Shale and water

There is another shale-gas-in-water story doing the rounds. Robert Jackson, a researcher from Duke University in North Carolina, says that he has found higher concentrations of alkanes in water samples near shale wells than in equivalent sites that have not been subject to hydraulic fracturing.

Interestingly the study appears to have been conducted in Pennsylvania, where in towns like the now notorious Dimock, water supplies have long been contaminated by gas naturally leaking from the ground. In fact, according to the Supplementary Information (Fig S1) several of the sampling sites came from around Dimock itself. I don't quite follow why, if you were trying to learn something about the effects of hydraulic fracturing on groundwater, you would choose to study somewhere where the water was already contaminated. Would it not make more sense to go to, say, the Bakken or Utica shales?

I'm not the only one thinking along these lines. The Telegraph, discussing the same story, notes that no methane contamination has been found elsewhere:

Studies in different shale formations have also shown no signs of escaped gas, suggesting that leakages could only be a problem in certain areas.

A paper worthy of closer examination I would say.

Shale blithe spirit

Reality seem finally to be dawning on the Scottish Conservative Party, whose deputy leader Murdo Fraser has suddenly started making positive noises about shale gas.

Shale gas has revolutionised energy markets in the US and has substantially reduced costs for both consumers and industry and I believe it has the potential to do the same for Scotland.

“Nearly 40% of Scottish residents are struggling in fuel poverty. I want to see a proactive Scottish Government approach on shale gas that will give hard up Scots a route out of fuel poverty.

“Recently I have visited several factories in my region, and they are crying out for shale gas in order to level the energy price playing field. Unless the Scottish Government can devise a balanced, fair and affordable energy policy, high energy prices will cost manufacturing jobs.

“The potential for offshore shale gas has yet to be explored and I would recommend that the Scottish Government follow DECC’s recommendations and use the existing North Sea infrastructure to tap into this resource.

Murdo is the deputy leader, so this should be seen as a significant statement of intent.

More shale numbers

Nick Grealy has come up with some news on the long-withheld report from the British Geological Survey:

The BGS Assessment of the Bowland Shale will be published, allegedly, by the end of the current Parliamentary session, July 18. A study for DECC on the price impact of shale gas, undertaken by Navigant will be released simultaneously I’m told.

He also says that a representative of the UK Onshore Operators has put UK reserves at 200Tcf, or nearly a century's worth of supply. This is similar to numbers that have been bandied about in the past, but much more than official estimates.

Cheshire gas

Gas prospector IGas has announced that there could be huge quantities of shale gas in the area it has been licensed to explore (story here).

The company's licences cover an area of 300 sq miles across Cheshire.

It had previously said it had about nine trillion cubic feet of shale gas. It now estimates that the volume of "gas initially in place" could range from 15.1 trillion cubic feet to 172.3 trillion cubic feet - nearly 20 times more.

To put that in perspective, UK demand is currently about 3TCF per annum, so we are talking about a lot of gas. Of course, there's the question of how much is extractable, but this is still very good news.

Ian Fells on energy shortfalls

Professor Ian Fells was interviewed on the BBC's PM programme about the story that Britain recently came within 6 hours of running out of gas. He is very interesting on the electricity supply problems a couple of years ago, suggesting that, despite official denials, these were due to a lack of gas.

The audio file is attached below.

Ian Fells, PM programme

Lilley's reply to Anderson

A couple of weeks ago, we discussed Professor Kevin Anderson's rather strange article in which he claimed, somewhat improbably, that Peter Lilley had maligned him. Lilley has now passed on his response to Anderson, which I am reproducing here with his permission.

Dear Professor Anderson,

Thank you for drawing my attention to your response to my Spectator article on shale gas.   I apologise for the delay in replying.

I am sorry if you were offended to be called the ayatollah of the green movement.   Far from being intended as an insult, it referred to your extreme frankness.  

Click to read more ...

Lateral thinking

The Institute of Directors has issued a report on shale gas, saying that it could create tens of thousands of jobs in areas that desperately need them.

Shale gas development could create tens of thousands of jobs, reduce imports, generate significant tax revenue and support British manufacturing. The Institute of Directors’ comprehensive new report, Getting shale gas working, studies the lessons of previous energy developments, investigates the economic impacts of potential shale gas production at scale, and sets out the practical steps for both government and industry to overcome the key barriers.

Click to read more ...

Write in haste, repent at leisure

When the PM received a briefing on shale, Cuadrilla was excluded.

Peter Lilley in the Spectator last week

...bizarrely, [Lilley] claims that Cuadrilla were excluded from an inquiry on shale gas conducted by the select committee of which he is a member.

Will Straw, letter to the Spectator today

The reason Will Straw has gone astray is that Lilley's next sentence was "The select committee instead had to listen to an array of bodies from the Committee on Climate Change to the WWF". You can see how confusion would arise. But I think Straw can be taken to task for firing off a letter without checking his facts.

Update on May 16, 2013 by Bishop Hill

Anybody notice the other letter about Lilley's article? Here's Lilley:

...state bodies are egged on by powerful environmental NGOs, which are heavily financed by the EU (WWF receives €600,000 and Friends of the Earth Europe €1.2 million) and our government (we pay WWF £4.1 million) to create the semblance of popular support.

and here's David Nussbaum of WWF:

Peter Lilley is incorrect when he implies in his recent article that WWF-UK receives funding from the UK government for public lobbying

 Also hugely amusing that Nussbaum would claim that the LSE isn't in the pay of big green. Grantham Institute, anyone?

Kevin Anderson gets shirty

Kevin Anderson, the Tyndall Centre's uber green worrier-in-chief has written a heated riposte to Peter Lilley's Spectator piece about shale gas. It's pretty strange stuff.

The immediate source of his ire appears to be Lilley's description of him as the "Ayatollah of the green movement". It's hardly how you'd like to be introduced to your prospective mother-in-law, but it's not exactly the most cutting insult around, particularly in the climate debate. However, Anderson seems to take considerable umbrage. In particular, the fact that his name only appears once in the article - in connection with a wish to keep shale gas in the ground - seems to have escaped him, and he leaps to the conclusion that every criticism made by Lilley is directed at him. Much huffing and puffing ensues, and on Twitter, dark accusations of "lies and half truths".

Last time an university bod went off on one like this, I wondered out loud about the lack of professionalism within the academy. It was Doug McNeall, I think, who said "welcome to academia".

Efficiency gains in the Marcellus

From an article about the continued growth of shale gas in the US comes this interesting snippet:

"Despite losing 53 rigs, gas production is still up an estimated 3.1 Bcf/d this gas year (November to November)," Adkins said.

"Wait a minute! Weren't low prices and high shale gas decline rates supposed to force U.S. gas supply sharply lower? Not for the Marcellus," Adkins said, noting that drillers can make money at $3.00/Mcf in the Marcellus.

My understanding had always been that you couldn't really make money from shale gas at less than $6/Mcf, hence the losses being accrued by many producers in the USA. Given that UK shale beds are much, much thicker than those in the Marcellus, this bodes well for the possibility of a financial bonanza and/or cheap gas.

Fracking in Sussex

The BBC's World This Weekend programme yesterday looked at the prospects for Cuadrilla's plans for frack for shale oil in the leafy south-east of England. This was a pretty balanced piece, with the prospect of the lights going out repeatedly raised as an important factor in the decision-making process. I think it's probably significant that this prospect is no longer considered eccentric or controversial but a real and present danger.

The magazine piece is followed by an interview with the man in charge of this shambles, Ed Davey, whose "answers" to questions are the epitome of vacuity. Towards the end, however, one does sense that the penny may be starting to drop.

The audio is attached below.

World This Weekend on Fracking

Peter Lilley on shale

Peter Lilley has written an excellent summary of the shale gas debate for the Spectator - the text seems to be outside the Spectator paywall, so it's doubly good.

We will only know for sure how much is there, and can be economically extracted, by drilling. So you might assume governments would be forcing the pace. Far from it. In 2011, the government imposed an 18-month moratorium. Since that ended, Cuadrilla — the only company which has drilled in the UK — has suffered further delays because of bizarre environmental obstacles. Department of Energy and Climate Change ministers have consistently talked down the industry’s prospects. When the British Geological Survey recently dramatically revised up their estimates of Britain’s shale potential, the department’s chiefs allegedly told them to redo the figures — further delaying the publication of their findings until the summer. There is still no date for the next licensing round to open up more acreage for drilling.

Rather amusingly the article has prompted the usual response from Bob Ward. Ever the master of the fallacy of the trivial objection, Ward notes Lilley's error in naming the great Lancastrian shale formation as the Bowman (rather than the Bowland) and declares, on that basis, that the article is "strewn with errors".

This attempt to decry an attempt to kickstart shale gas exploration is very odd because just a few weeks back, Ward was co-author on a Grantham Institute report that called for UK shale's potential to be explored. Ward seems to have been demanding exactly the same thing he now condemns Lilley for wanting.

This makes the Grantham Institute look very, very silly.

Between the lines of the energy market

Professor Jonathan Stern has written a letter to the Guardian about the possibility of the lights going out. Apparently it's not going to happen, a view that tallies with the view from the markets I reported last week. While I'm not entirely convinced that price spikes will be enough to prevent blackouts, I think it's fair to say that forcing people to switch the lights off through pricing and having their lights switched off for them when the grid can't deliver amounts to the same thing anyway, so it's probably not worth arguing about.

There is, however, plenty in Stern's letter that raises eyebrows:

It's quite correct that a great deal of old coal and nuclear capacity will be retired over the next few years. For the rest of this decade, that will be replaced by as much renewables as can be built (mostly wind) and gas. Most of the gas-fired power generation which is needed has already been built; around 4GW is currently not in operation because it is unprofitable and most of the rest is running at far lower load factors than in previous years. If "the lights threaten to go out", existing gas-fired generation will run at higher load factors and more can quickly be built.

I wasn't aware that any gas fired power stations were not in operation because it was unprofitable to run them, although I know this is happening in Germany. I guess this is the double whammy of low coal prices and subsidised wind power. Presumably the plan is that once the coal fired stations are shut down then gas will pick up again. The idea that we have built all the gas-fired capacity we need strikes me as highly suspect, given that wind power needs 1:1 backup for when conditions are still.

Stern's thoughts on shales are little more than wishful thinking though:

Towards the end of the decade, the UK may produce some shale gas if drilling and fracking prove to be environmentally acceptable; the volumes will not be great and are unlikely to be "cheap" in comparison to imports.

Given the likely size of the resource and the thickness of the shales, it is most likely that the volumes will be large, if the country chooses to exploit them.

Shell shuns shale

The Telegraph is reporting that Shell will shun UK shale gas development:

Simon Henry, Shell’s chief financial officer, said it had already allocated more than $6bn (£3.8bn) to shale globally and was not going to exceed that sum.

“We have a successful and growing business in North America, we have great opportunities in China, Ukraine and Russia,” he said. “The UK has to compete directly with them and right now nobody even knows whether the gas will flow.”

“Do we want to be first in and be in the headlines every day in the UK? Well, your answer is: we are not,” he said.

We appear to find ourselves in something of a Catch 22 situation. Nobody will invest in the new generating capacity that the government wants because nobody believes that the government policy of institutionalised insanity will last - taxpayers will not bear the kind of price rises that Davey wants to impose on everyone. But while the government is insisting that insanity is the way forward, nobody is going to invest in the UK energy industry at all.

Davey demands less gas

According to a story in the FT, George Osborne wanted to release the British Geological Survey report on shale gas in time for the budget.

Apparently Ed Davey decided to ask the BGS to rework the numbers.

...the energy department is understood to have asked it to redo its calculations, a process that is taking several months. A final report is still a few weeks away and could see a downward revision to the estimates.

Now why would Ed Davey want the shale gas estimates to be lowered?