I've never pretend to be a geologist, my background being in marketing gas to downstream customers of all shapes and sizes: domestics to refineries and everyone in between. But when I first heard of shale gas in 2008, I immediately thought how (literally) on earth, could the hopeful and paradigm shifting news coming out of North America not be equally available worldwide?
A quick tour of what's happening outside of Europe recently, starting with China:
China has set a goal of producing 6.5 billion cubic meters of shale gas a year by the end of 2015 as part of a five-year plan to increase the country's capacity to tap the unconventional resource, China's top energy authority said on Friday.
If the country by 2015 makes the technological innovations needed to better explore for and recover shale gas, its annual output of the resource is expected to increase to as much as 100 billion cu m by 2020, said Zhang Yuqing, head of the National Energy Administration's oil and gas department.
Production of this size inevitably makes recent nervousness about China's appetite for LNG well founded.
Take a hard look at China, Ian Nathan, a senior research analyst and specialist in global natural gas, LNG and national oil companies at Energy Intelligence in New York, urged a morning audience at an Arctic oil and gas conference in Calgary yesterday.
The market widely viewed as a sop for excess North American natural gas supplies is not a “bottomless sink” capable of absorbing limitless volumes of liquefied natural gas sold at premium prices, he said. “That window for Asian LNG exports may not be open indefinitely.”
How long will it take for the UK economic policy to abandon it's view of high UK gas prices as inevitable cause of equally inevitable surging China LNG demand? Probably as long as the UK press to actually investigate a story instead of regurgitating self serving Gazprom-Centica-Ofgem value chain press releases. That could be a long wait.
Latest from China, this today from the WSJ. Banned from investing French pensioners money in France (they make up 14.3% of the CAC 40) Total invest in China shale projects.
French oil major Total SA is in talks with state-owned Sinopec Group on a joint venture to jointly explore for and produce shale gas in China, the company's chief executive said Sunday.
"We were waiting for those announcement…we already have a pre-agreement with Chinese companies…with Sinopec Group," CEO Christophe de Margerie said in an interview, referring to the more frequently used name for China Petrochemical Corp.
China's annual output of shale gas may skyrocket from virtually zero now to 6.5 billion cubic meters in 2015, and then to 60-100 billion cubic meters annually by 2020, if targets published in a government development plan for the unconventional gas announced Friday are hit.
What about the rest of the world? Who else is open for business?
South America is getting hot. Argentina is well known, but Colombia is evolving too:
Royal Dutch Shell Plc (RDSA), Exxon Mobil Corp. (XOM), and Chevron Corp. (CVX) have shown interest in Colombia’s reserves of gas trapped in shale rock and other unconventional sources, government Hydrocarbons Director Julio Cesar Vera Diaz said yesterday in an interview in Cartagena in northern Colombia.
Meanwhile Brazil's Petrobras is looking at unconventiona in Argentina and Uruguay.
The South African shale moratorium is not long for this world. The whites only hypocrites who run the anti shale movement will no longer provide an example to the green hypocrites of Europe who use the SA stoppage as justification for their calls for a European ban.
In another signal that South African authorities are warming to the need to exploit local reserves of shale gas, the National Planning Commission said yesterday that it saw natural gas providing “a rising share” of the energy mix because it was likely to be cheaper than exploring nuclear power options.
Hotting up quickly as shale producer is Australia. Various basins in central, southern and northern Australia are looking to be oil as well as gas plays. In Western Australia, they still need gas given the massive domestic energy requirements of the mining industry.
A RECENT decision by the West Australian Environment Minister to allow small-scale hydraulic fracturing in the Perth Basin without the need for environmental assessments could be a sign of things to come for unconventional gas resources, which some have tipped as the next energy frontier for the boom state.
The Perth Basin's tight gas fields could hold 9 trillion to 12 trillion cubic feet of recoverable gas, and are located near existing pipelines, according to WA Department of Mines and Petroleum records.
The WA Basins have the potential to be a far larger energy source than the North-West Shelf
Shale gas is breaking out all over.
I'll do an update on Europe shortly, where the surprise is the country where things aren't happening. And it doesn't begin with F.