China and Russia: $400B Natural Gas Deal

"After almost a decade of negotiations, China and Russia inked a huge, 30-year natural gas deal, believed to be worth more than $400 billion." Quoted from the Washington Post article. More at The Washington Post.

China’s Global Energy Reach

To diversity its sources of energy "China now has operations, investments or projects across the globe in Africa, the Middle East, South America and North America." Quote from the New York Times article. More at New York Times.

Monterey Shale Oil Estimates Slashed by 96%

"Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California's vast Monterey Shale deposits, deflating its potential as a national "black gold mine" of petroleum." Quoted from the Los Angeles Times article. More at Los Angeles Times.

Shale Oil Flowing in Argentina

Exxon Mobil has a well producing crude oil from a shale formation in the Vaca Muerta Formation of Argentina. More at Reuters.

Making Ammonia with Natural Gas

"Providing another sign of continued growth in industrial demand for natural gas, two European companies announced earlier this month that they would form a joint venture to build an ammonia plant on the Gulf Coast. BASF, a German chemicals company, and Yara, a Norwegian agricultural company, plan to build the plant on an existing BASF site in Freeport, Texas. In February 2013, Potash Corp. restarted its ammonia plant in Geismar, Louisiana. The plant had been idle since 2003. Bentek Energy estimates the facility uses 184 million cubic feet per day (MMcf/d) of natural gas. In addition to several expansions and upgrades to existing ammonia plants, Bentek reports two other new ammonia-producing plants in the United States that will use more than 100 MMcf/d of natural gas." Quoted from the Energy Information Administration's Natural Gas Weekly. More at Energy Information Administration.

Somebody Might be Right About the Utica Shale ?

"Just a month after BP decided to take a $521 million hit to abandon its plans for the Utica Shale, Chesapeake Energy last week called the region its “newest world-class asset.”" Quoted from the FuelFix article. Related: Horizontal Well Density in the Utica Shale [1]. [1] http://geology.com/utica.shtml More at FuelFix.com.

40 FLNG Facilities by 2020 ?

FLNG (floating liquified natural gas) is an emerging technology that uses a floating vessel as a factory to convert natural gas into natural gas liquids. They are less costly than land-based plants, they can be moved from site to site and small FLNG ... More at FuelFix.com.

Chevron Drilling Romanian Shale

Reuters has a short report on some of the social challenges faced by Chevron while drilling in Romania. The country might have 51 Tcf of natural gas. More at Reuters.

Norway Natural Gas Exports

Norway is the world's third largest exporter of natural gas, with a trend of increasing production and an extensive network of subsea pipelines. More at Energy Information Administration.

The War on Coal ?

An article on Slate.com looks at what some people call "The War on Coal" from blue, red and two different green (environment and money) perspectives. Related: Coal Through a Microscope [1] [1] http://geology.com/articles/coal-through-a-microscope.shtml More at Slate.com.

Attracting Foreign Investors to Mexican Oil and Gas

Now, for the first time in 76 years, Mexican oil and gas fields are open to foreign and private investment. A Bloomberg article explains some of the details. More at Bloomberg.com.

First LNG Shipment from Papua New Guinea

The first LNG shipment from Exxon's new export facility in Papua New Guinea is on its way to Tokyo Electric Power. Related: What is LNG? [1] [1] http://geology.com/articles/lng-liquefied-natural-gas/ More at Bloomberg.com.

Removing the Gas from Bakken Crude

Crude oil from the Bakken Formation has been involved in some explosive train derailments. The high gas content of the crude is thought to be part of the problem. More at Reuters.com.

Pipeline Will Carry Oil Sands Crude to the Atlantic Coast

Although the Keystone XL pipeline in the United States has been delayed for years, a pipeline that will transport oil sands crude across Canada to the Atlantic coast is gaining momentum. Related: What are oil sands? [1] [1] http://geology.com/articles/oil-sands/ More at Bloomberg.com.

Severance Tax in Ohio ?

The Ohio House of Representatives approved a severance tax of 2.5% on horizontal wells. Now it goes to the Senate. More at The Republic.

One Million Barrels of Bakken and Three Forks Crude

When the final numbers for North Dakota's shale oil production for the month of April are in, the total is expected to exceed one million barrels. More at Reuters.com.

Links Between Drilling and Seismic Activity ?

"The panel that regulates the Texas oil and gas industry is waiting for more information before will accept that there are any links between increased seismic activity and drilling activity." Quote from the SFGate article. More at SFGate.com.

Energy Battles on Maryland Shorelines

The construction of a wind farm and a liquified natural gas export plant are generating lots of debate in eastern Maryland. More at Washington Post.

Australia as the World’s Largest Exporter of LNG ?

LNG projects along parts of Australia's coastline where there is very little local market for natural gas could make the country the largest exporter of LNG in the world. More at CNBC.com.

China’s Need for LNG Could Fall

An article on CNBC.com speculated how shale gas development in China might change the country's energy mix and significantly reduce the need for imported LNG. More at CNBC.com.

LNG: Another Way to Lose Your Shirt? Again?

One of the current debates in Washington [1] is about exporting natural gas from the United States. A few years ago companies were mothballing brand new LNG import facilities because massive shale plays started flooding the United States market with low cost natural gas. Now companies are lobbying the United States government for permission to export United States natural gas as LNG. The potential problem with that plan is that a lot of natural gas projects in other parts of the world have an enormous transportation advantage over natural gas shipped from the United States. Many of these new natural gas projects are in areas where there is very little local market and that gas will be sold as LNG. The information below is a sampling of how much natural gas might be going into LNG, FLNG and subsea pipelines in other parts of the world. The volume is surprising even though this list is far from complete. The high LNG prices in Asia might drop as all of this new gas enters the market. AUSTRALIA: Companies in Australia are busy developing LNG projects along the entire northern coast of that continent [2]. There is very little local market for some of these fields and they have a huge transportation advantage to Asia over LNG shipped out of the United States. An article on the Energy Information Administration website [3] reports that Australia expects to have nine new LNG projects that will use traditional natural gas and five that will use coal bed methane. EASTERN RUSSIA: There is a lot of natural gas under the seafloor off the eastern coast of Russia. There Exxon is partnering with Rosneft [4] to build LNG facilities that will export natural gas to the Asia-Pacific market. Gazprom, the state-controlled natural gas company of Russia, has developing or working LNG projects in the Sea of Japan near Vladivostok [5] and at Sakhalin Island [6]. CANADA: Lots of companies are looking at the Pacific coast of British Columbia for the export of Canadian natural gas. Early this month there were proposals for 14 LNG export plants [7] in the province. Chevron [8] and BP [9] are interested in exporting LNG from British Columbia. Shell is already in partnership agreements [10] with Asian customers. AFRICA: On the east coast of Africa, Anadarko and Eni have invested billions of dollars to explore one of the largest untapped natural gas resources in the world [11] off the coast of Mozambique [12], where there is only a small local demand. They plan to have a natural gas pipeline that connects the offshore fields to LNG plants on the continent. Statoil and Exxon are working off Tanzania's coast [13] on large gas discoveries where there is very little local demand. These will be developed for LNG. Similar natural gas resources could exist off the coasts of other nations on the east coast of the continent. USGS recently published an assessment of oil and gas in four East African geologic provinces [14]. Onshore the China National Offshore Oil Corporation is working to develop oil and natural gas resources in some of the the east African rift basins [15]. Western Africa has a lot of potential to export LNG. Based upon 2012 statistics, Nigeria was the fourth largest exporter of LNG [16] in the world. They are only capturing a fraction of the gas. Large amounts of gas are still being flared [17] off the coasts of Nigeria and other west African countries. Algeria [18] is a leading LNG exporting country and a major source to the Mediterranean. Although the country has its instabilities it has a lot of natural gas capacity that could go straight to LNG. Egypt [19] has been a leading LNG exporting country to Europe and has new sources of gas that should maintain or increase export levels. Data from the Energy Information Administration FLNG: Shell is developing a fleet of FLNG (floating LNG) vessels [20] that will have the largest hulls in the world. These are initially intended to capture and convert natural gas from fields that are off the coasts of Australia and Indonesia. A large market also exists for smaller floating LNG facilities [21]. These might be used in areas where natural gas would otherwise be flared. INDONESIA: Indonesia currently accounts for 7% of global LNG exports. In addition, the country produces a lot of natural gas offshore that is converted into LNG and transported to one of its own islands for consumption. A lot of natural gas is currently being flared in Indonesia but the percentage is dropping rapidly through the use of small LNG facilities. Shell plans to use some of its FLNG vessels in Indonesia. Companies from China, the United States and other countries are planning LNG export facilities in Indonesia. The government is requiring them to dedicated a portion of their production to local consumption. In addition to traditional natural gas, Indonesia has significant coal bed methane and shale resources on land. Coal bed methane is currently being produced and the government expects to increase production to 183Bcf/y by 2020. Details in an Energy Information Administration article [22]. PAPUA NEW GUINEA Exxon, partnered with companies from Australia and Japan, recently spent $17 billion on a new LNG export facility [23] in Papua New Guinea that is expected to produce up to 6.9 million tons of LNG at peak capacity. Exploration for more gas in PNG continues. CHINA: China has a diversity of natural gas resources. They have conventional gas in onshore and offshore basins, a shale gas resource that rivals the United States, and a growing coal bed methane production. They are acquiring expertise to develop their shale gas through Sinopec partnerships in several shale gas plays in the United States. One deal with Devon Energy [24] includes the drilling of 125 wells with hydraulic fracturing that will be drilled outside of the United States. If these wells can be successfully developed in China and replicated the need for LNG in China could fall [25]. The decreased need and new pricing models [26] for LNG could see much lower LNG prices going forward. In the East China Sea, natural gas fields hundreds of miles from shore are now being developed with natural gas pipelines on the seafloor that deliver the gas straight to urban centers. One is a 200-mile long subsea pipeline that delivers natural gas from the Pinghu Field straight to the city of Shanghai [27]. Although the South China Sea [28] has a lot of territorial disputes it is also thought to have about 200 trillion cubic feet of natural gas in proved and probable reserves. Abundant oil and natural gas is also present under the under the Yellow Sea. SOUTH KOREA: South Korea is a major energy importer, producing only about 5% of its domestic energy consumption. The Korea National Oil Corporation is launching projects worldwide to control at least a small portion of the global energy supply. They have projects in Africa, the Middle East, South America, Canada and Asia. In the United States they have projects [29] in the Gulf of Mexico, onshore in Alabama, Texas (23.7% of the Eagle Ford) and New Mexico. QATAR: Qatar, the world's largest exporter of LNG [30] is worried about keeping its LNG customers. The Bloomberg article says: "The greatest threat to Qatar’s enormous wealth is (LNG) competition." ALASKA: The Alaska Senate is debating the largest infrastructure project in the history of the state [31]. It will involve a pipeline delivering natural gas from the North Slope to the Pacific coast where it will be converted into LNG and exported. Presently, lots of natural gas on the North Slope is being flared because it has no access to market. A project like this might capture an enormous natural gas resources that is either undeveloped or wasted. If any US project to export natural gas should be approved this one is it. Hopefully it can be done at a profit. ARCTIC AND SUBARCTIC BASINS: Natural gas from Arctic and Subarctic Basins [32] and the world's largest petroleum basin [33] might be developed using the Alaska project as a model. With warming climate some of these areas are ice free for much of the year. GLOBAL SHALE GAS: Most of the natural gas included in the listings above is conventional natural gas. The amount of unconventional natural gas (mostly from shale) that could become available outside of the United States is phenomenal. The chart below from the Energy Information Administration [34] shows that lots of natural gas could be produced from shale in many parts of the world. Much of this gas is in areas without a significant market and much of it is in the LNG customer countries. METHANE HYDRATES: The people of Japan are not sitting on their islands waiting for others to deliver natural gas. "In March 2013, JOGMEC conducted the first successful testing of offshore methane hydrate production and confirmed Japan's estimates of 40 Tcf of methane hydrates in the Nankai Trough on the southeast coast of the country. Japan hopes to begin production by 2018." Quoted from the Energy Information Administration [35]. India [36] has been working on projects to methane hydrates for the past several years. They believe that 900 trillion cubic feet of methane hydrates exist in their exclusive economic zone. Methane hydrates [37] are found in many parts of the world. When a technology is developed to capture them there will be a new natural gas revolution that will make shale gas look tiny. EXPORTING US NATURAL GAS? With all of the new sources of natural gas being discovered and LNG competition being developed, jumping into the LNG export business with a huge transportation disadvantage to the Asian and European markets seems to be fairly risky. The bottom line questions is: Does it make sense to spend a lot of energy compressing Marcellus gas on the US east coast, then spend a lot more energy shipping it across the planet to destinations where it will compete with a growing number of competitors? That certainly isn't good stewardship of the US natural gas resource and with all of the developing LNG, FLNG and subsea pipeline competition it might not make economic sense. Why ship it to Asia? That gas could be used ten miles from the wellhead! Wouldn't it make a lot more sense to take the billions of dollars to be spent on LNG plants and use it to coordinate pipelines, chemical companies [38], the auto industry, electric utilities and manufacturers within the United States? Or, converting it into alternative fuels [39] here in the United States? [1] http://thehill.com/policy/energy-environment/205710-dems-ask-obama-to-take-sides-on-gas-exports-as-energy-bill-teeters [2] http://www.appea.com.au/oil-gas-explained/operation/australian-lng-projects/ [3] http://www.eia.gov/countries/cab.cfm?fips=AS [4] http://www.reuters.com/article/2014/04/01/russia-rosneft-gas-idUSL5N0MT32R20140401 [5] http://www.gazprom.com/press/news/2014/march/article185616/ [6] http://www.gazprom.com/about/production/projects/lng/sakhalin2/ [7] http://www.theglobeandmail.com/news/british-columbia/woodfibre-lng-project-to-be-running-by-2017-premier-clark/article18503077/ [8] http://business.financialpost.com/2013/09/19/chevron-recommits-to-canada-with-kitimat-duvernay-shale-plans/?__lsa=c74d-fb38 [9] http://www.bloomberg.com/news/2013-09-09/bg-may-buy-gas-fields-in-canada-to-produce-lng-for-asia.html [10] http://uk.reuters.com/article/2014/04/30/shell-canada-lng-idUKL2N0NM1UC20140430 [11] http://www.reuters.com/article/2013/09/10/anadarko-mozambique-lng-idUSL3N0H60ZL20130910 [12] http://www.eia.gov/countries/regions-topics.cfm?fips=EEAE [13] http://www.marketwatch.com/story/statoil-exxon-mobil-in-gas-find-offshore-tanzania-2013-03-18 [14] http://pubs.usgs.gov/fs/2012/3039/ [15] http://www.eia.gov/countries/regions-topics.cfm?fips=EEAE [16] http://www.eia.gov/countries/cab.cfm?fips=NI [17] http://geology.com/articles/oil-fields-from-space/#nigeria [18] http://www.eia.gov/countries/cab.cfm?fips=AG [19] http://www.eia.gov/countries/cab.cfm?fips=EG [20] http://www.shell.com/global/future-energy/natural-gas/flng.html [21] http://fuelfix.com/blog/2014/05/07/is-a-boom-in-floating-lng-facilities-on-the-horizon/ [22] http://www.eia.gov/countries/cab.cfm?fips=ID [23] http://www.upi.com/Business_News/Energy-Resources/2013/09/03/PNG-natural-gas-project-nearly-complete/UPI-68891378212984/ [24] http://abcnews.go.com/Politics/money-chinese-investments-us/story?id=19347795 [25] http://www.cnbc.com/id/101646609 [26] http://www.bizjournals.com/houston/morning_call/2014/03/texas-shale-driving-global-gas-prices.html [27] http://www.eia.gov/countries/regions-topics.cfm?fips=ECS [28] http://www.eia.gov/countries/regions-topics.cfm?fips=SCS [29] http://www.eia.gov/countries/cab.cfm?fips=KS [30] http://www.bloomberg.com/news/2014-04-01/a-little-less-rich-qatar-gas-dominance-challenged.html [31] http://www.adn.com/2014/03/18/3381211/alaska-senate-passes-measure-to.html [32] http://geology.com/articles/arctic-oil-and-gas/ [33] http://pubs.usgs.gov/bul/2201/G/ [34] http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf [35] http://www.eia.gov/countries/cab.cfm?fips=ja [36] http://fuelfix.com/blog/2014/02/14/methane-hydrate-the-energy-source-of-the-future-maybe/ [37] http://geology.com/articles/methane-hydrates/ [38] http://www.nytimes.com/2013/08/16/business/energy-environment/foreseeing-trouble-in-exporting-natural-gas.html?_r=0 [39] http://www.bizjournals.com/sanantonio/blog/eagle-ford-shale-insight/2014/05/heyco-will-build-91-million-plant-to-convert-eagle.html More at Geology.com.

Floating LNG Facilities

FLNG (floating liquefied natural gas) facilities appear to be the new boom for developing small offshore natural gas. A lot of offshore natural gas is currently being flared at oil production sites. Capturing that gas would benefit the planet and extend the global energy resource. Related: Flaring natural gas as seen from space. [1] [1] http://geology.com/articles/oil-fields-from-space/ More at FuelFix.com.

Capturing Some of the 310000000 Cubic Feet per Day of Flared Gas in North Dakota

A start-up company in North Dakota has a plan to capture some of the 310,000,000 cubic feet of natural gas that is currently being flared every day in the Williston Basin and convert it into LNG that can be used as an alternative fuel by oil and gas dr... More at Platts.com.

Chesapeake Excited About Dry Gas Again ?

Chesapeake plans to start drilling again in the "dry gas window" of eastern Ohio. They currently have 274 producing wells and 211 waiting on pipeline. Related: Utica Well Density in Eastern Ohio [1] [1] http://geology.com/utica.shtml More at Ohio.com.

Chevron Drilling in Romanian Shale

Chevron is now drilling for shale gas in Romania where a potential 51 trillion cubic feet of gas could be present. More at Reuters.com.

Exxon Mobil and ConocoPhillips Like Shale Oil

A Reuters article describes how Exxon Mobil and ConocoPhillips are investing in shale plays that produce oil and gas. More at Reuters.

USGS Shale Gas in India Report

The United States Geological Survey has published: Assessment of Potential Shale Oil and Tight Sandstone Gas Resources of the Assam, Bombay, Cauvery, and Krishna-Godavari Provinces, India, 2013 More at USGS.

BP Quits the Utica

If you are reading the news you probably have seen some articles gushing about the great results coming out of the Utica Shale [1] in Ohio. BP is taking a $1/2 billion writedown and leaving the play. Related: Drilling Density in the Utica Shale [2] [1] http://geology.com/articles/utica-shale/ [2] http://geology.com/utica.shtml More at Platts.

Oil and Gas from Shale in New Mexico

The Spring 2014 issue of Lite Geology has articles related to the development of oil and gas from shale in New Mexico. Articles include: * New Technologies in the Oil and Gas Industry * Economic Benefits and the Future of Oil and Gas in New Mexico More at Lite Geology.

Utica Shale Production Jump

During 2013 the Utica Shale saw very large increases in natural gas production, oil production, number of wells drilled and much more. Related: Utica Shale well density [1] [1] http://geology.com/utica.shtml More at BizJournals.

Industrial Gas Consumers Pay Incredible Rates

In North Carolina, a number of industrial natural gas customers had to pay incredible rates for burning natural gas after they were asked to curtail use during the winter gas shortage. More at News Observer.

Drilling the Eagle Ford in Mexico

BizJournals has an article that explores how the Eagle Ford Shale might be developed in Mexico. There is currently very little activity in Mexico at present. Take a look at the night time satellite image [1] below to see how flaring and rig illumination go off at the border.. [2] Related: Oil Fields from Space at Night [3] [1] http://geology.com/articles/oil-fields-from-space/ [2] http://geology.com/articles/oil-fields-from-space/ [3] http://geology.com/articles/oil-fields-from-space/ More at BizJournals.

A Solution for Shut-in and Uncompleted Marcellus Wells?

The Marcellus Shale is producing so much gas and has so many shut-in wells that the gas volume can not be handled by the region's infrastructure. Over 1300 wells have been drilled but can not be completed until there is take-away capacity for the gas. This is putting regional downward pressure on prices. The Energy Information Administration describes pipeline projects that will help with these problems. More at Energy Information Administration.

Industries Sensitive to Natural Gas Prices

"Energy-intensive industries, including food, paper, bulk chemicals, glass, cement, iron and steel, and aluminum, are the industries that use the largest amount of energy per unit of output and are the most sensitive to natural gas prices. Of these, the most natural gas-intensive industries are food, paper, bulk chemicals, and glass." Quoted from the EIA Report. More at Energy Information Administration.

Pooling Oil and Gas Royalties in West Virginia

A bill to allow pooling around oil and gas wells is expected to resurface in the West Virginia Legislature. "Pooling allows the majority of landowners to benefit from gas royalties while still protecting minority interests. Pooling also protects surface owners, communities and the environment by reducing the number of wells needed to recover gas deposits." Quote from Steve Roberts, West Virginia Chamber of Commerce. More at The State Journal.

Natural Gas Boom Misconceptions

USA Today has a brief article that presents three misconceptions about the natural gas boom that has occurred in several parts of the United States. More at USA Today.

Drilling the Mancos Shale in New Mexico

Encana Corporation has plans to drill up to 50 wells in the Mancos Shale in New Mexico. More at Biz Journals.

LNG as a Railroad Fuel?

Continued growth in domestic natural gas production, along with substantially lower natural gas spot prices compared to crude oil, is reshaping the U.S. energy economy and attracting considerable interest in the potential for fueling freight locomotives with liquefied natural gas [1]. Related: What is LNG? [2] [1] http://geology.com/articles/lng-liquefied-natural-gas/ [2] http://geology.com/articles/lng-liquefied-natural-gas/ More at Energy Information Administration.

Rising Natural Gas Prices in Ontario

An article in the Toronto Star explains how homeowners in Ontario are seeing a rapid rise in their natural gas heating costs. More at Toronto Star.

Mineral Rights

In most countries all mineral resources belong to the government. This includes all valuable rocks, minerals, oil or gas found on or within the Earth. In the United States ownership of mineral resources was originally granted to the individuals or organizations that owned the surface. These property owners had both "surface rights" and "mineral rights". Since then the owners have enjoyed the freedom to sell, lease, gift or bequest these rights individually or entirely to others. Now a single plot of land on the surface can have several different subsurface owners! More at Geology.com.