Articles from 2012
Another game changer?
- Written by Nick Grealy
- Published: 04 January 2013
The Little Britain opponents of UK shale appear desperate to save their part of the planet while ignoring any implications of global energy industry trends on the rest of it. A constant objection by FOE and WWF is that shale must stop because it will upset UK climate targets (not actual emissions as we'll see in an upcoming post). So to those who think this post only concerns far away countries of which they know nothing and care less, stick to the end.
Proving shale gas isn't everything and conventional natural gas still has a lot of life left in it, i.e. bang goes the peak conventional gas theory, a recent study by Oxford Institute of Energy Studies asks the question East Mediterranean Gas: What kind of Game Changer? The title infers it at least could be a game changer. A refreshing change from an OIES study of over two years ago which asked a similar question about European shale and gave any number of reasons why not.
I admit to more interest in the decade's other big discovery, offshore East Africa, than gas in the literally explosive area of the Eastern Med. For those who've missed the African story:
Eni SpA and Anadarko Petroleum Corp. agreed to build the world’s second-largest liquefied natural gas plant in Mozambique to start exporting fuel in 2018.
Italy’s largest oil company and Anadarko will coordinate development of gas fields and cooperate in the construction of the plant in the Cabo Delgado province of northern Mozambique, which could have an eventual capacity of about 50 million tons a year, The Woodlands, Texas-based company said today in a statement. That would make it the largest LNG plant outside Qatar, the world’s biggest exporter of the fuel.
50 million tons of LNG is something the world LNG industry needs like a hole in the head. The story of only ten years ago was natural gas in short supply everywhere, even in the US which would be supplied by Qatar, escorted out of the Gulf by the Sixth Fleet. Whimper went that theory, as the US didn't need any LNG after shale, which meant Qatar had to sell it to either Japan or Europe. Then Australian LNG emerged, aimed at Japan and setting up a price war with Qatar. In the meantime, the US and Canada start planning exports. Fortunately Qatar is a tiny place, anyone else would have declared war by now. To add insult to injury East Africa LNG emerges aimed at the strongest Qatari markets left, India and SE Asia. Thailand's PTT has already bought up a chunk of the discovery. I haven't even mentioned emerging African and Australian shale industries. What could be worse for both Qatar in particular and expensive gas fans in general? How about this?:
The discovery of sizable gas resources in the Levant Basin, a geological structure that straddles the territorial waters of Cyprus, Israel, the Palestinian Territories, Lebanon, and Syria, has the potential to be game-changing for the East Mediterranean region. Hitherto net energy importers, these countries are now faced with the prospect of long-term energy self-sufficiency and the development of a new revenue stream for the economy. With the resource potential of the Levant Basin believed to be much higher than the 35 Tcf of gas discovered recently, the East Mediterranean is now the focus of much interest on the part of major upstream investors.
It's intriguing how energy can bring together enemies. Build something really, really big, and suddenly people with even a small share have an incentive to preserve it. It's worth recalling how upset the US was over German imports of Soviet Gas, yet the only interruptions to supply started after the fall of the CCCP. During the entire madness of the Cultural Revolution, the only part of China that functioned with no interference was the oil industry.Today, the other unlikely prospect is Russia to South Korea via North Korea gas. So if that can work (I think it's inevitable but don't ask me for a date), surely this project could? In fact we've already seen the only thing Israel and Gaza successfully negotiate has been off shore exploration. The conventional wisdom of left/greens is oil and gas causes conflict, but the reality is it more often gets implacable enemies talking. Ever since spooky friends told me even the Taliban were on board about the TAPI pipeline, I've been thinking perhaps the Levant Basin might work, despite initial misgivings that building flammable infrastructure in the area was asking for trouble. In this area, Israel, Palestine, Lebanon, Syria and Gaza are the least of worries.