Europe Has Much To Learn About Shale (Unconventional) Gas

Before anyone gets too excited about the potential for shale gas or what some term "unconventional" gas potential in Europe, it must be recognized that there are political and environmental issues in Europe that are greatly different from those existing in the United States.

However, with the worldwide attention the problems with deepwater oil production in the Gulf of Mexico is receiving, the potential for finding and producing clean-burning natural gas, onshore, is drawing increasingly greater attention. The demand is there. The technology to find and produce this gas exists. It is the other problems which need to be overcome. Many countries in Europe could use an economic boost right now.
Peter

Does Europe Have Unconventional Gas?

(source)

It provides about half of the U.S. domestic natural gas production. And the U.S. product has already begun to shake up the market for gas in Europe. But the production of unconventional gas, which is usually tightly trapped in rocks and hard to extract, doesn’t seem likely to have a bright immediate future in Europe.

From a geological viewpoint, you could extract unconventional gas in Europe, according to Don Gautier, from the U.S. Geological Service. But that’s not the only thing that matters. Unconventional gas fields, particularly those tapping so-called shale gas, are very large and require the development of hundreds of wells.

Bloomberg

Chesapeake Energy drills on the Barnett Shale.

A field in northern Texas called Barnett Shale has about 8,000 wells covering an area roughly comparable to Belgium, the Netherlands and Luxembourg combined, Mr. Gautier says. “You can’t look at these wells as one well at a time, you have to look at thousands as a development plan,” says Mr. Gautier.

That is almost impossible for Europe, given high population density, regulatory difficulties of getting permits to drill over large areas that sometimes cross borders, and likely opposition from environmentalists and affected residents.

A new technology of digging horizontal wells — drilling vertically drill and then pushing out parallel to the ground — might offer some leeway.

Of course, all of this begs the main question: How much unconventional gas does Europe have and where are the main concentrations?

The country which promises most is Poland, where the government has granted concessions for research. However, the first exploration well is just being started, and the first estimates of how much gas is really there won’t come for four to five years, with production in 10 to 15 years, according to Ewa Zalewska, director of the department of geology and geological concessions at the Polish environment ministry.

“Shale gas is the gold rush of the 21st century,” she says. However, “it is too early to answer all the questions.”

Update: Perhaps by the time the first gas emerges, Bronislaw Komorowski, Poland’s likely next president, will have figured out that you don’t dig unconventional gas out of the ground like brown coal.

Shale Gas Production Methods To Be Used Overseas

Why not take the technology mastered in the United States in the Barnett Shale, Haynesville Shale, Fayeteville Shale, Marcellus Shale, Bakken Formation, etc. and use it in shale formations containing gas in other parts of the world? It makes perfect sense and it is bound to happen. American companies with this expertise should position themselves to take advantage of this opportunity.
Peter

American drilling techniques may migrate overseas
By MARK WILLIAMS AP Energy Writer (source)
With one eye cast toward home, giant European energy companies are investing billions in U.S. natural gas and oil fields where huge, hard-to-get reserves have been unlocked with new drilling technology.

That technology is the prize in Europe, where gas production has declined and where an international utility dispute recently left people in more than a dozen European countries shivering in unheated homes.

Europe's natural gas supply is routed through Ukraine from Russia. Russia supplies about one-quarter of the EU's natural gas, with 80 percent of it shipped through Ukraine. A rift between the two nations left more than a dozen European countries with little or no gas for two weeks last month.

Declines in European gas production has potentially made the new techniques used in the U.S. even more pivotal.

At least three European oil and gas giants are developing or have bought interests in oil and gas shale projects in the U.S. - Norwegian oil company StatoilHydro, the U.S. unit of British oil company BP Plc and French company Total.

StatoilHydro and BP have agreed in recent months to pay billions of dollars for stakes in shale gas projects from the top U.S. producer of gas, Chesapeake Energy. Total has bought a 50 percent stake in a U.S. company exploring for oil shale in the Rocky Mountains.
"Given the magnitude of oil shale resources we believe that this project has an important long-term potential for global energy markets," Yves-Louis Darricarrere, Total's exploration and production president, said in announcing Total's deal with American Shale Oil.
Shale is a kind of layered, sedimentary rock that exists in formations throughout the world. In the U.S., gas production from shale dates back to the 1800s.

But the gas, tightly locked in rock formations, had been extraordinarily expensive to extract. That began to change about 15 years ago as producers developed new techniques such as horizontal drilling, where the drill is turned in a right angle to bore into a gas reservoir horizontally.

Gas from shale now amounts to about 5 percent of total U.S. production, according to the Gas Technology Institute.

If the same technology works in Europe it could free up an enormous amount of energy, and potentially provide a buffer against cross-border disputes to the east.
StatoilHydro bought into Chesapeake Energy's massive Appalachian Marcellus shale project for $3.37 billion in November. Executive Vice President Rune Bjornson said at an energy conference this month in Houston that StatoilHydro wants to bring new drilling technology to other regions of the world.

If the race to duplicate drilling success in the U.S. is on, few companies are talking about it.
Even Aubrey McClendon, co-founder and chief executive of Chesapeake, the largest natural gas producer in the U.S., said, "I doubt we will trumpet it as I think the combination of their international stature and presence and our knowledge of gas shale would do nothing but attract competition."

But it has become abundantly clear since a chilly two weeks in January that Europe's energy security has been diminished since the break up of the Soviet Union.
Buying into the technology in the U.S. makes sense and could spare European companies years of development, said Don Hertzmark, an international energy expert.
"The Europeans never bothered to develop this stuff," he said.
U.S. companies stand to expand through new markets in Europe if the new techniques work, and many experts believe that they will.

Energy companies are now funding a six-year study to locate gas deposits in Europe and to determine if they can be exploited.
"The companies that are involved here - they're not beginners," said Brian Horsfield of the GFZ German Research Center, which is heading the study. "It could come online within three years if it turns out these gas shales really are as prolific as we're led to believe."
Horsfield, a professor of organic geochemistry, said companies already have acquired land rights throughout Europe.

"The shale gas, if it were to be economic here, is very close to the user," Horsfield said. "That's one of the selling points, certainly, of our project on a nonscientific basis. And the events of the last month or so have helped to stress that."

European Commission President Jose Manuel Barroso said after the dispute between Russia and Ukraine was settled (the second dispute in recent years) that Europe must diversify its energy sources and supply route.
"It was utterly unacceptable that European gas consumers were held hostage to this dispute between Russia and Ukraine," he said.

Associated Press writers Patrick McGroarty in Berlin and Greg Keller in Paris contributed to this story.