In this case the industry is the oil and gas industry. The Obama Administration, and unfortunately many in Congress and the American people, have been led to believe that the oil and gas industry is an untapped gold mine. They seem to think they can reap Billions of dollars of revenue from the industry by simply raising taxes. This kind of thinking has dire unintended consequences which need to be addressed.
One obvious consequence is these taxes, these added costs to the industry, will be passed on to consumers, meaning higher prices of oil and gas for you and I. So the tax is essentially an added tax to us taxpayers. Is this really good for our economy?
Also, by increasing taxes on the oil and gas industry, and further hobbling them by limiting areas where they can explore for oil and gas, the consequence is a shortage of oil and gas, leading to higher prices and an even larger dependence on foreign sources of oil and gas. How is this good for the U.S. economy? How will it create jobs? The oil and gas industry should be encouraged, not discouraged.
Few people outside of the oil and gas industry understand the enormous cost and risk involved in exploring for and producing oil and gas. The industry is unique, I think, in that regard. Our government, by failing to understand the basic economic principle of risk vs. reward, does immeasurable harm to the industry, the economy, and American people.
The fact is, the risk (and cost) of exploration and production is so great that if the "reward" is removed, companies and investors will not take the necessary risk. Who suffers, who pays when this happens? Everyone, consumers, taxpayers, and ultimately the government itself. The following article in the Fort Worth (Texas) Star Telegram summarized the situation.
Peter
Obama's proposed tax increase would stifle drilling, energy executive says
By JACK Z. SMITHjzsmith@star-telegram.com (source)
President Barack Obama’s proposed tax increases of more than $80 billion on the U.S. oil and gas industry over 10 years would crimp drilling activity and lead to higher energy prices for consumers, the CEO of the largest operator in the Barnett Shale said Tuesday.
Larry Nichols, head of Devon Energy and chairman of the American Petroleum Institute, said the higher taxes would reduce oil and gas companies’ cash flow, resulting in less money to drill wells. That would tighten supplies and raise prices, he said at a Fort Worth Chamber of Commerce luncheon.
"The strange thing is, they don’t realize the consequences," Nichols said, referring to Obama administration officials pushing for the increased taxes, which the petroleum institute estimates would cost the industry $84.4 billion.
Profits as 'gold bars’
In Washington, Nichols said, energy companies’ profits are considered "gold bars in the back room that we don’t know what to do with," rather than as a vital source of cash for drilling wells and creating jobs.
Supporters of the proposed tax increases counter, however, that they are equivalent to only a small part of energy companies’ revenue and profit. They stress that a single company, Irving-based Exxon Mobil, made a record after-tax profit of about $45 billion last year, an amount totaling more than half the proposed tax increases over a decade.
But energy companies’ fortunes have plunged this year as a result of a huge drop in oil and gas prices.
As a result, Nichols said, there has been an exceptionally rapid decline in drilling activity in recent months. Natural gas drilling in the Barnett Shale, while still substantial, has diminished to less than half its peak level. That’s setting the stage for a decline in production and a doubling of gas prices, Nichols said.
Offshore drilling
Nichols lamented the prohibition of offshore drilling off most of the U.S. coast, which he said have "really awesome oil and gas reserves." Soaring energy consumption in fast-growing developing nations such as China and India means that the world is "going to need more oil, and we’re doing to need more natural gas," he said.
More immediately, however, the industry is absorbed in staving off the proposed tax increases, Nichols said, putting the industry’s chances at "50-50."
Thursday, April 2, 2009
Summary: The Marcellus Shale Gas Play
The following is an excellent slide-show type summary of development of the Marcellus Shale Gas Play. Click on the highlighted links to see more.
Peter
SRBC: Marcellus Shale Summary April 2, 2009 Susquehanna River Basin Commission
The Susquehanna River Basin Commission has an information document titled “Gas Well Drilling and Development - Marcellus Shale” on their website. It explains basic information about the Marcellus Shale and presents Commission regulations on consumptive water use and surface water withdrawal. More news about the Marcellus Shale.
Peter
SRBC: Marcellus Shale Summary April 2, 2009 Susquehanna River Basin Commission
The Susquehanna River Basin Commission has an information document titled “Gas Well Drilling and Development - Marcellus Shale” on their website. It explains basic information about the Marcellus Shale and presents Commission regulations on consumptive water use and surface water withdrawal. More news about the Marcellus Shale.
Tuesday, March 31, 2009
Renewable Energy: Some Realities
Can these marvelous sources of "renewable" energy, such as solar, wind, geothermal and hydropower really do much to replace the energy we currently get from oil, gas, and coal? To answer that question we need to look at the numbers, do the math, and try to comprehend the magnitude of the challenge. I think the following article explains the situation very well. Unfortunately too many people in government who are making our laws and spending Billions and Trillions of our dollars do not understand these fundamental realities.
Or worse, maybe they do understand and they are purposely ignoring the facts in order to pursue their own agenda of expanded power and control. Either way, all of us need to educate ourselves about these energy realities if we hope to stop the nonsense coming from our government.
Peter
MARCH 4, 2009, 11:18 P.M. ET
Let's Get Real About Renewable Energy
We can double the output of solar and wind, and double it again. We'll still depend on hydrocarbons.
By ROBERT BRYCE (source)
During his address to Congress last week, President Barack Obama declared, "We will double this nation's supply of renewable energy in the next three years."
While that statement -- along with his pledge to impose a "cap on carbon pollution" -- drew applause, let's slow down for a moment and get realistic about this country's energy future. Consider two factors that are too-often overlooked: George W. Bush's record on renewables, and the problem of scale.
By promising to double our supply of renewables, Mr. Obama is only trying to keep pace with his predecessor. Yes, that's right: From 2005 to 2007, the former Texas oil man oversaw a near-doubling of the electrical output from solar and wind power. And between 2007 and 2008, output from those sources grew by another 30%.
Mr. Bush's record aside, the key problem facing Mr. Obama, and anyone else advocating a rapid transition away from the hydrocarbons that have dominated the world's energy mix since the dawn of the Industrial Age, is the same issue that dogs every alternative energy idea: scale.
Let's start by deciphering exactly what Mr. Obama includes in his definition of "renewable" energy. If he's including hydropower, which now provides about 2.4% of America's total primary energy needs, then the president clearly has no concept of what he is promising. Hydro now provides more than 16 times as much energy as wind and solar power combined. Yet more dams are being dismantled than built. Since 1999, more than 200 dams in the U.S. have been removed.
If Mr. Obama is only counting wind power and solar power as renewables, then his promise is clearly doable. But the unfortunate truth is that even if he matches Mr. Bush's effort by doubling wind and solar output by 2012, the contribution of those two sources to America's overall energy needs will still be almost inconsequential.
Here's why. The latest data from the U.S. Energy Information Administration show that total solar and wind output for 2008 will likely be about 45,493,000 megawatt-hours. That sounds significant until you consider this number: 4,118,198,000 megawatt-hours. That's the total amount of electricity generated during the rolling 12-month period that ended last November. Solar and wind, in other words, produce about 1.1% of America's total electricity consumption.
Of course, you might respond that renewables need to start somewhere. True enough -- and to be clear, I'm not opposed to renewables. I have solar panels on the roof of my house here in Texas that generate 3,200 watts. And those panels (which were heavily subsidized by Austin Energy, the city-owned utility) provide about one-third of the electricity my family of five consumes. Better still, solar panel producers like First Solar Inc. are lowering the cost of solar cells. On the day of Mr. Obama's speech, the company announced that it is now producing solar cells for $0.98 per watt, thereby breaking the important $1-per-watt price barrier.
And yet, while price reductions are important, the wind is intermittent, and so are sunny days. That means they cannot provide the baseload power, i.e., the amount of electricity required to meet minimum demand, that Americans want.
That issue aside, the scale problem persists. For the sake of convenience, let's convert the energy produced by U.S. wind and solar installations into oil equivalents.
The conversion of electricity into oil terms is straightforward: one barrel of oil contains the energy equivalent of 1.64 megawatt-hours of electricity. Thus, 45,493,000 megawatt-hours divided by 1.64 megawatt-hours per barrel of oil equals 27.7 million barrels of oil equivalent from solar and wind for all of 2008.
Now divide that 27.7 million barrels by 365 days and you find that solar and wind sources are providing the equivalent of 76,000 barrels of oil per day. America's total primary energy use is about 47.4 million barrels of oil equivalent per day.
Of that 47.4 million barrels of oil equivalent, oil itself has the biggest share -- we consume about 19 million barrels per day. Natural gas is the second-biggest contributor, supplying the equivalent of 11.9 million barrels of oil, while coal provides the equivalent of 11.5 million barrels of oil per day. The balance comes from nuclear power (about 3.8 million barrels per day), and hydropower (about 1.1 million barrels), with smaller contributions coming from wind, solar, geothermal, wood waste, and other sources.
Here's another way to consider the 76,000 barrels of oil equivalent per day that come from solar and wind: It's approximately equal to the raw energy output of one average-sized coal mine.
During his address to Congress, Mr. Obama did not mention coal -- the fuel that provides nearly a quarter of total primary energy and about half of America's electricity -- except to say that the U.S. should develop "clean coal."
He didn't mention nuclear power, only "nuclear proliferation," even though nuclear power is likely the best long-term solution to policy makers' desire to cut U.S. carbon emissions. He didn't mention natural gas, even though it provides about 25% of America's total primary energy needs. Furthermore, the U.S. has huge quantities of gas, and it's the only fuel source that can provide the stand-by generation capacity needed for wind and solar installations. Finally, he didn't mention oil, the backbone fuel of the world transportation sector, except to say that the U.S. imports too much of it.
Perhaps the president's omissions are understandable. America has an intense love-hate relationship with hydrocarbons in general, and with coal and oil in particular. And with increasing political pressure to cut carbon-dioxide emissions, that love-hate relationship has only gotten more complicated.
But the problem of scale means that these hydrocarbons just won't go away. Sure, Mr. Obama can double the output from solar and wind. And then double it again. And again. And again. But getting from 76,000 barrels of oil equivalent per day to something close to the 47.4 million barrels of oil equivalent per day needed to keep the U.S. economy running is going to take a long, long time. It would be refreshing if the president or perhaps a few of the Democrats on Capitol Hill would admit that fact.
Mr. Bryce is the managing editor of Energy Tribune. His latest book is "Gusher of Lies: The Dangerous Delusions of 'Energy Independence'"(Public Affairs, 2008).
Or worse, maybe they do understand and they are purposely ignoring the facts in order to pursue their own agenda of expanded power and control. Either way, all of us need to educate ourselves about these energy realities if we hope to stop the nonsense coming from our government.
Peter
MARCH 4, 2009, 11:18 P.M. ET
Let's Get Real About Renewable Energy
We can double the output of solar and wind, and double it again. We'll still depend on hydrocarbons.
By ROBERT BRYCE (source)
During his address to Congress last week, President Barack Obama declared, "We will double this nation's supply of renewable energy in the next three years."
While that statement -- along with his pledge to impose a "cap on carbon pollution" -- drew applause, let's slow down for a moment and get realistic about this country's energy future. Consider two factors that are too-often overlooked: George W. Bush's record on renewables, and the problem of scale.
By promising to double our supply of renewables, Mr. Obama is only trying to keep pace with his predecessor. Yes, that's right: From 2005 to 2007, the former Texas oil man oversaw a near-doubling of the electrical output from solar and wind power. And between 2007 and 2008, output from those sources grew by another 30%.
Mr. Bush's record aside, the key problem facing Mr. Obama, and anyone else advocating a rapid transition away from the hydrocarbons that have dominated the world's energy mix since the dawn of the Industrial Age, is the same issue that dogs every alternative energy idea: scale.
Let's start by deciphering exactly what Mr. Obama includes in his definition of "renewable" energy. If he's including hydropower, which now provides about 2.4% of America's total primary energy needs, then the president clearly has no concept of what he is promising. Hydro now provides more than 16 times as much energy as wind and solar power combined. Yet more dams are being dismantled than built. Since 1999, more than 200 dams in the U.S. have been removed.
If Mr. Obama is only counting wind power and solar power as renewables, then his promise is clearly doable. But the unfortunate truth is that even if he matches Mr. Bush's effort by doubling wind and solar output by 2012, the contribution of those two sources to America's overall energy needs will still be almost inconsequential.
Here's why. The latest data from the U.S. Energy Information Administration show that total solar and wind output for 2008 will likely be about 45,493,000 megawatt-hours. That sounds significant until you consider this number: 4,118,198,000 megawatt-hours. That's the total amount of electricity generated during the rolling 12-month period that ended last November. Solar and wind, in other words, produce about 1.1% of America's total electricity consumption.
Of course, you might respond that renewables need to start somewhere. True enough -- and to be clear, I'm not opposed to renewables. I have solar panels on the roof of my house here in Texas that generate 3,200 watts. And those panels (which were heavily subsidized by Austin Energy, the city-owned utility) provide about one-third of the electricity my family of five consumes. Better still, solar panel producers like First Solar Inc. are lowering the cost of solar cells. On the day of Mr. Obama's speech, the company announced that it is now producing solar cells for $0.98 per watt, thereby breaking the important $1-per-watt price barrier.
And yet, while price reductions are important, the wind is intermittent, and so are sunny days. That means they cannot provide the baseload power, i.e., the amount of electricity required to meet minimum demand, that Americans want.
That issue aside, the scale problem persists. For the sake of convenience, let's convert the energy produced by U.S. wind and solar installations into oil equivalents.
The conversion of electricity into oil terms is straightforward: one barrel of oil contains the energy equivalent of 1.64 megawatt-hours of electricity. Thus, 45,493,000 megawatt-hours divided by 1.64 megawatt-hours per barrel of oil equals 27.7 million barrels of oil equivalent from solar and wind for all of 2008.
Now divide that 27.7 million barrels by 365 days and you find that solar and wind sources are providing the equivalent of 76,000 barrels of oil per day. America's total primary energy use is about 47.4 million barrels of oil equivalent per day.
Of that 47.4 million barrels of oil equivalent, oil itself has the biggest share -- we consume about 19 million barrels per day. Natural gas is the second-biggest contributor, supplying the equivalent of 11.9 million barrels of oil, while coal provides the equivalent of 11.5 million barrels of oil per day. The balance comes from nuclear power (about 3.8 million barrels per day), and hydropower (about 1.1 million barrels), with smaller contributions coming from wind, solar, geothermal, wood waste, and other sources.
Here's another way to consider the 76,000 barrels of oil equivalent per day that come from solar and wind: It's approximately equal to the raw energy output of one average-sized coal mine.
During his address to Congress, Mr. Obama did not mention coal -- the fuel that provides nearly a quarter of total primary energy and about half of America's electricity -- except to say that the U.S. should develop "clean coal."
He didn't mention nuclear power, only "nuclear proliferation," even though nuclear power is likely the best long-term solution to policy makers' desire to cut U.S. carbon emissions. He didn't mention natural gas, even though it provides about 25% of America's total primary energy needs. Furthermore, the U.S. has huge quantities of gas, and it's the only fuel source that can provide the stand-by generation capacity needed for wind and solar installations. Finally, he didn't mention oil, the backbone fuel of the world transportation sector, except to say that the U.S. imports too much of it.
Perhaps the president's omissions are understandable. America has an intense love-hate relationship with hydrocarbons in general, and with coal and oil in particular. And with increasing political pressure to cut carbon-dioxide emissions, that love-hate relationship has only gotten more complicated.
But the problem of scale means that these hydrocarbons just won't go away. Sure, Mr. Obama can double the output from solar and wind. And then double it again. And again. And again. But getting from 76,000 barrels of oil equivalent per day to something close to the 47.4 million barrels of oil equivalent per day needed to keep the U.S. economy running is going to take a long, long time. It would be refreshing if the president or perhaps a few of the Democrats on Capitol Hill would admit that fact.
Mr. Bryce is the managing editor of Energy Tribune. His latest book is "Gusher of Lies: The Dangerous Delusions of 'Energy Independence'"(Public Affairs, 2008).
Saturday, March 28, 2009
Barrow, Alaska Depends On Its Own Natural Gas
The following is a fascinating story about natural gas (methane) produced and used by the community of Barrow, Alaska. The creator of this article, National Public Radio (NPR) has a related slide show and description of a scientist studying the natural production and escape of methane from beneath lakes in Alaska and Siberia.
It makes one wonder how much methane gas is generated naturally and escapes into the atmosphere on a global basis. My guess is it is huge.
Peter
Natural Resources Key to Alaska Town's Future
by Melissa Block
Melissa Block, NPR (source)
Richard Glenn, who is half Inupiat Eskimo, is a scientist and a whaling co-captain. He works on developing natural resources to benefit the Inupiat people in Barrow, Alaska.
Previous Story from Barrow
Sep. 10, 2007Scientist Measures an Overlooked Greenhouse Gas
Photo Gallery: Measuring Methane in Alaska and Siberia
Sep. 6, 2007Exploring for Oil in the Arctic's 'Great Frontier'
All Things Considered, September 11, 2007 ·
Barrow, Alaska, is the northernmost community in the United States. Located on the Arctic Ocean, it is home to about 4,500 people.
The surrounding area is also home to huge natural gas deposits. While nearly all other Alaskan villages have to import diesel fuel, Barrow runs on locally produced natural gas. And the future of the community will depend largely on development of this and other natural resources.
Richard Glenn lives in Barrow and is a geologist by training. He helped develop a gas field in the tundra that brings gas into Barrow via a 12-mile pipeline.
"It's a very reassuring feeling to turn on the stove, see that blue flame and know you had a part in bringing a stable energy source to your community," Glenn says.
Glenn works with the Arctic Slope Regional Corporation, which represents the business interests of Barrow's Inupiat Eskimos.
The Inupiat are shareholders. They own the land, and they are paid dividends from the vast mineral resources in this part of the state.
The oil fields keep Barrow running, says Glenn, who is half Inupiat.
"We have no significant tourism, no agriculture, no commercial fishing, no other local industry. Our future is tied with resource development," Glenn says.
The residents of Barrow are also feeling the effects of an eroding coastline, but Glenn isn't sure whether climate change has accelerated that process. He says the people of Barrow are just "rolling with the punches": reinforcing seawalls, relocating old communities, and moving new communities away from the coast.
But scientists who study whales are seeing migration patterns shifting as the result of climate change, as the ocean warms and food supplies change.
Jackie Grebmeier, a biological oceanographer, has studied animal populations in these Arctic waters for 25 years.
She says she's seeing more gray whales around Barrow in the summer — as the Arctic ice pulls back. But that influx is not sustainable.
"The animals are moving to where their food is … [but] there's only so much open space. The water [here] … is narrow relative to the rich shelf that they normally feed in. So these gray whales eventually will be limited by the space and the prey that they can find," Grebmeier says.
NPR's Art Silverman produced this story.
It makes one wonder how much methane gas is generated naturally and escapes into the atmosphere on a global basis. My guess is it is huge.
Peter
Natural Resources Key to Alaska Town's Future
by Melissa Block
Melissa Block, NPR (source)
Richard Glenn, who is half Inupiat Eskimo, is a scientist and a whaling co-captain. He works on developing natural resources to benefit the Inupiat people in Barrow, Alaska.
Previous Story from Barrow
Sep. 10, 2007Scientist Measures an Overlooked Greenhouse Gas
Photo Gallery: Measuring Methane in Alaska and Siberia
Sep. 6, 2007Exploring for Oil in the Arctic's 'Great Frontier'
All Things Considered, September 11, 2007 ·
Barrow, Alaska, is the northernmost community in the United States. Located on the Arctic Ocean, it is home to about 4,500 people.
The surrounding area is also home to huge natural gas deposits. While nearly all other Alaskan villages have to import diesel fuel, Barrow runs on locally produced natural gas. And the future of the community will depend largely on development of this and other natural resources.
Richard Glenn lives in Barrow and is a geologist by training. He helped develop a gas field in the tundra that brings gas into Barrow via a 12-mile pipeline.
"It's a very reassuring feeling to turn on the stove, see that blue flame and know you had a part in bringing a stable energy source to your community," Glenn says.
Glenn works with the Arctic Slope Regional Corporation, which represents the business interests of Barrow's Inupiat Eskimos.
The Inupiat are shareholders. They own the land, and they are paid dividends from the vast mineral resources in this part of the state.
The oil fields keep Barrow running, says Glenn, who is half Inupiat.
"We have no significant tourism, no agriculture, no commercial fishing, no other local industry. Our future is tied with resource development," Glenn says.
The residents of Barrow are also feeling the effects of an eroding coastline, but Glenn isn't sure whether climate change has accelerated that process. He says the people of Barrow are just "rolling with the punches": reinforcing seawalls, relocating old communities, and moving new communities away from the coast.
But scientists who study whales are seeing migration patterns shifting as the result of climate change, as the ocean warms and food supplies change.
Jackie Grebmeier, a biological oceanographer, has studied animal populations in these Arctic waters for 25 years.
She says she's seeing more gray whales around Barrow in the summer — as the Arctic ice pulls back. But that influx is not sustainable.
"The animals are moving to where their food is … [but] there's only so much open space. The water [here] … is narrow relative to the rich shelf that they normally feed in. So these gray whales eventually will be limited by the space and the prey that they can find," Grebmeier says.
NPR's Art Silverman produced this story.
Chevron And Australia Investing In Gas
It seems the powers-that-be in Australia recognize the importance and value of offshore drilling and energy independence. Compare the following kind of investment and activity in Australia to the current attitude of the United States' Government.
I wonder how many wind turbines or square miles of solar panels it would take to equal the energy equivalent to Chevron's claimed 40 Trillion cubic feet of natural gas "resources" in Australia. These are American dollars (lots of them) being invested in Australia and not America. How intelligent is that? Ask your Congress-person. The following article is interesting.
Peter
Chevron begins massive Australian offshore project
Bloomberg News
March 25, 2009, 5:59AM (source)
Chevron Corp started its biggest-ever exploration campaign off Australia’s northwest coast, targeting finds that will underpin planned liquefied natural gas-export projects.
The drilling, costing “hundreds of millions of dollars,” will include as many as 10 exploration and appraisal wells this year, Roy Krzywosinski, managing director of Chevron’s Australian unit, said today in an interview. It aims to find more gas to supply the planned Gorgon and Wheatstone LNG projects, he said.
Australia’s northwest ranks among Chevron’s four highest- priority exploration regions worldwide, alongside the Gulf of Mexico, West Africa and the Gulf of Thailand. The Gorgon venture may cost A$50 billion ($35 billion), Western Australian Premier Colin Barnett said this month, making it the nation’s biggest resources project.
“Long-term resource security is vital to underpin these massive investments such as Gorgon and Wheatstone,” Krzywosinski said by telephone from Perth. The projects are “the top priorities” for San Ramon, California-based Chevron to drive the company’s growth in gas, he said.
Chevron said Jan. 29 it is maintaining worldwide capital spending at about $22.8 billion this year, bucking a budget- cutting trend among petroleum producers, as it seeks to halt two years of drops in output. About $2 billion will go on exploration, mostly in the four priority areas, Krzywosinski said.
Chevron Chief Executive Officer David O’Reilly said March 10 that the company and its partners in Gorgon, Exxon and Royal Dutch Shell Plc, expect to give the go-ahead in the second half to build the delayed project. It will have an initial production capacity of 15 million metric tons a year, about 76 percent of Australia’s existing LNG capacity.
The 100 percent-owned Wheatstone LNG project is running about 18 months behind Gorgon in the development line-up, and Chevron expects to start initial engineering and design work on that venture in the second half of this year. The work may last until late 2010 or early 2011, Krzywosinski said.
“We’re making a lot of progress on both of these projects,” he said. “I hope to have some good news in the second half of 2009 both on the front of Gorgon as well as Wheatstone.”
The first well in the Australian program, in the Exmouth Plateau area, is under way using the Atwood Eagle rig, he said. A second rig, the Ensco 7500, arrived in Australia this week from the Gulf of Mexico and is due to start drilling at the Exxon-operated Jansz field in early April as part of the Gorgon venture.
Any success in the drilling would add to the discoveries made at Wheatstone in 2004, Chandon and Clio in 2006 and additional gas found at the Iago field in July. Six appraisal wells drilled last year in the Wheatstone-Iago area last year doubled the resources there, Krzywosinski said.
Chevron will pay $550,000 a day for the “ultra-deepwater” Ensco 7500 rig while it is being used in Australia, up from the $365,000 daily rate payable while the rig is in transit from the U.S., Dallas-based Ensco International Inc. said in August.
LNG is natural gas chilled to liquid form, reducing it to one-six-hundredth of its original volume, for transportation by tanker to destinations not connected by pipeline. Chevron has gas resources in Australia of about 40 trillion cubic feet, Wood Mackenzie Consultants Ltd. estimated in February last year, making it the largest holder in the country.
www.bloomberg.com
I wonder how many wind turbines or square miles of solar panels it would take to equal the energy equivalent to Chevron's claimed 40 Trillion cubic feet of natural gas "resources" in Australia. These are American dollars (lots of them) being invested in Australia and not America. How intelligent is that? Ask your Congress-person. The following article is interesting.
Peter
Chevron begins massive Australian offshore project
Bloomberg News
March 25, 2009, 5:59AM (source)
Chevron Corp started its biggest-ever exploration campaign off Australia’s northwest coast, targeting finds that will underpin planned liquefied natural gas-export projects.
The drilling, costing “hundreds of millions of dollars,” will include as many as 10 exploration and appraisal wells this year, Roy Krzywosinski, managing director of Chevron’s Australian unit, said today in an interview. It aims to find more gas to supply the planned Gorgon and Wheatstone LNG projects, he said.
Australia’s northwest ranks among Chevron’s four highest- priority exploration regions worldwide, alongside the Gulf of Mexico, West Africa and the Gulf of Thailand. The Gorgon venture may cost A$50 billion ($35 billion), Western Australian Premier Colin Barnett said this month, making it the nation’s biggest resources project.
“Long-term resource security is vital to underpin these massive investments such as Gorgon and Wheatstone,” Krzywosinski said by telephone from Perth. The projects are “the top priorities” for San Ramon, California-based Chevron to drive the company’s growth in gas, he said.
Chevron said Jan. 29 it is maintaining worldwide capital spending at about $22.8 billion this year, bucking a budget- cutting trend among petroleum producers, as it seeks to halt two years of drops in output. About $2 billion will go on exploration, mostly in the four priority areas, Krzywosinski said.
Chevron Chief Executive Officer David O’Reilly said March 10 that the company and its partners in Gorgon, Exxon and Royal Dutch Shell Plc, expect to give the go-ahead in the second half to build the delayed project. It will have an initial production capacity of 15 million metric tons a year, about 76 percent of Australia’s existing LNG capacity.
The 100 percent-owned Wheatstone LNG project is running about 18 months behind Gorgon in the development line-up, and Chevron expects to start initial engineering and design work on that venture in the second half of this year. The work may last until late 2010 or early 2011, Krzywosinski said.
“We’re making a lot of progress on both of these projects,” he said. “I hope to have some good news in the second half of 2009 both on the front of Gorgon as well as Wheatstone.”
The first well in the Australian program, in the Exmouth Plateau area, is under way using the Atwood Eagle rig, he said. A second rig, the Ensco 7500, arrived in Australia this week from the Gulf of Mexico and is due to start drilling at the Exxon-operated Jansz field in early April as part of the Gorgon venture.
Any success in the drilling would add to the discoveries made at Wheatstone in 2004, Chandon and Clio in 2006 and additional gas found at the Iago field in July. Six appraisal wells drilled last year in the Wheatstone-Iago area last year doubled the resources there, Krzywosinski said.
Chevron will pay $550,000 a day for the “ultra-deepwater” Ensco 7500 rig while it is being used in Australia, up from the $365,000 daily rate payable while the rig is in transit from the U.S., Dallas-based Ensco International Inc. said in August.
LNG is natural gas chilled to liquid form, reducing it to one-six-hundredth of its original volume, for transportation by tanker to destinations not connected by pipeline. Chevron has gas resources in Australia of about 40 trillion cubic feet, Wood Mackenzie Consultants Ltd. estimated in February last year, making it the largest holder in the country.
www.bloomberg.com
Friday, March 27, 2009
The Marcellus Shale Gas Play: All Things Considered
The following link leads to a long, but excellent article about many aspects of gas exploration, production and development in the Marcellus Shale of the eastern United States. The challenge to develop this vast gas resource extends far beyond geology and engineering. This article is comprehensive and well worth reading and saving. Here is the link: http://www.lhup.edu/rmyers3/Hemlock/Hemlock2.6.htm
Peter
This issue of Lock Haven University’s The Hemlock has a lengthy article about the Marcellus Shale, introducing a bit of geology, tracing a bit of history and presenting a large number of environmental concerns.
In This Issue...
"Prospects and Challenges of the Marcellus Shale" by Loretta Dickson and Md. Khalequzzaman
"40 Years of Natural Gas Production & Storage on State Forest Land" by Butch Davey
"The Marcellus Shale in Central PA: A Chronology" by Bob Myers
"A Landowner's Perspective: Leasing for Natural Gas Production" by Ralph Harnishfeger
"Another Landowner's Perspective: Gas Well Exploration & Development" by Jamie Walker
"And Justice for All" by Mary Vuccola
"Tapping Our Super-Giant Gas Field" by John Way and Rebecca Dunlap
"Hike of the Month: Natural Gas Production in the Sproul State Forest" by Bob Myers
"What Can You Do?"
"More Information on the Marcellus Shale"
Peter
This issue of Lock Haven University’s The Hemlock has a lengthy article about the Marcellus Shale, introducing a bit of geology, tracing a bit of history and presenting a large number of environmental concerns.
In This Issue...
"Prospects and Challenges of the Marcellus Shale" by Loretta Dickson and Md. Khalequzzaman
"40 Years of Natural Gas Production & Storage on State Forest Land" by Butch Davey
"The Marcellus Shale in Central PA: A Chronology" by Bob Myers
"A Landowner's Perspective: Leasing for Natural Gas Production" by Ralph Harnishfeger
"Another Landowner's Perspective: Gas Well Exploration & Development" by Jamie Walker
"And Justice for All" by Mary Vuccola
"Tapping Our Super-Giant Gas Field" by John Way and Rebecca Dunlap
"Hike of the Month: Natural Gas Production in the Sproul State Forest" by Bob Myers
"What Can You Do?"
"More Information on the Marcellus Shale"
We Have All This Gas, Let's Use It!
Change I can believe in. In these difficult economic times it makes complete sense to use America's abundant supplies of gas and convert our vehicles to run on compressed natural gas. The gas is found nearly everywhere, we have pipelines, the conversion process is relatively simple and inexpensive, the gas is the cleanest-burning fuel available, the process would create untold thousands of jobs, and generate significant revenue for local, state and Federal treasuries. Why aren't we doing this?
See what they're doing in Shreveport, Louisiana.
Peter
March 25, 2009
Lawmakers pushing LNG use in vehicles
Legislation to offer tax credits for drivers who convert vehicles.
By Mike Hasten mhasten@gannett.com (source)
BATON ROUGE — Sen. Nick Gautreaux, D-Meaux, and Rep. Jane Smith, R-Bossier City, sometimes don't agree on politics but they do agree on promoting the use of something that's plentiful in their regions — natural gas.
The two lawmakers from opposite ends of the state are pushing legislation that they say will stimulate the economy while improving the environment by utilizing compressed natural gas to power automobiles.
The bills, expected to be pre-filed later this week for the legislative session that begins April 27, offer tax credits for drivers who convert their existing gasoline-powered vehicles to run on CNG or purchase new vehicles already equipped. Also, credits are offered to filling stations that install the necessary equipment to fuel the vehicles.
"We have the opportunity in the state of Louisiana to be a national leader in this," Smith said. "We have something that's abundant, it's clean and it's American."
Smith said the Haynesville Shale in northwest Louisiana contains enough natural gas to power vehicles for decades.
"I've been told that if a cubic foot of natural gas is the size of a basketball, in the Haynesville Shale there are 250 trillion basketballs," she said. "We're sitting here on the supply, but we lack the demand."
Smith and Gautreaux said their legislation making it more affordable to convert vehicles and install fueling stations can help create the demand.
"This would provide jobs and wean us off foreign oil so we can depend on ourselves, instead of depending on somebody else," said Gautreaux, whose district includes the Henry Hub, the nation's national gas pricing station. Also, since natural gas is clean-burning fuel, "a lot of environmental problems, especially in cities, go away."
The city of Baton Rouge, which has been cited by the Environmental Protection Agency for air quality violations, has initiated a plan to convert its fleet of vehicles to burn CNG.
The lawmakers' legislation would increase the current tax credit for purchasing "qualified clean burning motor vehicle fuel property," which includes the additional costs of purchasing an already-equipped LNG-burning vehicle, the equipment to convert a vehicle and the costs of developing property directly related to the delivery of an alternative fuel.
Smith said vehicle owners could receive a state credit of 50 percent of the cost of converting a vehicle. If it costs $5,000 to convert, $2,500 could be claimed as a tax credit, which directly lowers the amount of tax owed to the state.
Gautreaux said new vehicles built to burn natural gas are more expensive, so a credit of 10 percent or $3,000, whichever is less, could be claimed toward the difference in sales price. Current law allows a $1,500 credit.
Combined with federal government tax credits, "this could make the extra cost of buying a natural gas vehicle zero," he said.
Smith and Gautreaux say that once a vehicle is converted, drivers notice improved performance and a lower-priced fill-up.
Gautreaux said that instead of the 86 octane of regular gasoline, the octane rating of CNG is 130.
Smith said that when gasoline was selling at $4 a gallon, CNG was $1.50. It's currently selling at about $1, which Gautreaux said shows that the price is not nearly as volatile as gasoline.
And, "it's safer than gasoline," he said
.
Another part of the legislation grants a 50 percent tax credit on the cost of developing fuel stations, which Gautreaux and Smith said would make CNG more widely available. Some filling stations already have it available.
The legislation is supported by the Louisiana Oil and Gas Association and the Louisiana Mid-Continent Oil and Gas Association.
Smith and Gautreaux say they have several lawmakers who want to be co-authors when the bill is filed.
Additional Facts
Comparison
According to state Rep. Jane Smith, R-Bossier City, when regular gasoline was selling for $4 a gallon, compressed natural gas only cost $1.50.
See what they're doing in Shreveport, Louisiana.
Peter
March 25, 2009
Lawmakers pushing LNG use in vehicles
Legislation to offer tax credits for drivers who convert vehicles.
By Mike Hasten mhasten@gannett.com (source)
BATON ROUGE — Sen. Nick Gautreaux, D-Meaux, and Rep. Jane Smith, R-Bossier City, sometimes don't agree on politics but they do agree on promoting the use of something that's plentiful in their regions — natural gas.
The two lawmakers from opposite ends of the state are pushing legislation that they say will stimulate the economy while improving the environment by utilizing compressed natural gas to power automobiles.
The bills, expected to be pre-filed later this week for the legislative session that begins April 27, offer tax credits for drivers who convert their existing gasoline-powered vehicles to run on CNG or purchase new vehicles already equipped. Also, credits are offered to filling stations that install the necessary equipment to fuel the vehicles.
"We have the opportunity in the state of Louisiana to be a national leader in this," Smith said. "We have something that's abundant, it's clean and it's American."
Smith said the Haynesville Shale in northwest Louisiana contains enough natural gas to power vehicles for decades.
"I've been told that if a cubic foot of natural gas is the size of a basketball, in the Haynesville Shale there are 250 trillion basketballs," she said. "We're sitting here on the supply, but we lack the demand."
Smith and Gautreaux said their legislation making it more affordable to convert vehicles and install fueling stations can help create the demand.
"This would provide jobs and wean us off foreign oil so we can depend on ourselves, instead of depending on somebody else," said Gautreaux, whose district includes the Henry Hub, the nation's national gas pricing station. Also, since natural gas is clean-burning fuel, "a lot of environmental problems, especially in cities, go away."
The city of Baton Rouge, which has been cited by the Environmental Protection Agency for air quality violations, has initiated a plan to convert its fleet of vehicles to burn CNG.
The lawmakers' legislation would increase the current tax credit for purchasing "qualified clean burning motor vehicle fuel property," which includes the additional costs of purchasing an already-equipped LNG-burning vehicle, the equipment to convert a vehicle and the costs of developing property directly related to the delivery of an alternative fuel.
Smith said vehicle owners could receive a state credit of 50 percent of the cost of converting a vehicle. If it costs $5,000 to convert, $2,500 could be claimed as a tax credit, which directly lowers the amount of tax owed to the state.
Gautreaux said new vehicles built to burn natural gas are more expensive, so a credit of 10 percent or $3,000, whichever is less, could be claimed toward the difference in sales price. Current law allows a $1,500 credit.
Combined with federal government tax credits, "this could make the extra cost of buying a natural gas vehicle zero," he said.
Smith and Gautreaux say that once a vehicle is converted, drivers notice improved performance and a lower-priced fill-up.
Gautreaux said that instead of the 86 octane of regular gasoline, the octane rating of CNG is 130.
Smith said that when gasoline was selling at $4 a gallon, CNG was $1.50. It's currently selling at about $1, which Gautreaux said shows that the price is not nearly as volatile as gasoline.
And, "it's safer than gasoline," he said
.
Another part of the legislation grants a 50 percent tax credit on the cost of developing fuel stations, which Gautreaux and Smith said would make CNG more widely available. Some filling stations already have it available.
The legislation is supported by the Louisiana Oil and Gas Association and the Louisiana Mid-Continent Oil and Gas Association.
Smith and Gautreaux say they have several lawmakers who want to be co-authors when the bill is filed.
Additional Facts
Comparison
According to state Rep. Jane Smith, R-Bossier City, when regular gasoline was selling for $4 a gallon, compressed natural gas only cost $1.50.
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