per DAY, all below 2.5R most around 1.5R or below. This is like a lorry driving past 100 meters away. Most quakes are from fault movement of unknown faults. In fact the first time an unknown fault is discovered is from a minor quake.

Feb 9, 2013 at 11:53 AM | Unregistered CommenterJohn Marshall

I live on the Fylde coast, within 5 miles of the site and it was 2 weeks before I even learned there had been a couple of tremors!
In contrast, I'm very much aware every time a bus or other large vehicle goes past my shop as everything shudders, sometimes really quite alarming actually.
I say let them get on with it, we need the gas.

Feb 9, 2013 at 11:54 AM | Unregistered CommenterMeIKnowNothin

quote
Article refers to "dozens of tremors"?
unquote

I thought it was two. Anyway, I have asked my MP to enquire of DEFRA, which has applied a red-light level of 0.5 MMS on the max permitted tremor during fracking, if the same level will be applied to CCS experiments. Also, they are going to get back to me with the number of these 'microquakes' (which is a much friendlier name for these imperceptible movements) the UK gets every year. The BGS graph doesn't really go below 1 and extrapolating by eye makes me think there must be hundreds at least.

My MP told me a year or two ago that one of the big reasons for wind power was to prevent a balance of payments problem caused by fuel imports: I cannot stress too highly that the only way to influence the government is to make MPs frightened of unemployment. we should all be demanding that energy policy be altered. Don't put it off, write. And you can ask about troughers with windfarm jobs.

Anyway, if 20% of the EU budget is really wasted on renewables then abandoning the green scam would be another big saving, especially as we pay more than our fair share of EU money.

Now watch the greensters trying to talk the bonanza down.

JF

Feb 9, 2013 at 1:24 PM | Unregistered CommenterJulian Flood

I like a bit of accuracy. Heating homes is one of the uses of gas. The major use is for electricity production. If gas became the dominant form of electricity generation - a wise move there are huge supplies available - then current consumption would rise from around 2.8 to 5tcf. 1500 to 1700tcf of deposits, with 10-20% recoverable would, mean the UK could have cheap supplies of power from shale gas for only 30 to 70 years. This is a still a phenomenal advance on the 14-18 months previously estimated, and should be added to the UK reserves of "conventional" gas. It just goes to show that shale gas can be evaluated in the proper contexts of total national energy policy - cost, security of supply, and environmental impact. This is in contrast to wind turbines which exaggerate the "positives" and evade the "negatives" of all three aspects.

Feb 9, 2013 at 2:05 PM | Unregistered CommenterManicBeancounter

"Ed Davy and the sycophants"

That sounds like a 60's pop group!

Feb 9, 2013 at 2:16 PM | Unregistered Commentergraphicconception

I think our only real hope of shale getting off the ground is it being exploited commercially in Germany. Once the gates are opened by the Bosch it would then be an open race to begin exploitation everywhere else.

But dont you guys think that its borderline criminal negligence that we are doing absolutely nothing to reduce the economic threat Russian gas poses to our economy and our country? Actually, it seems that everything we are doing like allowing existing power stations to be decommissioned coupled with an over reliance on windmills and mirrors only makes us more dependant on energy imports from "enemy" states.

The fact that clowns like Ed Davey continue to wilfully obstruct the UK's best chance at energy independence should be reason enough clowns like him get strung up first...at the next election. Sadly, it seems that come 2015 all we are going to do is swap the existing lot of clowns for a new bunch of clowns who's mummies and daddies were once hard core commies!

Regards

Mailman

Feb 9, 2013 at 3:00 PM | Unregistered Commentermailman

Don't get too excited. That 20% is how much is technically possible to extract. It says nothing of how much it costs or how much people will put up with.

If you imagine that one well of around 3000m length drains an area of about 15000 square meters (5 meter spacing of wells) and the area of even 1% of the UK land mass is 2,500 square km (about the area of Cheshire), you'd have to drill over 150,000 wells (from maybe 15,000 pads) to cover that area, assuming you only drill at one level (and since people are excited that the UK shale beds appear to be "thick", that seems unlikely). If you guess at a cost of £1-2million per well, that is £150-300 billion. And where is all of the water and sand needed for fracing etc going to come from and how does it get to those wells? And what about all of those public enquiries... Dream on!

Feb 9, 2013 at 6:06 PM | Unregistered CommenterBitBucket

I live in Nottinghamshire, past goverments have had no problem with mining subsidence destroying property in the area of the mining activities, residents accepted this as long as they were compensated for the damage.

Feb 9, 2013 at 6:11 PM | Unregistered CommenterRob

BB, we don't need it all at once. If it is 100year's supply, a small proportion of those wells need to be running at any time. Then there's a hundred years of progress in recovery. If it pays (and that depends largely on events elsewhere) this is good news. I put it to you that you don't want this to be good news, otherwise you would not have bothered to put up a patently silly argument.

Feb 9, 2013 at 6:43 PM | Unregistered Commenterrhoda

Rhoda, looking at the map in the article it looks as if the shale deposits you are excited about cover about half of the UK by area. So to get your 1% reserve extraction per year (if you want 100 years of supply from your 1500tcf at 20% extraction, 3tcf per year use) you need to extract everything (ie the 20% technically possible) from 0.5% of the country's land area per year. Now I was talking about 1% of the UK land area, so divide my numbers by two. Are you still sure it is such a silly argument? I'm talking averages of course and the distribution of gas is not likely to be uniform. If you can find the rich deposits that makes things cheaper; if you can't, or they turn out to be underneath heavily inhabited areas, it does the reverse. Also the gas flow is not steady whcih again complicates things. Maybe I have the numbers wrong, but from what I can see, your dream of game-changing flows of gas just wont happen.

It is not that I don't want it to be good news, rather that I just don't believe it. Certainly for anyone affected by the drilling it will not be good news. Any revenue it generates for the government will be frittered away. And I can't see it affecting world gas prices.

Feb 9, 2013 at 8:09 PM | Unregistered CommenterBitBucket

This is the great thing about shale BB...not one single penny of tax payer money needs to be spent on supporting or even encouraging companies to get involved in extracting gas.

Let them drill and drill now and get the gas out. IF it doesn't work as you so very dearly want it to not work then those companies that invested their own money and their investors money lose and only they lose. BUT if they extract the bountiful supplies everyone, except the catastrophiliacs, expect then its a open season for the country and a major financial boom for the drilling companies and their investors!

In fact the only people who have anything to lose here are the catastrophiliacs who are determined to continue to see around 40,000 fair between December and march due to cold related issues because let's make no bones about it...shoukd shake be allowed to succeed then prices WILL come down and cold related deaths will tumble with it.

Mailman

Feb 9, 2013 at 8:24 PM | Unregistered CommenterMailman

The apocalyptic obsessives are going to be most displeased as once again the Earth proves to be more bountiful and resilient than their misanthropic wishes.

Feb 9, 2013 at 9:27 PM | Unregistered Commenterlurker, passing through laughing

There is an order of magnitude more coal under the North Sea than current world proven reserves of coal.

Coal Seam Gas is already a major source of gas here in Australia and it's only a matter of time before technology unlocks the gas in the N Sea coal, never mind extract the coal itself.

http://www.energybulletin.net/stories/2005-12-28/3000-billion-tons-coal-norways-coastline

Feb 9, 2013 at 9:42 PM | Unregistered CommenterPhilip Bradley

Mailman, did you read the numbers? Are they wrong? They might well be; they do seem huge. But if they are even vaguely right, £100bn a year to drill enough wells to get 3tcf anually is coming on for 10% of GDP. Who has that sort of money to invest in UK shale?

Only the companies involved will pay? It is not possible to drill tens of thousands of wells a year without someone paying in terms of externalities. If it is only repairing roads and other infrastructure damaged by all of the extra traffic I would be surprised. I can only hope that the drilling and fracing is done in your back yard and that of fracing's boosters.

Feb 9, 2013 at 10:32 PM | Unregistered CommenterBitBucket

"It's only fair to note that not all of this will be extractable and the Times suggests a figure of 20% might apply with current fracking technology."

Of course, 0% was extractable with the technology of only 20 years ago.

Feb 9, 2013 at 10:58 PM | Unregistered CommenterEd Fix

Bitbucket wrote

quote
If you imagine that one well of around 3000m length drains an area of about 15000 square meters (5 meter spacing of wells) and the area of even 1% of the UK land mass is 2,500 square km (about the area of Cheshire), you'd have to drill over 150,000 wells (from maybe 15,000 pads) to cover that area, assuming you only drill at one level (and since people are excited that the UK shale beds appear to be "thick", that seems unlikely). If you guess at a cost of £1-2million per well, that is £150-300 billion. And where is all of the water and sand needed for fracking etc going to come from and how does it get to those wells? And what about all of those public enquiries... Dream on!
unquote

What do you mean by 'five metre spacing'?

As I understand it, a well goes down into the shale and then turns sideways, fracks and extracts gas. It then goes sideways in another direction, until the thing looks like the spokes of a wheel. Then it goes down a few tens of metres and does it again. You end up with a series of spoked wheels, one on top of another, each being drained of gas.

When you write 'it seems unlikely' that drilling will be only at one level, your implication is that this will be a bad thing. Why? It will be cheaper to drill down just a little more having reached the shale, so your figures about cost per well (and number of wells required) are nonsense. The UK shale is very thick and the advantages of multi-level fracking will be correspondingly great.

More interesting than your bogus figures is your hangup about good news: is it the CO2 nonsense? Relax, shale gas is a low CO2 fuel and reduces coal carbon emissions -- the US is back to 1970's levels already, and that's before the widespread use of shale gas in transport. And it cuts black carbon pollution. Wow! Even a rabid green must welcome that.

The water used to frack a well is the amount which falls each year on three football pitches. Doesn't seem too scarey when you think of it like that.

No, the only reason I can see for your doomsaying must be financial. Gasprom stooge? You fit the profile.

JF

Feb 9, 2013 at 11:11 PM | Unregistered CommenterJulian Flood

BB,

Where do you get it that only the Government can provide the funding for drilling?

Actually, I'd be all for it if they diverted every single penny that's being pissed away on windmills and mirrors to generate exactly zero percent energy when it's most needed, you know when it's cold and dark.

Secondly lets just assume the numbers you just pulled out of your rectum are right. No bother, the EU just set aside billions for green projects abd let's face it, they don't come much greener than fracking!

Regards

Mailman

Feb 10, 2013 at 12:42 AM | Unregistered CommenterMailman

Julian, shale drilling and fracing is more complicated than you think. The 5 meters I referred to is from this talk by someone who knows. He talks about drilling a well, then moving 17ft (about 5m in modern terms) and drilling another. If you look at pics of shale wellheads they are in neat, regularly spaced, lines. He also talks about drilling according to fault lines, not in a nice circle (gold star for artistic effort though!). He doesn't mention drilling at different depths. I imagine you can't just use the same vertical because that's been drilled and then expensively cased with the casing cemented into place - the drill will no longer fit!

I don't suggest that multilevel drilling is bad in itself. If the gas is at the same density throughout a thick seam as it is in a thin seam (which might be a reasonable guess, but then again it might not), then clearly it makes sense to drill at mulitple levels. But if the same quantity of gas as is found in a thin seam is distributed over a thick seam, then you have to drill multiple levels just to get the same amount of gas. It all depends... If you know the answer to that one, I'm sure there are people who want your services.

Regarding your football pitches, ever tried to capture the water falling on three pitches? Thought not! That water has come and gone - you have to get it back from somewhere. And then you have to deal with all of the dirty water that comes back out ouf the pipes - and you can't just pour it down the drain.

Watch the video. It is 1hr45m but worth the effort if you want to learn about fracing. The speaker is not anti-fracing, he's an insider.

Mailman, I didn't mention government funding - you made that up. The EU has just agreed a budget of around 1tn Euro for 7 years. That's about the cost of fracing for seven years according to my numbers above. Do you think the numbers are wrong? I'm not wedded to them - you can see how I obtained them. If they are wrong, correct them.

Feb 10, 2013 at 1:37 AM | Unregistered CommenterBitBucket

Note that the 5m spacing is at the drill-head. The spacing of the horizontal parts of the wells might be more than 5m. In that case, fewer wells are needed to cover the same area and the cost falls. On the other hand, the speaker mentions a cost of $4m per well. As things are likely to be more expensive in the UK the figure there is lkely to be higher, so my £1-2m is probably on the low side.

Feb 10, 2013 at 2:24 AM | Unregistered CommenterBitBucket

If my calculations are right (ALERT!) the gross number cited (1500 tcf) is about 250 billion barrels of oil equivalent (BOE). The estimated recoverable is 50 billion BOE. UK's annual oil consumption is about 250 million BOE. Coal and nuclear energy requirements are probably of the same magnitude. It appears that fracking could satisfy all of the UK's energy needs for 100 years.

Feb 10, 2013 at 4:11 AM | Unregistered CommenterNeil Ferguson

@MikeH

Even this increased estimate is likely to be shown as conservative. The whole history of shale - where its development is permitted - is one of resources, rates of recovery, costs and time to production all turning out to be better than forecast. For example, recoveries of 40% are now being projected in some areas and costs are on a downward trend with faster drilling, more wells per pad, etc..

Being projected? In some areas? Those words are actually very important if you understand what they mean. For that we have to look to the US where decent profits are to be had in the core areas of the best shale formations. The problem is that those are less than 1% of the total resources and the lousy economics for the average shale well, which is not self financing. That means that the fools on the left are mostly right but for the wrong reasons. Shale is not any more a solution than their foolish renewable energy schemes.

In the real world the data actually matters. And as long as the American 10-K filings keep showing exploding debt, negative cash flows, and serious funding gaps the shale dream is likely to turn out to be a bubble. I ask that those that disagree with my claim that shale is not economic produce an SEC filing that proves otherwise. We have had shale production for years now and given the depletion rates a few years are all that we need to see decent returns. Since we haven't had any I suggest that shale is still a lot of wishful thinking.

For the record, we will not have to wait very long to see that what I claim is correct. Shale gas drilling has now fallen and the backlog of drilled wells waiting to be fracked is likely between 6 and 12 months. We should see a material decline in shale gas production around 12 months after the backlog is cleared. And let us point out that if supply reductions cause prices to go over $5 all of those coal plants that have switched to gas will go right back to coal. That means that companies will still lose money because the marginal shale well needs north of $7.50 per Mcf to make sense.

Feb 10, 2013 at 4:22 AM | Unregistered CommenterVangel

It appears that fracking could satisfy all of the UK's energy needs for 100 years.

Only if you are not paying attention. The shale gas producers in the US have been destroying capital. Keep in mind that they have the much better infrastructure to support shale production and should have access to significantly cheaper oil services. The average American shale well is not self financing. That means that the average UK well is probably as equally bad an investment as its American counterpart.

Feb 10, 2013 at 4:26 AM | Unregistered CommenterVangel

Bit Bucket wrote:
quote
The speaker is not anti-fracing, he's an insider.
unquote

Inside what? Gasprom? Dr. Ingraffea is an anti-fracking zealot. Nothing wrong with that, of course, he and you are entitled to hold an opinion on this matter -- provided that you and he don't make things up.

Tell you what, after watching Dr. Ingraffea's Chicken Little video, people can read

http://www.eidohio.org/a-failure-to-communicate-cornells-dr-ingraffea-comes-to-youngstown/

(There's an interesting image of a casing with multiple layers of cement and steel -- I hadn't realised that the industry standard was so rigorous)

and/or spend a few interesting hours reading No Hot Air, a blog about UK shale.

Then do some counter research and watch the ultimate Chicken Little propaganda video, Gasland and the counters to that. Even the man who made Gasland admits he made stuff up.

quote
But if the same quantity of gas as is found in a thin seam is distributed over a thick seam, then you have to drill multiple levels just to get the same amount of gas. It all depends... If you know the answer to that one, I'm sure there are people who want your services.
unquote

You know why there is gas in shale? No? It's because the gas can't leak from layer to layer, or move within a layer, as the rock is impermeable and the gas is generated in situ. So when you frack you just release the gas within the fracked volume. So the hugely thick deposits (see No Hot Air for a fascinating graph of how the UK shale compares to the US shales, and a breakdown of how many wells will be needed to drill the thick shale -- the site is searchable) are ideal for stacked spokes. Or not, of course, that's what gas firms are paid for. They drill at no expense to taxpayers, then if they find gas they make money and pay tax. Win win..

You don't have to collect the water from three football pitches BTW -- the world does that for you. And it collects all the other football pitches of rainfall. Fracking a well uses a tiny amount of water compared with the amount that falls, that's the point. Next you'll be measuring it in millilitres and shouting about the huge numbers. Or protesting about a microquake which no-one has felt but the loon in charge of energy policy feels justifies stopping the extraction of wealth direct from the ground.

quote
if [] they turn out to be underneath heavily inhabited areas
unquote

The USians are fracking under Austin, Texas. Let me say that a different way. The notoriously litigious Americans are being fracked without finding a reason to sue, in spite of the fact that they will sue at the drop of a writ if they think they've found a way of gouging someone for cash. That's the _USians_ who have lawyers like other countries have vultures and hyenas, drilling under inhabited areas. Perhaps you are exaggerating the problem.

Thank you for giving me the chance to reference Nick Grealey's blog -- there's a man with a vision who sticks to the truth and has been proved right over and over again. Next time you tell people to watch propaganda videos, perhaps you'd be kind enough to reference No Hot Air as well, thus saving me the trouble. Thanks.

JF
That's http://www.nohotair.co.uk/

Feb 10, 2013 at 5:13 AM | Unregistered CommenterJulian Flood

Vangel

We've heard this from you before and you are not convincing anyone. Please desist.

Feb 10, 2013 at 8:22 AM | Registered CommenterBishop Hill

Choice a few small earthquakes no actually notices .Or the SAS on standby in case they have to go out and rescue British BP workers from Islamic Extremists in Africa or the Middle East.

Feb 10, 2013 at 8:56 AM | Unregistered Commenterjamspid

Bish,

Are you sure Vangel and Bitbucket arent one and the same person? Or perhaps its just a happy coincidence?

Mailman

Feb 10, 2013 at 10:10 AM | Unregistered Commentermailman

Why are the Ed Daveys, Roger Harrabins etc of this world so dead set on rubbishing shale gas..? Can they not come clean and state that they just didn't see this coming, and it b*ggers up all their carefully rehearsed statements about: 'ever increasing cost of fossil fuels - therefore we have to have renewables'..?
By the way - my wonderful QI odd facts book reckons that there are around 400 earthquakes in the UK annually - let's see how many of these (naturally occurring features) get laid at the fracking door...
Oh - and while we're at it - how many earthquakes might CCS cause - stuffing CO2 underground at high pressure - what could possibly go wrong..?

Feb 10, 2013 at 10:25 AM | Unregistered CommenterDavid

BitBucket's arguments on the impracticality and huge costs of shale gas extraction should be viewed in another way.
If the costs are so huge in relation to the potential, then energy companies will not invest. But even with huge potential, some investors will lose money and go bust. Existing energy producers will see their profits reduced. But the main beneficiaries will be the consumers, as over-supply gas driven gas prices. This is what has happened in the US shale gas industry, the early internet era, airlines post deregulation, the UK railways in C19th etc. etc. When businesses fail the gas wells and gas pipelines will not get shut down, but sold off at a value reflecting the revised expected economic return.
Also there is another factor. Entrepreneurship. The most successful business people do not go into new ventures with every potential problem solved. Instead they tackle the issues as they arise, and look to continually improve output (quality & quantity) whilst driving down costs. The oil and gas industries are is an excellent example of this working.
BB seems unaware of what Schumpeter called the process of “creative destruction” that is integral to the market. The problem is that too many of our politicians are unaware of this as well. The result is that investment is blocked, slowed and restricted. This benefits existing producers, with much larger total losses to consumers and economic growth.

Feb 10, 2013 at 12:14 PM | Unregistered CommenterManicBeancounter

I've been reading the No Hot Air blog -- thanks for the reminder, BitBucket -- and one of the items which caught my eye was 'Will shale gas be ugly?'

http://www.nohotair.co.uk/gas-guru-blog/shale-gas-2012/166-shale-gas/2721-will-uk-shale-gas-be-ugly

I hadn't realised that the poster child of the alarmists, the Jonah Field in Dimock, was quite so productive and so small in USian terms, and also how old-fashioned it is in terms of the fracking technology used. The UK footprint of the equivalent would be much much smaller. BH(!)20 5JR will take you via Google maps to the Wytch farm oil wells. Driving a virtual car along the road gives an idea of how ugly this major facility is in practice. Or, actually, how unobtrusive it is.

Here's what Nick Grealey says:
quote
Current technology means up multiple wells from a single pad, with up to 80 wells from one pad in areas such as British Columbia. The original lateral wells in Dimock extended only a half mile or less. In the UK we have the example of the Wytch Farm Oil Field, the largest in Western Europe onshore, which goes out 8 KM. So greater production can be undertaken from a far smaller number of pads. No one has any incentive to drill more wells given their expense. Visit Wytch Farm via Google Maps and it's hard to find actual disturbance. BH20 5JR. The well field itself is under the Sandbanks area of Poole, one of the most expensive post codes outside of London.
unquote

So much for the 'UK is too overcrowded to frack.' -- Sandbanks, the most overpriced real estate in the UK and there have been no complaints.

If the fracking goes 5 miles out from the pad then the individual pads will be what? Five miles apart, ten? Five acres at a time? 78 millionths of the surface above the shale will be desecrated. No wonder people are so set against it, that'll ruin the countryside even more than thousands of 200 ft glaring white war-of-the-worlds symbols of public money being wasted in the cause of freezing pensioners. Or not.

Maybe someone could work out how many windmills one fracking site would replace assuming the best figures from the US.

JF

Feb 10, 2013 at 2:06 PM | Unregistered CommenterJulian Flood

We've heard this from you before and you are not convincing anyone. Please desist.

As soon as you show us shale gas companies in the US that have self-financing projects. Why is it that you are ignoring the poor financials in the sector and refuse to look at the actual well production data? How is it that a person who attacks the foolish AGW believers for their faith based approach when you do exactly the same thing on this issue? If you want to believe go right ahead. But stop pretending that you are quoting sources that really know more than they do and stop confusing resources with reserves. What next; abiotic oil?

Feb 10, 2013 at 4:20 PM | Unregistered CommenterVangel

They self finance in that they use money invested in the projects by investors and NOT the government. Quite clearly investors continue to show faith in fracking by continuing to invest their money in various operations through America.

The reality is Vangel that private investors are not like governments, who continue to p1ss hundreds of billions of dollars away on ground unicorn horn...because its actually their own money if something doesn't return a profit or stand x chance of making money...the money doesn't get sent their way in the first place.

Sadly Governmebt doesn't work this way hence why billions will continue to be p1ssed away on firms if energy that cannot deliver that energy when it's most needed, ie when it's cold and dark.

Mailman

Feb 10, 2013 at 5:20 PM | Unregistered CommenterMailman

My guess is that you didn't actually watch the Ingraffea video, prefering instead to label him an anti-fracking zealot and thus ignorable. Your preferred source is the "Independent" Petroleum Associate of America (no rellay we are independent!). That is your loss, it it an interesting video.

I presume you've abandoned your idea that you only need to drill down once. I hope so. There is a potential benefit from the shale being much thicker than in the US in terms of fewer pads, but it depends entirely on the gas density (if that is the right word). That is what I tried to explain before. You seem to take it for granted that the gas density found in good seams in the US shale is going to be present at all levels in your thick seam. Maybe you and Guru Grealey, have a way of knowing that to be true that you are keeping to yourselves.

On my calculations, I have a feeling the spacing of horizontals must be much more than the 5m well-head spacing. I seem to recall a figure of 8 wells per square mile which equates to around 80m spacing. Hence my numbers should be divided by 16, resulting in 5,000 wells anually, which sounds more reasonable. On the other hand, Grealey quotes up to €8m per well compared to my £1-2m guess, so we get an estimate of up to €40bn anually (to supply 100% of UK demand for 100 years). Take with a pinch of salt...

On water, 5000 wells at 3 pitches per well, each 1m deep gives the amount of water flowing through Oxford for 60 days of the year. This assumes fracing occurs only once I guess, but wells tend to be re-fraced. Is it a lot? Perhaps not, but if your drill site is not near to a suitable source you are not going to be able to just run a hosepipe from the nearest farmyard.

Fracing under cities? I think you'll find that attitudes are a little different in the UK. Only a guess though. Maybe the good folks who protest about wind farms spoiling their view will happily accept fracing under their land...

Feb 10, 2013 at 5:47 PM | Unregistered CommenterBitBucket

BB -
I believe you're thinking in one dimension rather than two. 80m spacing compared to 5m spacing is a reduction in density of 16 squared, not 16. A density of 8 wells per sq mile, if laid out in a hexagonal array, would result in a spacing of about 600 m. [Cell size = sqrt(3)/2*spacing^2; area per cell = 1/8 sq mi = 1/8 * (1600 m)^2.]
(I don't know the true numbers here, just trying to give a hand with the maths.)

Feb 10, 2013 at 6:16 PM | Registered CommenterHaroldW

I've said this before but I'll keep coming back to it. Does anyone out there know the composition of uk shale gas? It could affect hugely the viability of production. Yes, you know-alls, of course its "mostly" methane but the other bits are what count. For excample, a high nitrogen content will require cryogenic processing - very, very expensive.

Feb 10, 2013 at 6:16 PM | Unregistered CommenterVernon E

@ Mailman

The reality is Vangel that private investors are not like governments, who continue to p1ss hundreds of billions of dollars away on ground unicorn horn...because its actually their own money if something doesn't return a profit or stand x chance of making money...the money doesn't get sent their way in the first place.

I think that you forgot the tech bubble. The executives at pets.com and grocery.com p!ssed away a lot of money because they were given money to piss away. Nortell and Lucent p!ssed away a lot of money because lenders and investors were willing to give them that money.

We should stop generalizing about what will happen in theory because we have more than enough data to see what is going on in practice. To see what is happening in the sector all you have to do is go EDGAR, download the 10-K filings, and examine the cash flow and balance sheet information. What you will see is a massive explosion of debt and large financing gaps that have to be filled by new borrowing, asset sales, or equity dilution. Now there is nothing wrong with negative cash flows when you are just starting but when you have a company that is getting most of its production from its wells in the first two years you expect to see the ability to self finance operations in five or six years. That has not happened and the shale companies are retreating from gas as quickly as they can. The problem for investors is that they are relying on the same song and dance to portray themselves as shale liquids producers even though the data shows that per well productivity is not going up at a time when a massive explosion of drilling has brought on line high IP wells that have yet to be depleted rapidly. While I expect some of the timing issues (there are many wells that are drilled but have not yet been fracked) to play a role the lack of improvement cannot be explained by the lag because it has persisted for a long period.

Once again I note a willingness to change my mind. But to do that I need some actual data showing that shale gas production is a self financing activity outside of the tiny core areas where it makes sense. I am more than willing to concede that these core areas are profitable but given how little they represent of the total resource I cannot see the case for optimism that is being spun on this site. For the record, I agree that the green movement is intellectually bankrupt and that renewables make no sense. I am simply holding the shale gas story to the same set of standards that I hold solar, wind, and other green boondoggles.

Feb 10, 2013 at 7:28 PM | Unregistered CommenterVangel

@ BitBucket; I have worked on gas wells in the Marcellus Shale in Pennsylvania. I can assure you that nowhere in the US will they allow gas wells in the laterals to be anywhere near 80m spacing. Typical spacing between laterals is more likely to be 200m - 300m between well bores. The state(s) regulate the well bore spacing, not the drilling company. All well bore data (surveys, geology, production data etc.) are required to filed with the appropriate state agency for public access. Even in conventional (ie vertical) wells the closest spacing I have seen is 5 acres (2.02ha)

The usual practice is to drill one well on a pad as a pilot hole to determine the true thickness of the formation and use the data from that to determine what depth the lateral will be at. They will quite often cement back the pilot hole to a point above the producing zone and drill a lateral from that point.. All other wells are drilled on the basis of the pilot hole. Keep in mind the lateral are drilled parallel to each other, not radiating like spokes on wheel. Also the length of the laterals is determined by the boundaries of the lease area and usually includes a setback from the lease boundary to prevent going off the lease.

Feb 10, 2013 at 7:57 PM | Unregistered CommenterGilbert K. Arnold

If the volume of gas extracted * price exceeds the total cost drilling and operating the well, then it should be profitable.
This ought to be a simple calculation. Why are all here mudslinging back and forth, rather than doing the numbers?

Feb 10, 2013 at 8:33 PM | Unregistered CommenterEntropic man

Because Entropic Man, that doesnt fit the catastrophiliacs narative.

Regards

Mailman

Feb 10, 2013 at 9:32 PM | Unregistered Commentermailman

Vangel said "Once again I note a willingness to change my mind."

No sir, I do not believe there is anything any sceptic could ever say that would convince you to mend your ways and step away from the catastrophilia that is Mann Made Global Warming (tm).

Regards

Mailman

Feb 10, 2013 at 9:36 PM | Unregistered Commentermailman

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