In a Natural Gas Glut, Big Winners and Losers
“Low prices for consumers. Big profits for bankers. But the gas glut in the United States has meant much pain for gas exploration companies and their investors.” (Source: NY Times)
Brilliant article on America’s natural gas glut and the influence of financial capitalism on its boom and future bust. Must-read article for European policy-makers who dream of a Golden Age of Gas for Europe.
“Like the recent credit bubble, the boom and bust in gas were driven in large part by tens of billions of dollars in creative financing engineered by investment banks like Goldman Sachs, Barclays and Jefferies & Company.
After the financial crisis, the natural gas rush was one of the few major profit centers for Wall Street deal makers, who found willing takers among energy companies and foreign financial investors.“
EU Commission study on shale gas raises serious doubts about European "golden age of gas"
A new research report written by the Joint Research Centre of the EU Commission suggests that under a best case scenario, taking into account environmental considerations, future shale gas production in Europe could help the EU maintain its dependency on energy imports at around 50 % of its total energy needs. But the report also reveals the sometimes considerable uncertainty about recoverable volumes, technological developments, public acceptance and access to land and markets.
This courageous JRC study will without doubt lead to furious reactions from the shale gas lobby.
Read the full report ‘Unconvential Gas: Potential Energy Market Impacts in the European Union”
See also Reuters: Shale Gas will not cut EU import dependence .
The ‘Shale Gas Revolution’: Developments and Changes
“The ‘shale gas revolution’ in the United States created an oversupply of liquefied natural gas and downward pressure on gas prices across the globe. Disappointing outcomes have reduced the hype about the prospects for shale gas in Europe”.
Excellent new report from Paul Stevens of Chatham House. One of the most important conclusions: shale gas does not substitute for coal but is a big danger to renewables.
Main conclusions of this must-read report:
- The ‘shale gas revolution’ in the United States created an oversupply of liquefied natural gas and downward pressure on gas prices across the globe.
- Disappointing outcomes have reduced the hype about the prospects for shale gas in Europe, and led to the realization that, at least in western Europe, there are serious obstacles to its development.
- There has been considerable debate over the level of technically recoverable shale gas resources together with significant revisions to some estimates of those resources.
- Growing opposition to shale gas is driven by concerns over the environmental impact of hydraulic fracturing and the impact on greenhouse gas emissions.
- In the United States, energy self-sufficiency has increased in importance, making the continuation of the ‘shale gas revolution’ there more likely.
- There is a growing fear that shale gas may substitute not for coal as many originally hoped, but for renewables.
- Overall, levels of investor uncertainty remain as high as ever, particularly with regard to developments outside the United States.
Shale gas strategy ‘not the optimum path’: Fatih Birol
“An energy strategy without fossil fuels would be preferable to the regulated gas pathway outlined in the International Energy Agency (IEA)’s new report, the paper’s own author told EurActiv in an exclusive interview yesterday (30 May).”
Excellent interview on EurActiv showing the tightrope Fatih Birol has to walk when communicating the IEA’s views on the golden age of gas. When you read the report well, you understand the IEA clearly sees shale gas as the wrong path leading to unacceptable climate impacts.
How green is shale gas?
“The rise of ‘fracking’ means the IEA is hailing a ‘golden age for gas’. But what impact does shale gas have on the environment? Leo Hickman, with your help, investigates.”
Good overview in the Guardian of immediate reactions to today’s IEA report on "golden rules" for the golden age of gas.
Launch of IEA report: Golden Rules for a Golden Age of Gas
The International Energy Agency will next week (29 May) launch an important report on the "golden rules" for governments and industry if they are to overcome serious risks and concerns (social and environmental) about the Golden Age of Gas.
There will be a special presentation of this report by Fatih Birol, IEA’s chief economist, in the European Parliament in Brussels on Wednesday, May 30, at 09h30.
Registration for this event in the European Parliament is possible via boguslaw.sonik@europarl.europa.eu before 29th of May. Mr Sonik, a Polish Member of the European Parliament recently wrote a heavily criticised report in favour of large-scale shale gas extraction in Europe.
On the same day (30 May), I will have the pleasure to moderate a debate on the same subject of shale gas in Europe during the annual conference of ASPO, the Association for the Study of Peak Oil and Gas in Vienna. One of the world’s most renowned critics and expert on shale gas in the USA, Arthur Berman, will be the top speaker in this debate.
Read one of Arthur Berman’s latest papers on this issue: After The Gold Rush: A Perspective on Future U.S. Natural Gas Supply and Price (Febr. 2012)
The Oil Drum | After The Gold Rush: A Perspective on Future U.S. Natural Gas Supply and Price
"U.S. shale plays share many characteristics with the gold rushes of the nineteenth and early twentieth centuries. Both phenomena result from extreme promotion. Anyone can join. Every participant believes that they will get rich. Great amounts of capital are destroyed as entrants try to get a position. The bonanza is exhausted sooner than most expected and few profit in the end except for the vendors that serve participants." (Source: The Oildrum)
Another great contribution by Arthur Berman on the shale gas "gold rush" in the US.
That falling feeling: Shale gas estimates continue downward
Energy expert Kurt Cobb looks at falling estimates of shale gas production in the US. After the deflated hypes of biofuels and carbon capture and storage, is shale gas the next mirage in the energy desert?
"As new wells in the world’s shale gas fields continue to disappoint, prepare for even more outrageous claims about future natural gas supplies–measured perhaps not in centuries, but millennia–and designed to obscure the failure of shale gas exploration results to match the industry’s persistently optimistic forecasts." (Source: Energy Bulletin)
No need for further regulation on shale gas: EU study
“There is no need for more environmental legislation in the case of shale gas exploration, at least until it reaches commercial scale, says a new study published by the European Commission.” (Source: EurActiv)
Contrary to developments in the US, where more calls for stricter regulation of shale gas exploration and production are emerging as public opposition grows, this study by a Belgian law company for the EU Commission thinks existing laws at EU level are already sufficient. This new report contradicts a study undertaken last year for the European Parliament which concluded there is a need for a specific Shale Gas Directive.
Next to regulatory concerns about shale gas in Europe, there are also huge controversies over its impact on climate change, doubts about the estimated reserves of shale gas and serious questions around its economics and profitability.
The Cornell Team Redux: Shale Gas a Disaster for Climate
The Cornell research team which published a critical study about shale gas in 2011 has improved its methodology and has come to the same conclusion: shale gas "is inadequate as a bridge fuel and may be worse for climate change in the long run than coal".
(Source: DeSmogBlog)
”Can shale-gas methane emissions be reduced? Clearly yes, and proposed EPA regulations to require capture of gas at the time of well completions are an important step. Regulations are necessary to accomplish emission reductions, as economic considerations alone have not driven such reductions. And it may be extremely expensive to reduce leakage associated with aging infrastructure, particularly distribution pipelines in cities but also longdistance transmission pipelines, which are on average more than 50 years old in the U.S. Should society invest massive capital in such improvements for a bridge fuel that is to be used for only 20 to 30 years, or would the capital be better spent on constructing a smart electric grid and other technologies that move towards a truly green energy future?”
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