Tuesday, October 29, 2013

Fracking fears wrong: Marmion - The West Australian

Fracking fears wrong: Marmion - The West Australian

The State Government has thrown its full support behind the development of a fracking industry in WA despite environmental concerns about the use of the controversial technique to unlock billions of dollars worth of shale gas.
Mining and Petroleum Minister Bill Marmion gave the industry the strongest possible endorsement after a green group accused the Government of putting the Broome water supply at risk of contamination.
Environs Kimberley raised the alarm after Goshawk Energy was issued a petroleum exploration permit for a vast area that includes the Broome water supply reserve and the site of a bitter protest over the James Price Point development.
Mr Marmion said he was aware of community concerns about fracking and WA was working on the world's best regulatory standards.
He said fracking provided a huge opportunity to create long-term jobs and economic activity, with significant commercial production just five to 10 years away.
"I strongly believe we can achieve this without compromising the environment or safety," he said.
Mr Marmion, a former environment minister, blasted sections of the environmental lobby for what he said were alarmist tactics and pseudo-science to argue against fracking.
"They need to be honest and up-front about their real objective, it is not about fracking," he said. "It is to prevent natural gas becoming a major fuel source for the generation of energy as opposed to renewable energy."


  1. INSIGHT - Water, Wealth and Whites - S.Africa's Potent Anti-Fracking Mix

    NIEU-BETHESDA, South Africa, Oct 28 (Reuters) - Stretching across the heart of South Africa, the Karoo has stirred emotions for centuries, a stunning semi-desert wilderness that draws artists, hunters and the toughest of farmers.

    It is now rousing less romantic passions.

    If energy companies and the ruling African National Congress (ANC) get their way, it will soon be home to scientists and geologists mapping out shale gas fields touted as game-changers for Africa's biggest economy, and working out whether fracking will work here.

    As with other prospective sites around the world, especially in Europe, the process is meeting significant opposition, some of it thrown up by Mother Nature, some not. The result is likely to be a lengthy delay before any exploration starts.


    Not only does the Karoo have very little water - the mighty Kalahari desert lies just to its north - but the oil companies are up against a well-organised grass-roots lobby opposed to anything that could upset its fragile environment.

    Amid the usual array of greens and "not in my back yard" campaigners sits South Africa's richest man, Cartier billionaire Johann Rupert, who is promising to take a legal fight up to the highest court if Pretoria rushes into granting exploration licences.

    A lack of proper consultation with landowners over exploration, he and his legal team argue, has already violated property rights enshrined in the constitution.

    They also say that a number of "significant unknowns" about fracking and the geology of the Karoo must be answered before any green light can be considered legally sound.


    What About The Water?

    However, the fact remains that the Karoo's environment - particularly its water supply - is very fragile, and local suspicion runs high. In Nieu-Bethesda, a village of 1,500 people some 750 km (470 miles) south of Johannesburg, the only permanent water supply since it was founded by frontiersmen in the mid-1800s has been a spring that wells up from deep within the surrounding mountains.

    Any interruption to that spring's flow or quality and the town of Nieu-Bethesda risks dying out, making it an extreme example of the threat to water safety that has sparked concern at fracking sites around the world.

    "Shell must stay away from here," said 59-year-old Molly Nikelo, an unemployed grandmother who supplements her meagre monthly state hand-out by cultivating a small plot of rare purple garlic for sale in expensive eateries in Durban.

    "What about the water? It supplies everybody and only comes from one place. People drink it, wash in it and grow vegetables with it. I've drunk this water every day of my life and I've never been to hospital."

    Emotions are also being stirred by the legacy of white-minority rule that has left a handful of wealthy whites in control of most of South Africa's land, and blacks in dead-end townships waiting for jobs that never arrive.

    "It has become a very nasty racial issue," said Samuel Zakay, a church minister who came down against fracking after "considerable thought and prayer".

  2. INSIGHT - Water, Wealth and Whites - S.Africa's Potent Anti-Fracking Mix


    "People have accused us black ministers of siding with these rich white people," he told Reuters in Graaff-Reinet, a typical Karoo town of quaint, white-washed cottages and Cape Dutch-style buildings with their distinctive rounded gables.

    The pro-fracking lobby are adamant that whites are going to have to give some ground for the greater good, but insist they have nothing to fear.

    The people against this project are a few wealthy white residents "who fear losing out", according to Booysen, the pro-fracking activist. "But this is not Zimbabwe where you take farms without compensation. And we are also concerned about the environment.

    I live here as well, you know." High Stakes For Shell too, the stakes are high. Having missed out on the U.S. shale gas revolution, South Africa offers a catch-up play and if it can pull off the technology in the Karoo, the firm will be well-placed to tackle the shale gas lodestone - China.

    The world's most populous nation has the biggest estimated reserves, at 1,115 tcf, most of it thought to sit beneath remote, semi-desert regions similar to the Karoo. Analysts say Shell will likely be able to conquer the technological challenge of fracking in the Karoo, but some are less certain that it can make money out of it.

    To minimise the visual impact and its physical footprint, Mohale says Shell is looking to build 32 wells on each 100-metre-by-100 metre fracking "pad", compared to the six wells per pad widely used in North Dakota in the United States.

    It is also adamant it will not compete with people in the Karoo for water, but can avoid trucking it in - often several thousand trips are needed per well - by drilling down to brackish aquifers as much as 4 kilometres underground, sucking up the water, cleaning it, and then using it to frack.

    However, all this pumping and purifying imposes significant costs, and the 10-year outlook for global gas prices is not in Shell's favour, analysts say. "One of the things about shale is that it is a manufacturing process.

    It's not an exploration and production process," said Philip Verleger, an independent U.S. energy analyst. "It doesn't work if you have to spend huge sums of money finding water, sand or other material."

    - See more at: http://www.rigzone.com/news/oil_gas/a/129819/INSIGHT_Water_Wealth_and_Whites_SAfricas_Potent_AntiFracking_Mix/?all=HG2#sthash.gGjYUAUB.dpuf

  3. Sinopec Field Could Reignite China Shale Hopes

    BEIJING, Oct 28 (Reuters) - Chinese oil giant Sinopec Corp is for the first time pumping shale gas from test wells in commercial quantities in what it hopes will be a breakthrough in the development of a badly needed new energy source.

    Stymied by the cost of drilling and complexity of tapping shale gas, China has struggled in its bid to revolutionize its energy supplies and unlock what may be the world's largest shale gas reserves by emulating the frenetic exploration and production of the U.S. shale boom.

    But the state-owned firm's Sinopec Jianghan unit has more than doubled its 2015 output target for the key shale area of Fuling in the country's southwest after successful pilot drilling, hoping to cut costs through measures such as drilling numerous wells at once and recycling fracking liquids.

    That is good news for Beijing, where calls to exploit shale have taken on greater urgency due to a domestic shortage of gas supplies and longer term plans to prioritise gas-fired energy production as part of a battle to clear China's notoriously polluted skies.

    "The high yield in the Fuling area proves more evidence that the Sichuan basin is promising in terms of shale gas development and lays the foundation for commercial production in the area," said a Sinopec Jianghan official with direct knowledge of the Fuling drilling, adding that another 50 or so wells are planned for commercial development in 2014. He declined to be named as he is not authorised to speak with media.

    Sinopec has drilled nearly 30 pilot shale gas wells in the Fuling area of Chongqing municipality in southwest China, part of the Sichuan basin - one of the most promising geological zones for the unconventional fuel.

    Six of the wells are pumping a daily combined rate of 1.06 million cubic metres of gas, according to state media and the Sinopec official, or an average of nearly 180,000 cubic metres per well.

    They are among the most prolific of the total of around 150 wells Chinese companies have sunk over the past three years in pilot explorations. That has led the operator to target an annual production capacity to be built at the field of 5 billion cubic metres (bcm) by the end of 2015, the source said.

    That would dwarf company estimates reported by local media in July of around 2 bcm for the whole of Sinopec's shale output by 2015, and would be 100 times greater than China's estimated output last year of just over 50 million cubic metres from all test drilling at shale formations.

    Drill Down Slow development of China's enormous shale gas reserves had cast into doubt even a modest 2015 output target of 6.5 bcm, but the development of Fuling should make this goal far more likely.

    A Sinopec Corp spokesperson said the company was evaluating the Fuling reserves and expected to come to a conclusion on possible commercial development around year-end.

    To reach and sustain output of 5 bcm a year, Sinopec would need to drill around 170 wells, each pumping 100,000 cubic metres daily.

    Of the six Fuling wells that are recording steady test flows, one has daily production as high as 547,000 cubic metres, according to the Sinopec official and a report earlier this month by the official Xinhua news agency.

  4. Sinopec Field Could Reignite China Shale Hopes


    With limited participation from established global service companies such as Baker Hughes and Schlumberger, Sinopec's Jianghan team has improved in key areas such as fracturing and logging - the process of making detailed records of geological formations.

    At one well, Sinopec Jianghan executed a 22-stage fracturing process at a depth of 1,500-metre - a challenging task for a company with limited experience of such a complex procedure. Key for commercial production is whether companies can locate high-yielding shale formations and then drive down costs.

    Sinopec's Jianghan unit aims to halve drilling costs from a hefty 80-100 million yuan per well ($13-16.6 million) currently, said the official and the Xinhua report. Shortening each well's drilling period from the current average of 70-75 days by drilling a few wells at the same time is one of the most effective ways of achieving this due to economies of scale, said industry officials.

    Cost savings will also come from multi-directional horizontal drilling and recycling fracking fluids, officials said. And the Fuling development looks set to help Sinopec take the lead in Chinese shale gas, overtaking China's top energy firm PetroChina.

    "Compared with PetroChina, Sinopec is weaker in (broad) upstream development. It's keen for a breakthrough." said a government official involved in shale gas planning.

    PetroChina is China's leading gas producer and has carried out some successful pilot drilling in the Weiyuan area of the Sichuan basin, but has announced a modest target of 2 bcm of shale gas production by 2015 as it continues to focus on other oil and gas projects.


    "Sinopec's Jianghan unit aims to halve drilling costs from a hefty 80-100 million yuan per well ($13-16.6 million) currently"

    There's that sum again - about double the cost of US wells BUT half the price of a C.B. well.


  5. The 34th application for a US LNG export permit has Singapore and Indian links

    Monday, 28 October 2013

    The 34th LNG export permit application received by the Department of Energy is from Delfin LNG, a Gulf Of Mexico export project with Singapore and India links and plans for a floating liquefaction venture offshore Louisiana.


    USA: Delfin Files LNG Export Application

    Delfin LNG filed an application with the U.S. Department of Energy for long-term, multi-contract authorization to export domestically produced liquefied natural gas.

    Delfin seeks to export LNG of up to the equivalent of 1.8 billion cubic feet (Bcf) of natural gas per day or 657.5 Bcf per year (approximately 13 million metric tons per annum of LNG) from its planned, floating liquefaction project to be located in the West Cameron Block 167 in the Gulf of Mexico.

    The export authority would permit Delfin to export LNG to any country which has or in the future develops the capacity to import LNG via an ocean-going carrier and with which the United States has, or in the future will have, a Free Trade Agreement or the legal equivalent.

    Delfin requested authorization of exports over a twenty year period, commencing seven years from the date the requested authorization is granted.