Huge Economic Impact Of Eagle Ford Shale, Largely Unknown Outside Of Texas

Much of this development and its significant economic impact is due to the combination of the relatively new technologies of horizontal drilling and hydraulic fracturing.  Amazingly, the oil and gas industry derives very little positive recognition from these feats, including equally important oil and gas development plays like the Marcellus Shale in the northeastern U.S., the Barnett Shale in north central Texas, the Haynesville Shale in northwestern Louisiana, and the Bakken Formation development in North Dakota.

The environmental lobbyists and global warming scare-mongers have been so effective with their propaganda they have managed to effectively squelch these great achievments and largely hide them from the American public.  As some might say, "go figure", are they with America or against her?
Peter

Eagle Ford Shale Generated More Than $25 Billion in Revenue for South Texas in 2011

UTSA projects the shale to create 117,000 jobs by 2021

Source: http://ccbr.iedtexas.org/

Click to Downlaod the Eagle Ford Shale Impact Report

Written by Christi Fish
Associate Director of Media Relations, The University of Texas at San Antonio

SAN ANTONIO, May 9, 2012 – Development of oil and natural gas in the Eagle Ford Shale contributed $25 billion in total economic output to the region in 2011, according to a study released today by the Center for Community and Business Research at The University of Texas at San Antonio Institute for Economic Development (UTSA).
"The Eagle Ford Shale has proven to be one of the most important economic engines in the state," said Dr. Thomas Tunstall, director of the UTSA Center for Community & Business Research, and the study’s principal investigator. "In 2011 alone, the play generated over $25 billion in revenue, supported 47,000 full-time jobs in the area, and provided $257 million in local government revenue."
The study also concluded that in 2011 shale development:

• Paid $3.1 billion in salaries and benefits to workers;
• Provided more than $12.6 billion in gross regional product;
• Added more than $358 million in state revenues, including $120.4 million in severance taxes;
• And spurred a triple-digit sales tax revenue increase in various local counties.
  

  Download the Eagle Ford Shale Impact Presentation

"We view the Eagle Ford activity as an economic opportunity of a lifetime," said Mario Hernandez, president of the San Antonio Economic Development Foundation. "The key goal is the increase in investment and jobs. And if the communities will partner with the private companies that are creating these jobs, it can be a win-win for everybody."

The increased revenue from the Eagle Ford Shale is rebuilding local communities. New schools and new hospitals are being built, and new training programs have been launched to maximize hiring from the local workforce. The study projects the creation of approximately 117,000 full-time jobs by 2021.

View the video recording of the Eagle Ford Shale Impact Presentation and Study Release from May 9, 2012

HUGE Numbers For Apache..

67,000 drilling locations in Texas and Oklahoma alone!  That ought to keep a lot of people busy for a long time.  These so-called "resource plays", which are basically low porosity and permeability rocks containing oil and gas that become economic to produce because of the combined technologies of horizontal drilling and hydraulic fracturing. 

These are truly revolutionary developments in the history of the oil and gas industry.  It amazes me how few people are aware of the significance of this.  Try to grasp the magnitude of the numbers Apache is throwing around in the following article.  To say the least, it looks like "Peak Oil" has been pushed into the future.  Make your plans accordingly.
Peter

Apache Details Liquids-Rich Identified Resource Inventory

9.2 billion net barrels of oil equivalent, 67,000 drilling locations in Permian and Anadarko
New U.S. resource plays: 580,000 acres in Mississippian Lime, 300,000 acres in Williston Basin
48 Tcf net sales gas in British Columbia's Liard Basin

RELATED QUOTES

Symbol	Price	Change
APA	85.42	+2.45

HOUSTON, June 14, 2012 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today released new, detailed resource estimates of its oil- and liquids-rich portfolio, including substantial Permian and Anadarko basin holdings, recently acquired acreage in the liquids-rich Mississippian Lime and Williston Basin resource plays, and significant new plays and oil exploration prospects in Canada, Argentina, Alaska and Kenya.
"For Apache, this is the time to drill more wells: We have captured a vast, liquids-rich resource base and drilling costs are declining," said G. Steven Farris, Apache's chairman and chief executive officer. "By remaining committed to Apache's historical focus on returns and preserving our conservative financial structure – which means living within our cash flow – our portfolio is positioned to continue to deliver long-term growth and value for our shareholders."
Resource estimates released Thursday at the company's annual investor day include:

• Apache, the second-largest producer and acreage owner in the Permian Basin of West Texas and eastern New Mexico, has identified approximately 34,500 drillable locations with an estimated net resource of 3.8 billion barrels of oil equivalent (Boe).
• In the Anadarko Basin in western Oklahoma and the Texas Panhandle, Apache has identified approximately 32,500 drillable locations primarily in the Granite Wash, Cleveland, Tonkawa and Marmaton formations with an estimated net resource of 5.4 billion Boe.
• In northern British Columbia, Canada, Apache has validated an outstanding new shale play in the Liard Basin with net estimated sales gas of 48 trillion cubic feet of natural gas (8 billion Boe) across 430,000 acres held with a 100-percent working interest.
  The resource estimate at Liard is based on recent drilling, test results and earlier well control points. "The D-34-K well is one of the best shale wells we've seen in any play," Farris said. "Our analysis indicates that the formation characteristics are remarkably consistent across this large basin."
• In Argentina, Apache estimated that its 450,000-acre position in the Vaca Muerta oil shale has a net potential recoverable resource of 800 million Boe.

New exploratory oil prospects include:

• Apache has built a 580,000-acre (net) position in the Mississippian Lime play in Kansas and Nebraska with an inventory of 7,200 potential locations and an estimated resource potential of 2 billion barrels of oil.
• Apache assembled a 300,000-acre position (net) in the Williston Basin in Daniels County, Montana, with more than 1,900 potential locations and potential resource of 1 billion barrels of oil.
• In Alaska – where this year Apache plans to drill its first well – the company has identified 1.3 billion barrels of oil of yet-to-be-found potential.
• In Block L-8 offshore Kenya, Apache has identified eight prospects with net potential of 1.4 billion barrels of oil. Apache expects to commence drilling its first well in the deepwater block in the third quarter.

"Apache has captured the largest inventory of liquids-rich drillable locations in our history, including additional upside potential from exploration activities in the deepwater Gulf of Mexico, Egypt and Australia," Farris said. "We are well-positioned to deliver long-term profitable growth with our balanced portfolio, focus on rate of return, and prudent financial structure."

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com.

D-Day

"During the Second World War, the Germans took four years to build the Atlantic Wall. On four beaches it held up the Allies for about an hour; at Omaha it held up the U.S. for less than one day. The Atlantic Wall must therefore be regarded as one of the greatest blunders in military history." - Stephen Ambrose, D-Day, page 577

D-Day, Of Sand, Beaches, Rocks, Geology, And Men And Women Who Love Them

Such bittersweet memories.  On this day in 1944 the ground invasion of France and the long-awaited liberation of Europe began.  France would be freed of Nazi (socialist) domination forever, right?

But this is a tribute to those who sacrificed.  My own father Andy Smith, came across Omaha beach, not on D-Day, but later, as a young infantry Lieutenant with the 41st Armored Infantry Regiment, part of  the 2nd Armored Division.  His unit was the first to enter liberated Paris but a short time later, in August of 1944, the first into Germany, and stopped the German advance during the Battle of the Bulge.

And then there are bittersweet memories of (for me) beaches and sand, from Lake Michigan, to the Pacific, the Atlantic, the Gulf of Mexico, the Florida Keys, the Mediterranean.......so many beaches, so much sand, so little time.  But then there is geology, and the study of sand, and rocks.  No living sedimentary, stratigraphic, or sedimentology geologist will not have known, read, or studied with Dr. Earle McBride of the University of Texas, wonderfully highlighted in the following article.  Every geologist who has looked at sand grains under a microscope will appreciate and relate to the following story.

I owe so much to my father, Mr. McBride, sand, and geology.  As with the Earth, what goes around comes around, and life goes on.  The sun rises and the sun sets, the tide goes out and the tide comes in, and rocks tell the story to those who learn to listen.  Today let's say a quiet "thank you" and remember.
Peter

Tiny remnants of war found in Omaha Beach sand

By Corrie MacLaggan | Reuters – 20 hrs ago

 

 

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  A glass bead with divots and scratches …
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  LSTs (Landing Ship Tanks), landing …
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  Current-day Omaha Beach in France …
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  Earle McBride is pictured by his …
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  US Army soldiers recover the remains …
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  Shrapnel grains and an iron bead, …
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  American troops watch activity …
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  LSTs (Landing Ship Tanks), landing …
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2nd Armored Infantry Division Patch

Andy Smith, athlete, soldier, coach, teacher.... Redstone, Colorado, 1986

AUSTIN, Texas (Reuters) - When Texas geologist Earle McBride visited Omaha Beach in Normandy, France, in 1988, four decades after D-Day, the visible remnants of the Allied Forces' invasion there had long ago vanished.

But he and a colleague would later discover the history of the June 6, 1944, invasion of Normandy's beaches - which marked a turning point in World War Two - lingered in the sand in the form of tiny pieces of shrapnel only visible under a microscope.

It wasn't a discovery that McBride and colleague Dane Picard of Utah set out to make during their tourist visit to Omaha Beach, where U.S. forces suffered their greatest casualties in the assault against heavily fortified German defenses.

"We didn't think about, ‘Hey, there should be shrapnel here?'" said McBride, 80, a professor emeritus at the University of Texas who retired in 2005 but still goes to his office five hours a day to study rocks.

But the geologists did what long ago became their habit when they visit a beach anywhere in the world: they put a bit of sand in a plastic bag and took it home.

McBride didn't fully analyze the sample for more than two decades. Finally, in retirement, he made a slide of the sand by using blue-dyed epoxy to bind the grains together.

On a recent day in his tiny office at the Austin university where he taught for 46 years, McBride showed a visitor what he found. Under a microscope, rounded grains - quartz, feldspar, clam and oyster shells - were visible, along with jagged-edged grains.

"You see how angular that grain is?" he asked. "It's an anomaly - if it had the same origin and history, it should have been well-rounded, too."

A different light source on the microscope revealed that the jagged-edged grains had a metallic sheen and a rust-colored coating, and when McBride held a magnet to some of the sand, the angular grains proved to be magnetic.

McBride suspected the jagged grains were shrapnel, and he used a scanning electron microscope to verify his hunch. It showed the grains were iron with a bit of oxygen from rust.

He also found the sand included small spherical iron and glass beads, which he and Picard believe were formed by munitions explosions in the air and sand.

"It's a detective story," McBride said. "Sand has an exciting history."

He said it's not surprising that shrapnel was left on the beach. Rather the surprise is that it remained there decades later, long after the wrecked ships, tanks and aircraft were gone.

But the shrapnel won't be in the sand forever, he and Picard wrote in Earth Magazine last year.

"The combination of chemical corrosion and abrasion will likely destroy the grains in a century or so, leaving only the memorials and people's memories to recall the extent of devastation suffered by those directly engaged in World War II," they wrote.

The research by McBride and Picard - a professor emeritus at the University of Utah - was published in the September 2011 edition of The Sedimentary Record, a scholarly journal.

"It was a great approach," said Xavier Janson, a research scientist at the University of Texas and an editor of the Record. "It was using a geological tool that you usually use to understand where sand grains come from, but instead, it was used to understand what happened on this beach."

For McBride, the discovery is an example of why he still finds passion in his lifelong work studying sedimentary rocks, the ones most commonly found on the earth's surface.

The latest project on his desk is a 450-million-year-old rock from Utah roughly the size of a softball; he's trying to reconstruct the history of how it formed and where its grains originated.

The earth is old, McBride said, and "all I can do is work on one little chunk of the history of sandstones. As we say, so many rocks, so little time."

(Reporting By Corrie MacLaggan; Editing by Paul Thomasch and Eric Walsh)

source of article: http://news.yahoo.com/tiny-remnants-war-found-omaha-beach-sand-165332327.html#

Get In The Oil Business: Making Money From A Distance With The Bakken

I've been following Michael Filloon for a couple of years and he provides some very good, and I think accurate information.  I think that if you want to learn about the oil and gas business it helps to have "some skin in the game".......in other words, invest in the stock of some of these companies.  You WILL follow their ups and downs, and you will read the news, and pay more attention to political issues. 

Then if you're smart and get lucky, you might make some money.  For example, Brigham turned a nice profit when it was bought out by Statoil, and likewise when Petrohawk was acquired by BHP Billiton (?).

This is all a learning experience, for almost everyone.  I appreciate Mr. Filloon's analysis and commentary.
Peter

To read all of the following article, go here: http://seekingalpha.com/article/632641-bakken-update-continental-resources-well-results-are-getting-better?goback=%2Egde_156898_member_121215590

Bakken Update: Continental Resources' Well Results Are Getting Better

June 2, 2012 | 28 commentsby: Michael Filloon | includes: KOG, OAS, STO, WLL

About the author: Michael Filloon

 

 

Michael Filloon

 

I have done a series of articles covering recent well results by Bakken operators. Information garnered from this shows improvements in 90-day IP rates. The main reasons are stimulation improvements from increase stages and proppant, but these companies are doing a better job in all phases of production. It wasn't long ago we were seeing 10 stage short laterals, and now long laterals with 30+ stages are common place. In my opinion, the two best operators are Kodiak (KOG) and Brigham (STO). It should be noted both have very good acreage positions as well. Kodiak's Polar and Koala prospects are its best, while Brigham's Alger Field acreage is thought by some to be the best in the Bakken. Whiting (WLL) has had some very good completions in Sanish Field, and has been the first to work the Pronghorn. Oasis (OAS) is getting much better, with significant upside in the Camp Field area.
Continental (CLR) may be the best way to follow the Bakken. It has a large acreage that covers a significant area in North Dakota and Montana. Because of this, it has well results in virtually every area of the Williston Basin. Here are its 4Q 2011 and 1Q 2012 well results.

Oil And Gas, The Kind Of Hope And Change America Needs Now

Jobs being created, money being earned, taxes being paid instead of tax dollars being spent, royalties and taxes filling state coffers, the entire emotional mood of the country becoming positive.......yes, all of those things are happening.  I believe American creativity (combining horizontal drilling and hydraulic fracturing of petroleum-bearing rocks), combined with industriousness and ambition, are proving America and its economy will not stay down.  That's who we are, what we are: fighters, survivors, competitors.

Ok, enough cheer leading, but what is happening in the oil and gas industry excites and pleases me.  The following articles just refer to the Marcellus Shale Play in the Appalachian Basin in the northeastern U.S.  There are many other such plays, some being developed, some not thought of yet.  I think things are looking up.  Let's keep it going.
Peter

June 4, 2012 | PERMALINK | @MarcellusGas

What They’re Saying: American Natural Gas
“Offers Hope in Hard Times” 

Pittsburgh, Pa. – There is no question that the U.S., and global, economy continue to face historic challenges. In spite of the many ongoing economic recovery and job creation hurdles impacting countless families and businesses across the nation, the responsible development of clean-burning American natural gas remains a silver lining. Indeed, American natural gas is offering “hope in hard times” and is Building a Stronger, More Secure America. Here’s what they’re saying:

·         Fmr. Pa. Gov., Phila. Mayor and DNC Chairman Ed Rendell: This influx of jobs and investment spurred an unprecedented economic boom for our state and, thanks to a resource found right here in Pennsylvania, this economic revitalization continues. Cheap, clean, and abundant energy is available to heat our homes, fuel our cars and trucks, and power our state’s economy. It’s not a campaign slogan, it’s reality. … While improved air quality and savings at the pump are key advantages of natural-gas vehicles (NGVs), the most critical benefit is our increased economic, energy, and national security. America’s dependence on foreign oil puts our citizens and our economy in jeopardy. Year after year, as OPEC continues to raise the price of oil, we cannot afford to continue relying on unstable, undemocratic regimes to provide our energy. Natural gas offers a solution, an American solution, produced right here in Pennsylvania. … Despite these overwhelming benefits, there is a misunderstanding that residents must make a choice between protecting the environment and ensuring the dependable production of sufficient energy for power generation and transportation. This is a false choice. Pennsylvania can have both. … Natural gas can foster an economic, environmental, and security revitalization for our country and our state. (Philadelphia Inquirer op-ed, 6/3/12)

·         Pa. DEP Secretary Michael Krancer: Our ability to unlock the huge clean burning energy source contained in unconventional shale formations has transformed Pennsylvania into an energy exporter and will ultimately move our nation toward energy self-sufficiency. In addition, we are looking at an economic and energy transformation. We have already seen tens of thousands of new jobs here in Pennsylvania from the industry itself as well as from new industries spawned to support it. These are good paying career jobs in many fields. And that is just the start. There will be hundreds of thousands more good paying skilled and unskilled jobs in a variety of sectors. (Congressional testimony, 5/31/12)

·         “America’s Shale-Gas Revolution Offers Hope in Hard Times”: The story of America’s shale-gas revolution offers hope in hard times. … America’s shale-gas industry has since drilled 20,000 wells, created hundreds of thousands of jobs, directly and indirectly, and provided lots of cheap gas. This is a huge advantage to American industry and a relief to those who fret about American energy security. … America’s emissions have fallen by 450m tonnes in the past five years, more than any other country’s. (The Economist, 6/2/12)

·         “Shale Gas Boom Could Bring Manufacturing Jobs Back to U.S., Economists Say”: The shale gas boom hitting Ohio, Pennsylvania and several other states could provide a major advantage to manufacturers in the United States -- cheap energy that could significantly cut the costs to produce goods here, a group of economists said Thursday. "By 2025, the manufacturing sector alone could save $11.5 billion in energy costs," Robert McCutcheon, an economist with consulting group PwC, said at a manufacturing summit hosted by the Federal Reserve Bank of Cleveland. McCutcheon's company, formerly called PriceWaterhouseCoopers, released a study late last year predicting that as many as 1 million new U.S. manufacturing jobs could come from lower-cost energy. (Cleveland Plain Dealer, 6/1/12)

·         American Natural Gas Has Had an “Astonishing” Economic Impact, “Continues to Amaze”: America’s “unconventional” gas boom continues to amaze. … America’s gas boom confers a huge economic advantage. It has created hundreds of thousands of jobs, directly and indirectly. And it has rejuvenated several industries, including petrochemicals, where ethane produced from natural gas is a feedstock. … This is astonishing. Barely five years ago America was expected to be a big gas importer. Between 2000 and 2010 it built infrastructure to regasify over 100 billion cubic metres (bcm) of imported liquefied natural gas (LNG). Yet in 2011 American LNG imports were less than 20 bcm. … So long as well-shafts are properly sealed, there is hardly any risk that fracking will poison groundwater. (The Economist, 6/2/12)

·         Marcellus Shale Creating Blue-Collar Union Jobs in Western Pa.: Two skilled laborers toil around an automated pipe-cutting machine at Chapman Corp.’s new $6.6 million pipe fabrication shop, using laser precision technology that cuts the man-hours for a job from a full day to a half-hour. Nearby a custom-built “shake and bake” paint room allows the company to reduce the time it takes to paint pipelines for the Marcellus Shale natural gas industry from two days to eight hours or less, said Ron Delsandro, shop coordinator. “We can get that order out a day sooner,” Delsandro said Friday when the Washington-based company held an open house for the new shop, which is as long as two football fields. That’s how much of a demand there to meet the pipeline needs of the gas and oil industry, which is booming across Washington and Greene counties. (Washington Observer-Reporter, 6/1/12)

·         Clean-Burning Natural Gas Boosts Family Farmers: The oil and gas boom in western Pennsylvania has provided a much-needed infusion of capital to farmers in that area, members of the Tuscarawas County Farm Bureau learned during a trip to the Keystone State on Tuesday. “It’s had mostly a good impact,” said Steve Quillin, local Farm Bureau president. “Just driving around, we saw farmers making improvements and updates to their properties.” Money from oil and gas leases has allowed agriculture to expand, added Jerry Lahmers, chairman of the policy development committee for the organization. … The boom has benefited others beside farmers. Quillin said the owner of the restaurant where they ate lunch has seen his business triple in the past year.The oil and gas boom in western Pennsylvania has provided a much-needed infusion of capital to farmers in that area, members of the Tuscarawas County Farm Bureau learned during a trip to the Keystone State on Tuesday.“It’s had mostly a good impact,” said Steve Quillin, local Farm Bureau president. “Just driving around, we saw farmers making improvements and updates to their properties.” (New Philadelphia Times Reporter, 6/2/12)

·         American Natural Gas Creating Local Jobs: Low-cost natural gas also produces cheap fertilizer for farmers, thus lowering food prices, and feedstock for chemical plants, for cheaper plastics and other basic materials. Industries can now return to the United States and provide jobs locally. (Washington Times op-ed, 5/29/12)

·         “Phila. Gas Works Lowers Prices To Natural Gas Customers”: Good news for PGW natural gas customers: your monthly bill is going down. The Philadelphia Gas Works is lowering the price of natural gas by 2½ percent, and that should save the average customer more than $34 per year, according to spokesman Barry O’Sullivan. “Supply right now is abundant.” … O’Sullivan says this is the fifth quarter in a row without a rate increase, and compared to this time last year the average customer is paying $181 less for natural gas. (CBS Philly, 6/1/12)

·         More Natural Gas Jobs En Route to the Rust Belt: A natural-gas processing hub being developed in a partnership between Chesapeake Midstream Development, M3 Midstream and EV Energy Partners will be located on state Route 151 northwest of Scio, a North Township trustee has told Harrison County commissioners. ... The hub will receive and process natural-gas liquids, such as propane and butane, that are being extracted from Ohio’s Utica Shale. The facility is expected to be one of the largest of its kind in eastern Ohio and will create 50 to 125 jobs. (New Philadelphia Times Reporter, 6/1/12)

·         Building a Strong Local Workforce: Gas companies and the people who want to work for them packed the Wyoming County Fairgrounds Friday for the inaugural Business, Job and Gas Expo. The Wyoming County Chamber of Commerce has held annual job fairs for more than a decade and three years ago began hosting a yearly natural gas expo to connect local businesses and the emerging drilling industry, but this year’s fair was the first to unite the two concepts. … “When we’re looking for employees we are finding folks who are locals who have the skills,” said Helen Humphreys of gas-infrastructure company Williams. “As I look forward from two years ago there’s been a tremendous amount of collaboration between education and the industry.” (Times Leader, 6/2/12)

NOTE: Follow the Marcellus Shale Coalition (MSC) on Twitter (@MarcellusGas) and like us on Facebook for news about job-creating American natural gas development.

Gas (LNG) Is Where It's At

I have no investment interest in the following company, or what they recommend.  I just found the  information interesting.  For a long time it was considered impractical to transport large volumes of natural gas in any way other than through pipelines.  This required those producing natural gas to have a nearby market, which made exporting the gas in tanker ships not an option.  Well that is changing, and it looks like in a big way.

There is a huge amount of natural gas underlying the North Slope of Alaska.  We've known about it for decades.  It amounts to Trillions of cubic feet of high value product that could be produced if a way could be found to get it to a market.  The same goes for all the gas in western Canada, and I imagine northwestern Canada's Mackenzie Delta region.  The potential is enormous.  All that is needed (no small task) are pipelines to get it to a seaport on Canada or Alaska's Pacific Coast and then into LPG tankers like those described in the following article.

I was thinking today of all the Liberty Ships and tankers built in just a few short years during World War II in American shipyards.  I also realized that America crushed the vast Japanese Empire over much of the Pacific and Asian area in just about four years, about the same amount of time the current Administration has been in office in Washington, D.C..  Trillions of dollars have been spent in the last few years by the Federal Government and what have they accomplished?  Precious little, to say the least.  My point is clear.  Something is dreadfully wrong.  I'll leave the details of that for another day, in another venue.  This is not really the place for politics.

So think about the possibilities that lie before us: we have abundant natural gas, producible with proven technology, and an eager market for it, primarily in Asia.  What are we waiting for?  I'm certain I'm not alone in this line of thinking.  Any comments?
Peter

LNG Carrier




Dear OGIB Reader,

In Part 1, I explained how the Japanese will most likely solve its power shortage, now that there are NO nuclear plants running.

One of the biggest answers is LNG—Liquid Natural Gas—and an emerging LNG technology that is growing around the world... and could be a fast answer to Japan’s dire need to quickly replace their nuclear power.
It’s called FSRU—which stands for Floating Storage and Regasification Unit. It’s a floating LNG import terminal — at less than half the cost of an onshore facility.  The benefits to Japan now—which is in a proverbial "space race" to meet its electricity needs, are that they can be ordered, made and delivered in 2-3 years, vs. 5-7 years for an onshore import terminal.

FSRUs and onshore LNG import terminals take LNG and regasify it—taking it from the liquid form, where it is reduced 600:1 in volume and expanding it back into a gaseous form where it’s usable to make electricity in your home, and for other uses.

Both facilities need a berth for the LNG ship, storage tanks and pipelines. But the traditional, land-based terminals can cost upwards of $700 million for a facility with a peak capacity of about 7.75 million tons per year (around 1 bcf/d). Terminals operate at roughly half of their peak capacity.

These onshore facilities can take 5-7 years to be planned, constructed and brought online, which means they are not ideal for Japan's current situation.

As I said, FSRUs are custom-built vessels — similar to the LNG carriers but with the ability to turn LNG into its gaseous form.

FSRUs not only get to market faster, but cheaper:  A newly built FSRU costs close to $260 million, according to Unit Economics (and they do the best research in this sector, by a nautical mile).

One company has even started converting old LNG carriers into FSRUs, for which Unit Economics says the cost is more like $160 million—and can be ready in just 14-16 months.

Another advantage is that they can be moved to wherever demand is highest for the regasification of LNG.

However, FSRUs have one big drawback—less capacity. Most have a peak capacity of around 4 million tons annually (about 500 million cubic feet per day), though some of the new ones are getting closer to 1 bcf/d.

A potential drawback for the Japanese could be that this technology is so new, there are only 10 working in the world right now, with another seven being tendered.

So while they are proven, they cannot yet be called mainstream. But there are already several large shipyards able to build them, and competition for bids is intense; i.e., there is a healthy supplier’s market.

Still, it should be noted that even if Japan goes with FSRUs, it will still to take some time for them to start importing LNG. This time gap is another reason Drolet believes nuclear reactors will have to come back online to meet the country's energy needs.

- Keith

Publisher's Note:  LNG is one of the only bull markets right now in energy.  The FSRU market is at the leading edge of this.  They are new and exciting, and the growth rate right now is huge—likely 100% in the next two years.  And the profits are rolling in fast for one of the leading companies in the space.  This company has already built and sold 4 of them.  The thing to keep in mind here — FSRUs are different than LNG carriers in that they are much longer contracts (10- to 20-year contracts), with great long-term cash flow—exactly the thing you can plan a dividend around.

And that's what this company has done — having increased its dividend in each of the last four quarters.  The total dividend increase during this time is 40%. How many companies are doing that in this market?

Analysts are calling for quarterly EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to DOUBLE in the next quarter—a 100% increase in just one quarter. Its utilization is 100%, and operating profit margins are an eye-popping 80%.  That's why they are one of the most profitable companies in the worldwide energy sector.

I bought the stock this week myself.  And I encourage you to learn all you can about this play — Click here to keep reading...

Oil And Gas Industry To The Rescue

Pssssst......spread the word.....the oil and gas industry is creating jobs, hiring people, paying taxes instead of spending taxpayers money, and producing inexpensive (natural gas) energy.  In addition to that good news, the myth of man-caused global warming is finally being put to rest, (see here) and things are looking up, a lot more than they have been the last few years anyway.   Let's keep this kind of activity going.
Peter

Drill, Drill, Drill = Jobs, Jobs, Jobs

June 2, 2012 | 21 commentsby: Mark J. Perry | 

Mark J. Perry

• Articles (961)
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While yesterday's disappointing employment report reflects an economy struggling to create jobs during an extended, sub-par "jobless recovery," it's been a much rosier employment picture in one of America's most successful "shovel-ready" job-creating industries: Oil and Gas Extraction.
The chart above displays the monthly percentage changes in employment levels since January 2007 for oil and gas extraction jobs compared to total nonfarm payroll jobs. As of last month, total nonfarm payroll employment is 3.0%, and 4.1 million jobs, below the January 2007 level. In contrast, the explosion of new oil and gas jobs has increased employment in that industry by more than 38% since January 2007. Over the last 12 months, oil and gas companies have added 21,800 new workers, at a rate of almost 100 new hires every business day. And this just accounts for the new jobs created that involve the actual drilling, extraction and production of oil and gas.
A recent study found that for every one new job added in oil and gas extraction activities, there were three new additional jobs created elsewhere in the economy. The report also found that "the jobs-multiplier effect of U.S. oil and natural gas activity is higher than many other U.S. industries, including the financial, telecommunications, software and non-residential construction sectors. This is the result of the energy industry’s long supply chains and relatively high levels of spending by employees and suppliers." As a result of the multiplier effect, the U.S. economy has potentially been adding almost 400 new jobs per day over the last year due to increased oil and gas production.
Imagine what the jobless rate might be today, and imagine all of the additional shovel-ready, energy-related jobs (direct and indirect jobs) that could have been created over the last several years in the oil and gas industry (and its supporting industries), if the Obama administration: a) hadn't been so unfriendly to the low-cost, job-creating, dependable fossil fuel industry (think Keystone XL pipeline for example) that doesn't require picking the pockets of the taxpayers; and b) instead been so over-friendly to the subsidy-dependent, high-cost, unreliable but politically-favored "green" energies. On the other hand, imagine what the jobless rate might be today if we hadn't had the tremendous "energy-stimulus" to the U.S. economy that has resulted over the last few years from increased oil and gas drilling due to technological advances of hydraulic fracturing and horizontal drilling, and taking place mostly on private land?

Oil And Gas Shale Plays: Major World Game-Changers

These oil and gas shale plays are very significant folks.  This is true even if what is presented below seems too good to be true.  I think it is true and the best is yet to come........of course I'm an explorationist, and those who explore are optimistic; we must be or we would never step out into the dark.
Peter

Mayer Brown 2012: Shale Plays Rock Geopolitical Boat

By Scott Weeden, Senior Editor, Production Technology

source: http://www.epmag.com/Production/Mayer-Brown-2012-Shale-Plays-Rock-Geopolitical-Boat_101024?goback=%2Eamf_160875_39446724%2Egmp_1905553%2Egde_1905553_member_119868890

 

 

E&P Buzz Oil and Gas Investor [Weekly] Unconventional Oil & Gas [Weekly] Hart Energy Store Careers

The game-changing development of shale oil and gas in the United States has motivated countries around the world to tap potentially massive resources.

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Shale will alter the energy security picture for major end-use markets, limiting individual producer petro-power and creating a more competitive marketplace for LNG and potentially enabling further market liberalization in Europe and elsewhere, said Amy Myers Jaffe.

“What has changed is that now we have this huge potential of resources that are exactly where the demand centers are,” explained Jaffe, director, Energy Forum at the Baker Institute, Rice University. “That changes not only the geopolitics of oil and gas, but also the business model that companies are going to follow.”

One example of a change in geopolitics involves petrodollars. “Think about the economic impact of shipping all those dollars to Saudi Arabia. Where do they put those dollars?” she asked participants on May 23 at the seventh annual Mayer Brown conference on Global Energy: The New Frontier.

“This money comes flooding into the stock market with all of you. There’s a bubble and you lose everything you own,” she said with a laugh. “How many times has that happened -- at least four times.

“When you pay $5 at a gasoline station, imagine if that money stays here with new jobs in Pennsylvania instead of in the Middle East. It would make a real difference to your and my quality of life just to have that money stay here. It certainly is true that it matters to have the production be here,” she emphasized.

And, that wave of U.S. production is washing over other areas in the world as well. “Even though the European shale hasn’t been developed yet, just having U.S. shale be developed already has Gazprom on the run. You already have some gas-on-gas pricing from Russia to Europe. The market share of Russia in non-FSU Europe is falling and could be below 13% by 2040.

“It’s really changed the techno-power aspect of international dialogue, and it’s also created opportunities for IOCs and independents in terms of negotiating strength,” Jaffe said.

One more aspect of the impact in Europe is that “the ride back to liberalization is a possible natural outcome. There are lots of barriers to having that happen,” she continued. “But, we’ll be seeing a lot more liberalization on the European continent.”

Shale plays are having an impact on how countries are approaching resource development. The nationalization of YPF by the Argentine government, for example, fits in the context of huge shale resources.

Jaffe explained that Argentina was willing to privatize YPF when the government thought there were hardly any resources left in a poor, picked-over basin.

“When suddenly they realized there were billions of barrels of oil and gas equivalent in the ground, then they weren’t so enthusiastic about not having a national oil company. That’s my interpretation of why that happened,” she added.

The Baker Institute has been doing a study on estimated ultimate recovery (EURs) in shale plays around the world. “If you look at Argentina, it’s very, very attractive. There are a lot of companies down there now -- Shell, Exxon and a few others,” she said.

Mexico is another country that could be a major shale player if the country decides to reform the sector. “They are talking about creating a new entity to do shale gas. If they do that, it would be a game-changer. I’m not saying it’s going to happen, but at least they are talking about it,” Jaffe noted.

In the Middle East and North Africa, “the Jordanians want to pursue their shale. Morocco believes they have shale. Oman is looking for shale,” she continued.

China’s shale market is expected to grow slowly and provide 15% of the domestic market. However, there are three challenges for developing China’s shale resources: 1) in many areas, there are problems with water resources; 2) there is a lack of infrastructure; and 3) some of the shale is in mountainous areas where it is not easy to drill, she explained.

In the U.S., the industry now realizes that oil is not limited to the Bakken formation. “People are developing the technology and becoming more sophisticated at it. The results we are seeing in the Eagle Ford are quite substantial,” she stated.

“Some people say that by next year, we’re going to have 1.0 million barrels per day (MMb/d) of oil production onshore in the U.S. just between the Eagle Ford and Bakken,” she said.

However, there are more oil plays than that. The list includes: Bakken in North Dakota; Permian, Avalon, Bone Springs, Wolfcamp and Eagle Ford in Texas-New Mexico; Utica in Ohio; Marcellus in Pennsylvania; Niobrara in Colorado-Wyoming; Sunniland in Florida; Tuscaloosa Marine in Louisiana; Mississippi Lime in Oklahoma; and Monterrey basin in California.
“You can see it’s a pretty long list, and it’s not a Texas-Louisiana play. We have northwest Pennsylvania, Ohio, Florida and California,” she emphasized.

Total technically recoverable resources are estimated at 60 billion barrels. “If that turned out to be a correct estimate, that would support 2.0 MMb/d, and that is really world class. We’re talking about a big resource.”

The U.S. could be relatively self-sufficient by 2025. Shales could add 3.0 MMb/d. The Gulf of Mexico could add 2.0 to 3.0 MMb/d and raising automobile standards to 54 mpg could shave off 4.0 MMb/d. “We’re talking about very low levels of imports to the U.S.”

In a reference case, the Baker Institute estimated that U.S. shale gas production will exceed 50% of total production by 2030. The strongest long-term production is in the Marcellus and Haynesville shales, followed by the Barnett, Eagle Ford and Fayetteville shales.
In Canada, shale is expected to reach one-third of natural gas output by the 2030s, Jaffe said.

The institute has run computer models of liquefied natural gas exports through 2040. “We’ve run computer simulations. The computer never ships U.S. gas to Asia. Bottom line is that your project from Horn River is what gets exported. Something will be exported. Whether it is from the Gulf Coast is another question,” she continued.

Contact the author, Scott Weeden, at sweeden@hartenergy.com.

Book Review: "Run To Failure", The BP Deepwater Horizon Gulf Of Mexico Disaster

I plan on reading this book when I get the time.  It sounds very thought provoking, entertaining, informative, and valuable.  I think the following book review is excellent.  I'd like to hear comments from some professionals in the industry with a more "insiders" view.  Nobody wants another disaster like the BP blowout in the Gulf Of Mexico.  Maybe some open discussion can prevent another.  I hope this does not offend anyone.  It is not meant to.
Peter 

Book Review: Run To Failure - BP And The Making Of The Deepwater Horizon Disaster

June 3, 2012 | 1 commentby: Rookie IRA Investor | about: BP

source: http://seekingalpha.com/article/633051-book-review-run-to-failure-bp-and-the-making-of-the-deepwater-horizon-disaster?source=email_macro_view&ifp=0

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Here's the opening paragraph of Abrahm Lustgarten's book Run To Failure--BP And The Making Of The Deepwater Horizon Disaster

The burst of gas came from so deep within the bowels of the earth it may as well have come from another world. Thirteen thousand feet beneath the ocean's silty floor and the earth's crust and another five thousand feet underwater-a total depth farther than fourteen Empire State buildings stacked atop one another-hydrocarbons in the form of hot fluid saturated with dissolved methane seeped through the reinforced walls of a new oil well. The well, an exploratory venture drilled by BP and called Macondo, was a three-mile-long tube of cement and steel that had been burrowed into the million-and-a-half-year- old rock in the weeks before. It was one of the industry's most important new efforts to find oil in the deep waters off the southern coast of the United States, and, while not the deepest, the Macondo was pushing the limits of drilling.

The book is written in a typically modern cinematographic style with fast forwards and flashbacks, and is focused on a small number of key characters, which gives it the feel of a novel, and reminds me stylistically of Peter Benchley's popular classic Jaws. For example we are introduced to a government lawyer like this:

Jeanne Pascal turned on her TV on April 21, 2010, just a few hours after the blast, to see a spindle of black smoke slithering into the sky from an oil platform on the oceanic expanse of the Gulf of Mexico. Right away she thought that it was a BP disaster unfolding on the screen. For a long while she sat transfixed on an overstuffed couch in her Seattle-area home, her feelings shifting from shock to anger. God, they just don't learn, she thought.

This is an excellent book that anyone who is interested in investing in oil stocks ought to read, if only for the detailed background and history of the oil exploration industry that it brings to the table, an appreciation of the risks of oil exploration and production, and a partial explanation for the volatility of energy stocks.
The author's main thesis is that BP (BP), historically has been accident prone because of a tendency to push for higher profits by cutting costs on the ground, which means reducing maintenance, cutting redundancies out of staff schedules, etc.
At the same time CEO's like John Browne and Tony Hayward constantly announced new initiatives to improve safety. The problem was that while they reduced minor accidents by encouraging employees to use handrails or shoes studs in icy weather, or seat belts in vehicles, that didn't prevent massive disasters like the Texas City oil refinery and later the Deepwater Horizon.
Part of the problem may have been a cultural conflict between the British top management and the US work force inherited from Amoco when the two companies merged. Typically US workers like to have a high level of supervision and to be told what to do with strict checks in place, whereas British companies prefer a less regimented approach that put more trust in qualified employees to use common sense and do the right thing according to the situation.
This example exemplifies the dilemma:

When Tony Hayward took the helm at BP, he swore that everything would change. BP would be a new company, stripped of all that had led it down the perilous path of the past few years but still strong and profitable and growing. He was inclined to believe that the past was in the past, and in 2007, he was charting his own ambitious path for the company into the future.
For all of John Browne's remarkable successes in the twelve years he had run the "assurance." These are the layers of checks, balances, and systems meant to ensure that decisions aren't made hastily; that workers' concerns are communicated to management; and that regulations guaranteeing safety aren't abused for the sake of expediency.
In (Hayward's) view there were too many protective layers. Forethought and safety had become bureaucracy, and excessive cautiousness was paralyzing. For Hayward, assurance equaled waste.
"Assurance is killing BP today," Hayward told the town hall gathering in Houston the same day he shocked the markets by characterizing his own company's performance as "dreadful." "Right now we have multiple layers of assurance, too many layers. I don't think that having all these layers of assurance reduces risk, and it can actually increase it. The best way to reduce risk is to have deep technical competence where we need it. Individuals need to be accountable for risk, and to manage it."

And so we learn that at the time of the Texas oil refinery disaster the site supervisor on duty on the day shift was working his thirtieth 12-hour shift in succession and that when he was called away on an emergency with a sick family member, the lack of redundancy in the schedules meant that there was no one of equivalent status left behind to oversee the reactivation of a raffinate splitting tower and that an inexperienced control board operator was left in charge during a period in which the tower which was supposed to be filled with highly flammable fuel to a depth of 8 feet was filled to 140 feet without anyone catching on that something was wrong.
This unfortunately exploded and led to the incineration and death of contract workers in trailers that were situated much too close for safety to the raffinate splitter tower. Ironically the trailers that burned were decorated with banners celebrating the safety record of the contractor.
The book, however contains much more than a detailed social history of some disasters, and gives the reader a great deal of background information about the global oil industry, the Alaska North Slope, The Exxon Valdez disaster, the Trans-Alaska pipeline system, the Gulf of Mexico, and the geopolitics of the energy business, all parceled in a very easy-to-read package.
You will no doubt come away wondering about the wisdom of rewarding senior executives with large bonuses linked to the price of a company's stock, when boosting the share price might come at the cost of risking the lives of employees and making children into orphans. Whatever happened to the idea of a fair day's pay for a fair day's work?
You may also wonder about the wisdom of management by statistics, when accident can be reduced numerically by using enforcing hand rail and seat belt usage, while losing sight of the much greater risks of dealing with the forces of nature.
Steven Spielberg who directed the movie version of "Jaws" had the best take on the original book version of "Jaws" when he said that the characters in it are so unlikable he pulled for the shark.
If you enjoyed Jaws, you will probably enjoy this book too, and if you can read between the lines of some of the more sensational parts, you can come away with a deeper understand of the oil industry and the safety, environmental, and political issues that have plagued the oil business.
Disclosure: I am long BP.