Thirty years ago oilman George Mitchell started an American energy revolution when his company took old techniques and applied them in innovative ways to shale gas fields in north Texas.
Hydraulic fracturing and horizontal drilling were not exactly new, but the combination unlocked tremendous reserves of natural gas in the Barnett Shale and, eventually, similar formations across the U.S. Shale names like the Marcellus, Bakken, Haynesville, Utica and Woodford are now synonymous with game-changing gas reserves.
Some so-called experts feared that we might have to import liquefied natural gas from international producers only a decade ago, but now the American supply is estimated at 100 years or more.
Europe is finally taking notice. The continent has begun exploring its own shale formations in the hopes that some measure of energy independence might be gained.
The goal is not freedom from Middle East and Latin American state-run oil entities, but rather Russian suppliers. European economic and clean-air interests might be linking up about shale even as U.S. regulators are giving the practice a harder look here.
The evidence is cropping up almost everywhere. Halliburton fractured Poland‘s first shale play well last year, while ExxonMobil is exploring concessions in Germany, joining nations such as Spain and the Netherlands in a search for vast stores of natural gas.
U.S. diplomatic channels are willing to help. The State Department formed the Global Shale Gas Initiative last year, “to help countries seeking to utilize their unconventional natural gas resources to identify and develop them safely and economically,” according to the department’s website.
The Global Shale Gas Initiative so far selected countries with some known presence of gas-bearing shale within their borders, market potential and “geopolitical synergies.” The GSGI partnerships include China, India, Jordan and Poland, where reserves are announced at approximately 1.4 trillion cubic meters.
New coal power is difficult to build on due to stringent environmental politics. Some nations, such as Germany, are either running away from or increasingly wary about nuclear power in the wake of the Japanese tsunami disaster.
Eastern European nations, with still fresh memories of Russian domination, want an option to the oil and gas giant perched near their borders. Some, like France, are opposed to hydraulic fracturing although its energy situation is more settled than other neighbors.
But many nations are willing and eager to consider unconventional drilling options, although opinion is divided on whether the European shales have sufficient permeability to recover massive oil and gas. They look across the pond and see potential oceans of energy independence where little existed before the U.S. shale plays shot up.
- Soros-Backed San Leon Says Polish Shale Gas Profits to Beat U.S. (mb50.wordpress.com)
- UK: Cuadrilla Unveils Huge Shale Gas Find (mb50.wordpress.com)
By Marek Strzelecki
Sept. 20 (Bloomberg) — San Leon Energy Plc, the natural- gas explorer backed by billionaire George Soros and Blackrock Inc., expects its Polish shale licenses to be more profitable than U.S. deposits, the company’s exploration director said.
San Leon, which became one of the leading shale gas explorers in Poland after buying Realm Energy International Corp. for $142 million last month, seeks to profit either through so-called farm-outs with a cash component or asset sales once it develops its fields and proves they can produce gas, John Buggenhagen said in an interview in Warsaw.
Shale gas, unlocked from rocks by blasting them with sand, chemicals and water, has boosted U.S. production and delivered the lowest prices in almost a decade. Companies including Exxon Mobil Corp. and Chevron Corp. seek to emulate the U.S. boom in Poland, Europe’s biggest holder of shale.
“If you’re getting $4 for your gas in the U.S., here you’re getting $8, meaning I can produce half as much gas for the same profit,” Buggenhagen said.
Dublin-based San Leon has 14 licenses and 1.7 million acres of land in the eastern European country to explore for shale gas and conventional hydrocarbons, according to a presentation on its website. Poland has granted 101 licenses, with eight wells completed out of a mandatory 124. Test production has started on two wells.
“If you look at what’s going on in North America, I mean that people are paying $10, $20, $30 an acre, and selling it for $10,000, $20,000, $30,000 an acre, that’s the kind of return that we’re looking for.” Buggenhagen said. “We would like to use our existing capital to start exploring those Realm concessions on our own, as opposed to giving away acreage through farm-outs.”
Last year, the company signed a farm-out agreement with Talisman Energy Inc., under which the Canadian gas explorer will drill one well on each of San Leon’s concessions in the Baltic basin in northern Poland in exchange for 30 percent stakes in the licenses. Talisman has an option to increase its holdings to 60 percent if it drills an additional well on each license.
San Leon was approached by three “significant oil and gas companies” and may consider more farm-outs after upcoming drillings, Buggenhagen said.
“If I come and drill the well that costs me $4 million to $5 million and if I’ve increased the value of that block 10- fold, then the value of my farm-out is that much more” he said.
Poland may sit atop about 5.2 trillion cubic meters of shale gas, according to the U.S. Energy Information Administration. Commercial production can start in three to five years, helped by the relatively high price of Russian gas, Buggenhagen said.
The country buys some 60 percent of its gas under a long- term contract from Russia. In the second quarter the country was paying more than $400 a 1,000 cubic meters of Russian gas, according to Polish Deputy Prime Minister Waldemar Pawlak. That’s about three times today’s gas price for October delivery on the New York Mercantile Exchange.
While Poland’s almost complete reliance on coal as fuel for power generation may help boost shale production given the European Union’s push to lower carbon-dioxide emissions, the country should be cautious in increasing royalties for oil and gas producers, Buggenhagen said.
“What we’re struggling to know is how is the Polish government going to respond to success, in terms of changing royalties and income taxes,” he said. “You see that everywhere in the world — the greed factor — how much greed we will see over the next three to five years.”
Last month, Poland’s largest opposition Law and Justice party presented a draft law calling for output fees to be at least 40 percent of the value of the deposit. While the government argues mining fees should not be set before gas deposits are proven, in June Pawlak said the country saw Norway and its sovereign wealth fund as a model to benefit from shale gas production.
“Royalties are less than 1 percent now, so very low,” Buggenhagen said. “They will go up, for sure, But if you raise it to 40 percent you’re going to discourage the investment.”
- The coming gas glut: Shale gas gets going in Poland (ktwop.wordpress.com)
- Norwegian giant in it for the long haul with Texas shale venture (mb50.wordpress.com)
- Enipedia Blog (enipedia.tudelft.nl)
- To Create Jobs, Let Us Drill More (mb50.wordpress.com)
- Poland detains 7 suspected of shale gas corruption (reuters.com)
- 7 charged with corruption over shale gas in Poland (sfgate.com)
- 7 charged with corruption over shale gas in Poland (seattletimes.nwsource.com)
- 7 charged with corruption over shale gas in Poland (foxnews.com)
- Seven People Have Been Charged With Corruption Over Shale Gas Exploration In Poland (businessinsider.com)
- Halliburton: Moving Quickly on the Global Shale Boom (mb50.wordpress.com)
- USA: Mitsui Closes Texas Shale Oil/Gas Deal (mb50.wordpress.com)
- Marubeni Buys Eagle Ford Shale Assets (USA) (mb50.wordpress.com)
Friday, 6 May 2011, 9:20 am
Speech: US State Department
Good morning. Let me begin by expressing my appreciation to Meredith Miller, Bryce Wakefield, and NBR for inviting me to speak this morning about the critical issues of energy and resource security in Asia. I would also like to recognize Mikkal Herberg for giving us a strong basis for today’s conference in his paper titled Asia’s Rising Power and America’s Continued Purpose.
As Mr. Herberg’s paper notes, if Asia continues its current growth trajectory, the region will likely account for nearly ¾ of the growth in the expected growth in world oil demand between 2008 and 2030. With those countries’ oil imports from outside the region approaching 30 million barrels per day, we are looking at a figure that would account for just a bit less than the total current production of all OPEC countries.
There are similar trends when one looks at figures for Asian imports of coal, gas, ores, rare earths, and other resources. The numbers, however, represent something extremely important and positive – economic growth and expanded prosperity for hundreds of millions of people in the region. At the same time, though, they raise questions about how best to promote sustainable growth, not just for the economies of Asia, but the world as a whole.
Secretary Clinton has noted often that much of the history of the 21st century will be written in Asia. The region’s influence is growing and holds the key to our shared future. Asian countries are vital partners in a growing and more prosperous global economy. Their opinions and decisions have profound influence from Latin America to the Middle East and Africa on addressing complex and emerging transnational challenges, like energy and resource security, climate change, and transition to a low carbon economy. I doubt anyone in this room would disagree that it is essential to our long-term national interests that the United States remains true to its identity as a Pacific power.
On our economic engagement with Asia, let me highlight two significant bilateral strategic dialogues. Next week, we will hold the third round of the U.S.-China Strategic and Economic Dialogue, led by Secretary Clinton and Secretary Geithner, to continue pursuing a positive, cooperative, and comprehensive relationship with China. As Secretary Clinton has stated, “we are firmly embedding our relationship with China within a broader regional framework because it is inseparable from the Asia-Pacific’s web of security alliances, economic networks, and social connections.”
Later this year, at the third round of the U.S.-India Strategic Dialogue led by Secretary Clinton, we will continue to advance what President Obama has stated is a “defining partnership” with India – “bound by shared interests and our shared values.” The United States has also played a leading role in helping discussions move from the G8 major industrialized economies forum to the improved G20 forum, which reflects today’s global economy and recognizes the importance of the emerging Asian economies of China, the Republic of Korea, India, and Indonesia.
Within this context of a rising and prosperous Asia, one with which the United States wants and needs to be closely engaged, let me turn to the conference’s theme of Asia’s rising resource demands and the increasing nationalism by some countries to pursue needed energy and resources for energy security and economic growth. On issues of energy and resource security, the United States is pursuing a comprehensive strategy for cooperating with the Asian region – bilaterally, regionally, and multilaterally – with three key elements:
a) Energy and resource diversification,
b) Market-based solutions and increased transparency, and
c) Enhanced bilateral, regional, and multilateral cooperation.
Energy and Resource Diversification
First, there is no getting around the reality that energy and resources are vital for today’s economies. The world runs on energy – natural gas, coal, oil, nuclear, biofuels, wind, sunlight, or hydro. Energy is not a luxury; instead, as noted in the State Department’s Quadrennial Diplomacy and Development Review (QDDR), it is essential for economic growth. Energy is needed to run factories, to support agriculture, and for transportation. It is essential for human development, whether in terms of enabling a child to do her homework, to connect to the Internet and communicate, or to have a warm home and food on the table.
The growth in energy demand may slow or even decline in the developed industrialized economies, but demand for energy will likely skyrocket in China and India, just as it is expected to rise in other emerging market and developing countries – many of which are in Asia. China is expected to account for over one-third (36%) of the projected growth in global energy use, with demand rising by 75% between 2008 and 2035. Today, China accounts for 17% of global energy demand; by 2035, it will account for 22%. India is expected to account for about one-fifth (18%) of the rise in world energy consumption by 2035.
By comparison, the OECD developed industrialized economies, from which the IEA has drawn its membership, now account for less than 50% of global energy demand. When the IEA was established in 1974, these countries accounted for 75% of global energy demand. Propelled by rising populations and, perhaps more importantly, brisk economic growth in developing countries, there are those who wonder whether the increasing energy demand could outpace our capacity to produce and deliver needed energy supplies. Dire predictions have been around the energy world for decades, but the rise we are seeing in non-OECD energy consumption represents a watershed event. The developing (rather than the developed) world is expected to account for the lion’s share of global energy demand growth for the next several decades. These figures underscore an important truth – we will need to engage emerging economies, not just OPEC members, as influencing our energy security now and into the future.
To promote energy security and to be assured of access to other resources, we will all need to work with key Asian countries – traditional close allies like Japan and the Republic of Korea and the emerging powerhouses, such as China and India.
An essential aspect of promoting energy and resource security internationally as well as here in the United States is working towards greater energy and resource diversification. For the United States to lead this effort in Asia and globally, we must also lead at home. On March 30, President Obama outlined a comprehensive national energy policy called the Blueprint for a Secure Energy Future. As part of the U.S. plan, the Administration aims to cut dependence on oil imports by one third by 2025. To achieve this target, the President focused on the consumption side of oil, particularly in the transportation sector, which accounts for 70% of U.S. petroleum consumption. Steps outlined strengthened fuel efficiency standards for cars and trucks that will save 1.8 billion barrels of oil. Other steps include acting so that all purchased federal cars, one of the largest fleets in the country, will be hybrid or electric by 2015.
Moreover, the Administration has committed over $80 billion in clean energy technology through the Economic Recovery Act. However, the Government recognizes traditional fossil fuels will still be required, even as we make the transition to cleaner alternatives. The Administration looks, therefore, to boost oil supply through increased offshore drilling with appropriate safety regulations. Since access to oil alone is no longer synonymous with energy security, the Administration is supporting environmentally sound development of huge potential natural gas supplies, including through extraction from shale rock formations.
The United States is also developing stringent efficiency standards for appliances, buildings and motor vehicles, setting reduction targets over the next decade and providing incentives to help meet them. Similarly, we are making efforts to encourage energy efficiency beyond our borders, particularly with China and India, through our joint cooperation on clean energy research centers and through the International Partnership on Energy Efficiency Cooperation (IPEEC).
Like other countries, Americans cannot achieve energy security on our own. We need to engage emerging markets and developing countries, finding ways to include them in mechanisms that develop and maintain strategic petroleum stocks, foster understanding of the importance of sound investment regimes, and other aspects of market-based systems that can develop and supply needed oil and gas, and also supply new, innovative low carbon and other clean technologies. The United States is strengthening relationships with the future group of energy and resource producers. In 2009, the State Department launched the Energy Governance and Capacity Initiative (EGCI), which provides a wide range of technical assistance to the governments of some of the world’s next generation of oil and gas producers, helping them build the financial and regulatory capacity essential to manage these resources responsibly for their long term development and resource needs.
We are also taking a lead on helping to diversify energy sources through our robust clean energy cooperation. Under the President’s Global Climate Change Initiative, a wide range of U.S. government agencies are working together to accelerate the deployment of clean energy technologies and mobilize private-sector clean energy financing. This effort includes multilateral programs like the Clean Technology Fund, and dozens of regional and bilateral programs. The United States also launched and participates actively in the Clean Energy Ministerial process, an annual series of meetings devoted to accelerating the transition to clean energy technologies. To date, this process has served as a catalyst for important initiatives on carbon capture, electric vehicles, energy efficiency, smart grids, hydropower, solar, and wind.
With both India and China, our energy and climate change cooperation includes comprehensive MOUs for working together on clean energy development and deployment, and climate change mitigation. To promote cleaner energy, particularly in the developing world which relies so heavily on coal, the State Department has launched the Global Shale Gas Initiative (GSGI) to help countries assess their shale gas potential and provide regulatory guidance on its development. Under GSGI, the U.S. Geological Survey (USGS) will complete at least two additional resource assessment workshops in China and India, and release the results of the shale gas resource data analysis. State has also set up visits of technical experts from China and India as part of a U.S. Trade and Development Agency reverse trade mission. In 2010, the Department of Energy hosted the 5th U.S.-China Energy Policy Dialogue and the 10th U.S.-China Oil and Gas Industry Forum, bringing together government and private industry.
Indeed, natural gas has tremendous potential to help Asian countries and the rest of the world meet energy needs over the next 25 years. Even though China will depend heavily on coal to generate most of its electrical power, efforts are under way to increase the share of natural gas, nuclear power, and renewable energy. China is now one of the world’s fastest-growing liquefied natural gas importers, embarking on a major expansion of its gas pipeline infrastructure. As China develops policies and regulations to promote greater and more efficient use of natural gas, it can not only have a significant and beneficial impact on global energy security, but also on cleaner energy and reduction of greenhouse gas emissions goals.
We support a the continued safe expansion of nuclear energy as clean energy – including our long-running cooperation with China and incipient cooperation with India – while we all take a look at the lessons of the Japan’s nuclear emergency. Let us remember too, that cleaner energy is essential for helping us meet the challenges, not just of providing needed energy, but of mitigating greenhouse gases and climate change.
Asian countries – and the rest of the world – are looking not just at access to energy, but at questions about affordable access to metals and other commodities as well. Businesses and consumers seek secure access to these resources at a reasonable market price. Access to rare earth metals has been in the news, particularly since China’s dispute with Japan over the Senkaku Islands and China’s consolidation of its rare earths industry. While the action last fall was short-lived and had limited economic impact on the United States and other countries, it raised questions in the press about whether we could continue to take the availability of these metals, essential for computer and telecom technology and some clean energy technologies, for granted. A reduction in overall production coupled with an increase in domestic demand does not increase global energy security.
China may produce over 90, perhaps over 95% of the world’s rare earth metals, but China only has approximately half of global reserves. Therefore, progress continues to be made in bringing on-line additional mining and processing capacity in the United States as well as in Australia and Malaysia. I also have seen reports of South Africa looking to open mines and processing facilities for these metals, and it seems highly likely the new technologies coming on-line for processing will be more efficient and have reduced environmental impacts. Moreover, it is important to remember, resource diversification will also need to include new technologies and substitute materials that can provide alternative means of meeting growing market demand.
Market-based Solutions and Transparency
This brings me to the second element of the United States’ strategy on furthering energy and resource security – market-based solutions and increased transparency. In examining the drive for resources as Asian economies develop as well given continued demand in other parts of the world, it is essential to work to boost transparency in energy markets. Indeed, increased transparency will help reduce price volatility and encourage the move toward well-informed, functioning markets driven by international standards of supply diversity, moderate prices, and fair competition.
One way we have already done this is through the G20. Within the G20 framework, countries have pledged to reduce inefficient fossil fuel subsidies and to promote transparency in energy consumption and supply data. These efforts are crucial to reducing market price volatility and removing market distortions and barriers to trade. While some in the Chinese government have argued against more transparency, claiming that it aided speculators, the experience in the United States and elsewhere has repeatedly demonstrated that transparency allows market actors to make sound economic choices. With the growing demand for energy and resources to fuel economic growth and rising populations, it is critical that we work with the Chinese, Indians, and others in Asia and around the world to provide more timely and accurate production, consumption, and stock data for improving the functioning of oil markets and avoiding excessive price volatility. We are promoting global standards of data collection, analysis, and forecasting with China and India through bilateral cooperation with the U.S. Energy Information Agency. Multilaterally, we are working through the IEA and similar bodies to assist government officials with data training and opportunities to work in these organizations The U.S. is also setting the example for improving oversight of financial and energy-related markets through efforts by the U.S. Congress and the Commodity Futures Trading Commission (CFTC) and working with the International Organization of Securities Commissions (IOSCO) to harmonize approaches internationally.
As President Obama has stated, while we work towards making the transition to renewable sources of energy, we will still need traditional energy sources of oil, gas, and coal. This involves both supporting investment in existing markets and seeking to open up new markets. Most here would probably agree that global players like China and India should make safe investments for their resource demand and not invest in countries like Iran or Burma. We have discussed with their governments that their energy and resource security goals would be better served in other countries that can provide a reliable return on investment and help ensure reliability of resource supplies.
As Secretary Clinton has stated, we are encouraging the Chinese to “embrace internationally recognized standards and policies that ensure transparency and sustainability” while noting that Beijing’s activities have raised serious concerns in places such as Africa. Over the last decade, China has signed a string of multibillion-dollar deals to build highways, schools, hospitals, and other infrastructure while securing rights to African minerals and oil reserves. Sino-African bilateral trade has grown steadily at impressive rates since 2002, topping $115 billion last year. South Africa’s Standard Bank projects this trade to reach $350 billion in 2015. Chinese aid to African countries has grown so much in recent years that it has already surpassed aid provided by the World Bank. We welcome China’s commitment to development assistance, and we would like to work more closely to have common standards and approaches. For the United States, we think Africa will provide up to one-third of our total energy needs in the next decade. For China, too, Africa is an important source of oil, gas, and minerals. So it is in the interest of our mutual economic and resource security goals and of Africa’s development objectives.
Also, a key part of our message on market-based solutions is that countries, meaning both government and private sector actors, should consider making value-chain based investments in the energy sector, rather than foreign equity investments. Let me explain. In the oil sector, a value-chain investment includes putting financial resources in exploration and development, unconventional oil, refining, tankers, and pipelines. Some may argue growing equity production is essential to ensuring affordable and reliable supplies of energy; however, experience shows the international market will remain the main source of oil imports. Related to this, investments in new pipelines will also be important for the Asian region to diversify supplies, promote regional development, and realize the energy security countries in that part of the world seek.
Enhanced Bilateral, Regional, and Multilateral Cooperation
Turning to the third element for furthering energy security and cooperation with Asia, enhanced bilateral, regional, and multilateral links, let me highlight some of the key forums within the Asia region to promote resource security. Bilaterally, we have key energy and climate change dialogues with China, India, Japan, Indonesia, and other countries. These fora enable both sides to continue a dialogue on resource security issues as well as to promote tangible commitments, including with MOUs and Joint Statements. Regionally, we are striving to continue with the Five Party Energy Ministerial – originally proposed by China – and a focused discussion on energy security issues with the key economies in Asia (China, India, Japan, and the Republic of Korea). Also, as the United States hosts APEC this year, we continue our efforts in the Energy Working Group to promote mutual goals of energy security and the transition to a low carbon economy. We are also working to advance programs to enhance energy efficiency, increase water conservation and productivity, develop renewable electric power resources, and manage water-energy relationships. All of these efforts will help to reduce conflict and ensure sustainable growth.
A key part of my work has been on the efforts of the IEA to engage key non-member countries, especially China and India and increasingly other growing Asian energy-consumer countries such as Indonesia and Thailand. As we have discussed, the world’s energy markets have changed since the establishment of the IEA. To be effective in this new landscape, and to realize its mission, the IEA must be prepared to evolve, aligning strategies and priorities to reflect these new realities. With China and India having increasing influence and impact on world energy markets, we are working hard to promote their enhanced engagement with the IEA. This includes training and programs on emergency response exercises, data collection and analysis, and sharing world energy trends and policy recommendations. As part of the IEA’s outreach with Asia, this week, IEA colleagues and member country representatives are holding the first multilateral emergency response exercise with APEC countries in Bangkok. These efforts are significant in laying the groundwork to promoting an open dialogue among consumer countries towards furthering collective energy security. Equally important for furthering our energy cooperation with Asia are other international energy forums, including IRENA, IPEEC, Clean Energy Ministerial, IEF, and others.
In closing, let me stress that we see this as a time of exciting opportunities, of possibilities. The United States government is developing thoughtful, realistic, and creative policies that balance and embrace goals of economic growth, resource security, and sustainable development. We are working with a range of partners in the region on these challenges in Asia and other parts of the world. Transformation will not happen immediately; what is key is managing the transition. As the President has stated, both at home and globally, it is important to develop a comprehensive energy policy. The United States is seizing opportunities to transition to a low carbon economy by supporting technology, research, efficiency, and lower carbon technologies, while simultaneously ensuring that the international energy system remains robust.
As you engage in discussions today on the rise of energy and resource nationalism in Asia and implications for U.S. energy policies, I would stress that U.S. energy diplomacy is robust and is promoting reliable, affordable, and diverse supplies of energy and resources.
Thank you and I look forward to your questions and comments.
- Obama’s risky oil threat to China – The Nation, Pakistan (nation.com.pk)
- U.S.-China tensions risk spilling over into Asia summit (mb50.wordpress.com)
- The Report the White House Doesn’t Want You To Read (mb50.wordpress.com)
- By 2040 China will match US oil demand (scienceblog.com)
The impacts that the international liquefied natural gas market will see from shale gas production growth in North America and across the globe will vary widely according to local market conditions, members of a panel at the Offshore Technology Conference in Houston said Wednesday.
In the US, where the “shale gas revolution” first started and already is well under way, domestic gas supplies have severely cut into the demand for imported LNG, Emma Cochrane, manager of gas power and marketing for ExxonMobil, said.
With ample gas supplies to meet US gas demands most of the time, LNG imports will largely serve to meet seasonal balancing needs, she said.
“Imports will mostly come in the summer, where there is nowhere else for the gas to go,” Cochrane said. As a result of the inflow of gas supplies from shale plays across the nation, “the US becomes almost self-sufficient” in meeting its gas demand in the future.
In other regions of the world, however, the growth of shale gas production will be less of a factor in supply-and-demand dynamics than more localized factors, Rafael McDonald, associate director of global gas research, IHS CERA, said.
“We see an acceleration of the tightening of the global gas market,” he said. However, the resurgence of gas demand in the wake of the global recession will result in “a multi-speed recovery,” with some regions outpacing others.
“In terms of GDP and gas demand, some places never dipped, like Brazil and China. Some dipped but came roaring back, like South Korea, and some continue to languish,” he said.
Australia, which has ambitious plans to dramatically increase its liquefaction and LNG export capacity, could someday surpass Qatar as the world’s largest LNG exporter, McDonald said. “There are some questions still. There 28 million tons of capacity already, with over an additional 100 million tons of capacity planned,” he said.
He added that “all of that can’t come on line,” as Australia does not have the resources to increase its LNG capacity to the extent that LNG developers envision.
Davis Thames, president of Cheniere Marketing, described how the changing dynamics of the international gas market has led his company to announce plans to convert its Sabine Pass LNG receiving terminal in Cameron Parish, Louisiana into bi-directional terminal capable of exporting as well as importing LNG.
“In the US, we have a natural gas market that doesn’t exist anywhere else in the world,” he said. Technological innovations in gas production techniques have resulted in “a tremendous amount of gas,” coming onto US markets, driving down the domestic costs of gas and destroying the economic rationale behind building LNG import-only terminals.
As a result, Cheniere is reinventing its business model from the traditional LNG import terminal, Thames said.
“We’re providing a midstream service,” he said. Cheniere’s proposed bi-directional LNG facility “looks more like a pipeline,” than a traditional LNG import terminal, he said.
Houston-based Cheniere, which owns the 4 Bcf/d Sabine Pass LNG import terminal, in August 2010 applied to US authorities for permission to export gas produced in the Lower-48 states.
–Jim Magill, email@example.com
24 August 2010
The first multilateral meeting of the Global Shale Gas Initiative (GSGI) took place in Washington on August 23 and 24, hosted by the U.S. Department of State’s Coordinator for International Energy Affairs David L. Goldwyn. Poland and sixteen other countries sent representatives to attend the GSGI Conference to discuss the importance of shale gas as a lower-carbon fuel option that can help reduce CO2 emissions while ensuring energy security and economic development in the 21st century. Dr. Piotr Litwa, President of the State Mining Authority, Director Ewa Zalewska of the Ministry of Environment, and Counselor Katarzyna Kacperczyk of the Foreign Ministry represented Poland at the Washington conference. “Poland has emerged as a leader in supporting shale gas exploration. The Polish delegation brings to Washington a set of lessons and experiences – best practices – from which other countries can learn,” said U.S. Ambassador Lee Feinstein. “Our common goal is to deploy U.S. technology and investment to develop cleaner, more secure energy resources. The GSGI conference the latest in a series of cooperative efforts aimed at just that.
While visiting Krakow in July, Secretary Clinton said, “We think that Poland, in particular, has a very good opportunity to be a leader in a full range of energy issues, including shale gas… At the political and national level, this is a very good sign of Polish leadership in the energy sector, because energy security and independence is one of the most important aspects of national security in today’s world.”
In April, Secretary Clinton and Foreign Minister Sikorski established a high-level dialogue to build deeper public and private cooperation on regional energy security. U.S. investment in “shale gas” exploration holds the promise of converting Polish dependence on imported natural gas into an alternative, secure Polish supply of natural gas exports for the region. The U.S.-Poland Shale Gas Working Group brings our two governments together to support the safe, successful introduction of U.S. shale gas extraction technology into Poland.
Countries have been selected to participate in GSGI based in part on the known presence of gas-bearing shales within their borders, market potential, business climates, geopolitical synergies, and host government interest. Within GSGI, countries are categorized into Tier 1 and Tier 2. Tier 1 countries have the greatest potential for benefiting from GSGI opportunities. Tier 2 encompasses a broader set of countries that have expressed interest and meet GSGI criteria. To date, partnerships under GSGI have been announced with China, India, and Poland.
The Department of State (DOS) launched the Global Shale Gas Initiative (GSGI) in April 2010 in order to help countries seeking to utilize their unconventional natural gas resources to identify and develop them safely and economically. Shale gas is one of the most rapidly expanding trends in onshore U.S. oil and gas exploration and production. According to Energy Information Administration (EIA), during the last decade, U.S. shale gas production has increased eight-fold; it now accounts for 10% of U.S. gas production and 20% of total remaining recoverable gas resources in the U.S. By 2030, EIA projects that shale gas will represent 7% of total global gas supplies, providing the reserve base necessary for expanded consumption in a business as usual scenario.
- Seven People Have Been Charged With Corruption Over Shale Gas Exploration In Poland (businessinsider.com)
- Poland detains 7 suspected of shale gas corruption (reuters.com)
- 7 charged with corruption over shale gas in Poland (foxnews.com)
The White House Office of the Press Secretary For Immediate Release November 17, 2009
Today, President Hu Jintao announced a far-reaching package of measures to strengthen cooperation between the United States and China on clean energy. Attached are six fact sheets on the U.S-China clean energy announcements.and
1. U.S.-China Clean Energy Research Center. The two Presidents announced the establishment of the U.S.-China Clean Energy Research Center. The Center will facilitate joint research and development of clean energy technologies by teams of scientists and engineers from the United States and China, as well as serve as a clearinghouse to help researchers in each country. The Center will be supported by public and private funding of at least $150 million over five years, split evenly between the two countries. Initial research priorities will be building energy efficiency, clean coal including carbon capture and storage, and clean vehicles. The Protocol formally establishing the Center was signed in Beijing by U.S. Energy Secretary Steven Chu, Chinese Minister of Science and Technology Wan Gang, and Chinese National Energy Agency Acting Administrator Zhang Guobao.
2. U.S.-China Electric Vehicles Initiative. The two Presidents announced the launch of the U.S.-China Electric Vehicles Initiative. Building on the first-ever US-China Electric Vehicle Forum in September 2009, the initiative will include joint standards development, demonstration projects in more than a dozen cities, technical roadmapping and public education projects. The two leaders emphasized their countries’ strong shared interest in accelerating the deployment of electric vehicles in order to reduce oil dependence, cut greenhouse gas emissions and promote economic growth.
3. U.S. China Energy Efficiency Action Plan. The two Presidents announced the launch of a new U.S.-China Energy Efficiency Action Plan. Under the new plan, the two countries will work together to improve the energy efficiency of buildings, industrial facilities, and consumer appliances. U.S. and Chinese officials will work together and with the private sector to develop energy efficient building codes and rating systems, benchmark industrial energy efficiency, train building inspectors and energy efficiency auditors for industrial facilities, harmonize test procedures and performance metrics for energy efficient consumer products, exchange best practices in energy efficient labeling systems, and convene a new U.S.-China Energy Efficiency Forum to be held annually, rotating between the two countries.
4. U.S. China Renewable Energy Partnership. The two Presidents announced the launch of a new U.S.-China Renewable Energy Partnership. Under the Partnership, the two countries will develop roadmaps for wide-spread renewable energy deployment in both countries. The Partnership will also provide technical and analytical resources to states and regions in both countries to support renewable energy deployment and will facilitate state-to-state and region-to-region partnerships to share experience and best practices. A new Advanced Grid Working Group will bring together U.S. and Chinese policymakers, regulators, industry leaders, and civil society to develop strategies for grid modernization in both countries. A new U.S.-China Renewable Energy Forum will be held annually, rotating between the two countries.
5. 21st Century Coal. The two Presidents pledged to promote cooperation on cleaner uses of coal, including large-scale carbon capture and storage (CCS) demonstration projects. Through the new U.S.-China Clean Energy Research Center, the two countries are launching a program of technical cooperation to bring teams of U.S. and Chinese scientists and engineers together in developing clean coal and CCS technologies. The two governments are also actively engaging industry, academia, and civil society in advancing clean coal and CCS solutions. The Presidents welcomed: (i) a grant from the U.S. Trade and Development Agency to the China Power Engineering and Consulting Group Corporation to support a feasibility study for an integrated gasification combined cycle (IGCC) power plant in China using American technology, (ii) an agreement by Missouri-based Peabody Energy to invest participate in GreenGen, a project of several major Chinese energy companies to develop a near-zero emissions coal-fired power plant, (iii) an agreement between GE and Shenhua Corporation to collaborate on the development and deployment of IGCC and other clean coal technologies; and (iv) an agreement between AES and Songzao Coal and Electric Company to use methane captured from a coal mine in Chongqing, China, to generate electricity and reduce greenhouse gas emissions.
6. Shale Gas Initiative. The two Presidents announced the launch of a new U.S.-China Shale Gas Resource Initiative. Under the Initiative, the U.S. and China will use experience gained in the United States to assess China’s shale gas potential, promote environmentally-sustainable development of shale gas resources, conduct joint technical studies to accelerate development of shale gas resources in China, and promote shale gas investment in China through the U.S.-China Oil and Gas Industry Forum, study tours, and workshops.
7. U.S. China Energy Cooperation Program. The two Presidents announced the establishment of the U.S.-China Energy Cooperation Program. The program will leverage private sector resources for project development work in China across a broad array of clean energy projects, to the benefit of both nations. More than 22 companies are founding members of the program. The ECP will include collaborative projects on renewable energy, smart grid, clean transportation, green building, clean coal, combined heat and power, and energy efficiency.
- Bloomberg New Energy Finance: U.S The Clean Energy Leader? (solarfeeds.com)
- New Report – Outlook Mostly Cloudy for Coal, Brighter for Clean Energy (shadowwolf32.wordpress.com)
- U.S. Government Downgrades Projections for Coal. Again. (thinkprogress.org)