Saturday, 1 September 2012

Latest shale gas developments around the world

An update on the latest shale gas developments around the world:

UK: Cuadrilla have applied to drill their first lateral well on the Fylde peninsular. Lateral wells go down into the ground but bend to go horizontally along the rock strata. This is the first drilling to go ahead after the 2011 tremors. It's good to see things getting moving again after a long pause. I'm assuming that this well will aim to test the productivity of the Bowland shale - whether they can get decent and sustainable gas flow rates.

China: Shell plan to invest $1 billion a year in Chinese shale gas. This is really significant news! Although not well explored, China is likely to have significant volumes of shale gas resource. China is currently the world's largest CO2 emitter, mainly from the thousands of coal power plants built to power and growing and increasingly wealthy population. If shale gas can take off, replacing coal in electricity generation, and we see a similar rate of progress to that seen in the US, then these emissions could be substantially reduced over quite a short period (as well as significant improvements in air quality which, as anyone who's been to Beijing in the last 10 years can tell you, is a serious problem there). China is an ideal place to exploit shale gas - wide open continental interiors, sparse population, and a government accustomed to developing infrastructure on a large scale.

Argentina: It looks like Argentina may have made some significant shale gas and shale oil finds. Shale oil is important, because it is much more valuable than gas, so it entails a greater profit if shale oil as well as gas is found. Worrying if you live on the Falklands though, the thought of Argentina getting wealthy on the back of shale oil....

US: Gas drilling is set to resume in Dimock. Dimock has been the headline case for the US anti-fracking movement, the ground zero of fracking-induced pollution. In 2009 a poorly cased well allowed methane migration into a fresh-water aquifer (note that methane was the only thing that migrated, no fracking fluids were ever found to be migrating. Drilling was then suspended and Cabot (the operating company) have been subject of a number of lawsuits. Now things have been settled, the well has been recased, and methane levels in the aquifer are back to normal levels, and drilling is about to restart. The eyes of those both pro and anti fracking will be on Dimock again, to see if the drilling company can get it right this time.

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