Statistics, uncomfortable truths, and statistics

Yet another report that I will often return to,The BP Statistical Review of World Energy is about the most complete set of energy statistics in one place.  The report today has some fascinating comparisons 

The Euro Troika of Green Organisations - Greenpeace,  WWF and Friends of the Earth tell us two things:

• We must cut energy production
• We must cut CO2 emissions. 

But, this is what the policy delivered.

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The Holy Grail of Climate Change: Coal can end in China

If the April 2011 EIA report on World Shale Gas resources was as I described at the time “Shale Gas’ WOW moment”, this year’s model out yesterday serves the same purpose for  shale oil, and advances to be more of a multiple expletive moment for shale gas resources. The title says it all: Shale Oil and Shale Gas Resources are globally abundant.

This will keep me busy for so long it’s hard to know where to start - or stop. But I will stop, for today, at the most important destination, China, with a few quick points en route:

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The UK could have 700 TCF of shale gas resources

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. 

Underlining again that the difference between the original gas in place (resources), and recoverable gas (reserves), is lost on not only most people but many journalists, let’s look at the subject again quickly. 

Conventional oil and gas resources were relatively easy to assess, but we should bear in mind that according to conventional wisdom, the North Sea would have run dry years ago.  It hasn't and we’re essentially have been looking at 20 year reserves estimates for the North Sea for most of the past fifty.

Unconventional oil and gas, which is rapidly becoming dominant, and thus by definition the new conventional paradigm is harder to assess. One or two wells in field is like looking the through the keyhole of a warehouse; there is no substitute for a lot of exploratory drilling.  The idea of exploratory drilling is to find the way to release the gas - or oil- from the rocks.

There are good shales, great shales and not so good shales, but as technology develops all the time, most experts see increasing production from every shale. We’re just starting to see for example that revisiting one of the oldest US shales, the New Albany in southern Illinois with today’s technology gives answers that simply weren't even worth asking five years or so back.

This map, used by Avi Tucker of the University of Texas last week at UGOS, although originally from ARA resources underlines the prevalence of shales worldwide. By the way, an updated global resource estimate from the US Energy Information Administration could be released any day, one reason I think the following slides on UK potential from a presentation by Graham Dean of Reach CSG are worth considering.  

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Europe Shale Gas: Miracle or Mirage?

Is shale energy a miracle or a mirage? That’s the title of one section of the French parliamentary report published on June 5, that I’ll return to later this week. In between I’ll give an update on UK shale gas potential. Both, to the casual observer of energy, are of growing interest, while being either hopeful or incredibly disruptive, according to one’s perspective, to the experts. 

A key reason many people find the idea of shale gas and oil so unbelievable, is that it seemed to literally come out of nowhere. Rick Smead of Navigant Resources, introduces himself by saying “For 35 years, I worked in a very boring industry”. Navigant published the first report aimed at non-geologists on shale in July 2008, called “The New North American Ocean of Natural Gas”. That report, was, at the time, incredibly disruptive. It took me until August 2008 to first report on shale here in Europe, to meet an even more heated pushback than Navigant received in the US. Back then, as  Rick said the other day at the UGOS conference in London, “No one believed us. People made fun of us. The next year Exxon Mobil bought XTO for $31 billion dollars”

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