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The Forum > Article Comments > Shale gas: the view from Russia > Comments

Shale gas: the view from Russia : Comments

By Dmitry Orlov, published 11/5/2012

In the best gas acreage in the US the return from a well is one-two-hundredth that of the average well in Russia.

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It appears that the long term gas prospects for Victoria, New South Wales, South Australia and Tasmania depend upon the success of fracking. It had been thought that post carbon tax that ageing coal fired baseload plant would be replaced with combined cycle for 50% CO2 savings. However increases in the price of gas fuel could quickly erase the carbon tax advantage.

To make matters worse LNG export is sucking up most of the WA offshore gas and a large part of Qld coal seam gas. Shell is building the world's largest ship to liquefy gas at sea off WA and load it directly onto tankers so that a pipe to shore is unnecessary.

Minor onshore players are hopeful that fracking and horizontal drilling will pay off
http://www.adelaidenow.com.au/business/beach-encouraged-by-shale-gas-results/story-e6frede3-1226337298344
but Australia will need at least 20 million tonnes of gas of year for the indefinite future. That's for peaking power, heating applications, fertiliser and plastic production and to balance existing wind and solar generation. It does not include a wholesale switch to CNG as a diesel replacement or replacing big coal power stations in the NSW Hunter Valley or the Vic Latrobe Valley. I'm not sure where the gas will come from for the Sydney trigen experiment.

My guess is that in the next year or two there will be a fracking reality check. I'd like one of the Canberra think tanks to estimate how much gas Australia will need to say 2050, how much we can afford to export and what if fracking disappoints.
Posted by Taswegian, Friday, 11 May 2012 11:36:34 AM
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Tas,

2050?

Get real, by 2030 there will be no affordable oil or petrol for the masses. WE will collectively kill each other well before 2050.

Mad max? Heaven compared to the "Rwandascape" that is going to happen.

Facebook and smart techs won't help. No oil, no tech! It takes massive amounts of oil in plastics for starters.

It is that bleak! What's worse politicians are smart enough to KNOW this. But they devise diversions like the ETS and CO2 greenhouse climate that they use to tell us they are solving the problem while knowingly making it worse and getting their rocks off with the power that brings.

Mad max had it easy!
Posted by KAEP, Friday, 11 May 2012 11:51:04 AM
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Right, so the yanks are fudging the books while the russkies are on the up and up; that's a great premise to glue a few dismal 'stats' about the shale gas bubble around; still it hooked a couple of doom and gloomers. Stock up on those cans boys!

Seriously, uranium, thorium, deuterium, all neglected while tens of billions is thrown at 'renewables'.

Well and good that the greens hate the corporate mongrels who control fossils and the uraniums but the perversity of their position is that the real energy sources are being thrown out in attacking the corporates.
Posted by cohenite, Friday, 11 May 2012 12:59:11 PM
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If the US gas is too expensive to market to Europe so be it.. if its too expensive, at present prices, then the hype will die away... It is all the better for Aus as we already had vast gas reserves before any of this..

KAEP - its been shown to you so many times that oil, as such, is not going to run out any time soon.. go back to earlier this week on this forum http://www.onlineopinion.com.au/view.asp?article=13589

Teh author of that article is a peak oiler and he is agreeing that it doesn't mean the end of oil as such.. just a switch from conventional to unconventional/deep sea.. now I still disagree with that, but his position is at least an arguable one while yours is not. He even claims people like you (saying oil will run out) are so few as to not be worth mentioning..
Posted by Curmudgeon, Friday, 11 May 2012 1:58:00 PM
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There’s an old saying that a half truth, like a half brick, travels further and does more damage.

This article is full of half-truths designed to paint unconventional gas in an unfavourable light.

So it’s true that fracking technology has been around for decades, but the horizontal drilling techniques that also underpin the boom in US shale gas are new.

It’s also true that unconventional gas wells typically yield less gas than conventional ones, and exploiting unconventional gas field means regularly closing existing wells and drilling new ones. Geology prevents gas from migrating easily through the shale. The key question is the amount of gas that can be extracted economically, not the number of wells needed to do it. Drilling lots of wells is no problem if each one covers its costs.

If the Poles found too much nitrogen in their gas they can either clean it or leave it in the ground. There is no reason to suspect that ALL shale gas contains too much nitrogen to be economic – it’s clearly not so in the USA.

It’s true that the gas market is currently highly segmented, and spot sales are rare. The economics of LNG mean that costs increase sharply the further the ship has to travel, and this limits the capacity of producers to compete over long distances. But there is no reason in principle why these segments couldn’t be blurred, especially at the edges, as the economics change. The USA mothballed its LNG import terminals thanks to the development of unconventional gas and is now starting to convert some to export rather than import gas. Markets change. And it you were a Japanese gas purchaser, would you rather buy from Russia or the USA, given the former’s record of withholding supplies for economic and political ends?

The US shale gas story is a target for catastrophiles because it demonstrates yet again what they persistently refuse to accept – that markets work. High energy prices induce exploration and innovation to find new ways of meeting energy needs.

The lights aren’t going off any time soon.
Posted by Rhian, Friday, 11 May 2012 3:15:39 PM
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I would prefer we spent all our available exploration funds finding and deploying endlessly available alternatives; that would finally free us from the ironclad economy destroying grip of the super rich fossil fuel industry.
As long as we humans produce biological waste, we will be able to produce locally produced biogas in sufficient quantities to completely power our high rise apartment blocks and or suburbs! Moreover, for around a third of what we currently shell out for coal-fired power.
Large scale algae very low water use farming, would save both the Murray/Darling and all who depend on it. Algae can be produced in closed cycle systems for just one or two percent of the water requirements of other irrigated crops! Large clear plastic pipes, or clear plastic covered storage tanks/dams.
A million tons of algae can become two million tons tomorrow and four million tons the day after; or, 2.4 millions tons of easily extracted bio-diesel! Multiply that by a thousand or so moderately sized farms/enterprises to understand what some very modest investment options could conceivably produce; and, for generations to come!
Some algae are up to 60% oil, which is virtual child's play to extract, as a virtually ready to use bio-diesel.
Algae absorb around 2.5 times their bodyweight in Co2 and under optimal conditions, double that body weight every 24 hours.
Very large scale solar thermal power plants could double as hydrogen producers, utilising water molecule cracking, which would reduce hydrogen production to well below current NG costs, and furthermore, forever, or as long as the planet supports human populations!
Were we to get ahead of the production curve in any of these areas, we would be very well placed and very prosperous, when others finally followed our pragmatic planet protecting lead! Rhrosty.
Posted by Rhrosty, Friday, 11 May 2012 3:58:03 PM
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Rhosty,

You have detailed these plans a few times now and I admit I am not qualified to judge the economic viability of these plans. Have you invested your own money into this idea? Is there a business/company investing in this, and if so are they making profit?
Posted by Stezza, Sunday, 13 May 2012 1:32:12 AM
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Not all that long ago, we knew as immutable scientific law the the sound barrier couldn't be broken! Now that barrier is routinely broken and not just by military aircraft.
We knew as immutable law that the speed of light was the ultimate barrier and one we would never ever be able to cross; until we found the melbar particles, which seem to do just that; albeit, confined to certain lines or magnetic stellar tracks?
Now, we know that the law of thermodynamics is another of those unbreakable immutable scientific laws. Even as US scientists seem to, through a patented process, be able to produce a net energy gain from electrolysis, via the agency of adding a catalyst to the water?
We know that we can produce hydrogen via electrolysis. We also know we can pipe hydrogen over very long distances, without any significant losses, as might be par for the course with electricity transmission, we also know that there are around 20% losses, when we convert the hydrogen back into electrical energy!
However, and as demonstrated by the patented process referred to, the addition of a cobalt catalyst to the water, reduces the required electrical energy input; by around 50%, for the same hydrogen production; as would be obtained by the current traditional method.
Meaning, when we burn the hydrogen in the same fell cell for the same current losses, we still are able to achieve around 30% more energy returned, than that now required for the initial decomposition process.
It seems that the immutable law of thermodynamics, is immutable no more?
I don't know what we are actually looking at here, but it could be the long longed for cold fusion process and almost costless endless power, or the scientific signpost leading to it; and or, a practical electrically powered ion drive; that finally opens up the stairway to the stars?
Posted by Rhrosty, Sunday, 13 May 2012 10:59:46 AM
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Steeza; there are working examples, but you might need to travel! We are just not bright enough to invest in alternatives, particularly those that don't make mega bucks for debt laden foreign speculators?
Conversely, still govt owned Tarong power in SEQ, is trialling algae production as a response to carbon emission. Algae absorb up to 2.5 times their own bodyweight in Co2 smokestack emission; and under optimised conditions; literally double that bodyweight every 24 hours!
Profit Steeza? I believe you have almost single-handedly underlined the very reason the world and or its human population is in such sorry shape today.
Every western economy rests on just two economic pillars; energy and capital! Privatising and profiteering, and thinking inside very limited circles of ideas, have white anted/crippled these two same dangerously leaning pillars.
Cheap publicly owned and operated energy production gave us our once vibrant manufacturing economy, and made us the third most prosperous nation on earth; and a creditor one at that.
Returning to that same energy production paradigm, will not only rebuild it, but create almost endless opportunities for innovative entrepreneurs; but particularly, if we finally understand the road to universal prosperity lies in investing govt money, in our own people and their better ideas.
All very doable if we but grasp the nettle and bring vast simplification and reform to our tax system; which would end forever the need to endlessly shell out or devote time to compliance or reconciliation, which currently rips out around 7% of the averaged bottom line.
The cheapest cleanest greenest energy on the planet coupled to the lowest tax take, in real terms, will be all we need do, to encourage a reverse exodus and or most of the energy dependant high tech manufacture to relocate here.
Don't give me all the myriad reasons that can't be done, because can't died in a cornfield over a hundred years ago! But rather focus your mind and considerable talents, on all the ways we might achieve far better outcomes, that actually bless us all, rather than a shrinking band of quite grossly overfed elites? Rhrosty.
Posted by Rhrosty, Sunday, 13 May 2012 11:47:01 AM
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What concerns me about uncoventional oil and gas are the high environmental costs. We have to look beyond the purely economic and determine what havoc will be wreaked on the biosphere from their production and use. There will, of course, be an economic cost to that but not one borne by the producer/extractor. For instance, pollutants from the production of oil from the Athabasca tar sands in Alberts, Canada, flow into north flowing rivers and will pollute the Arctic biota, not to mention the forgone greenhouse sink of the spruce forests that have to be destroyed to allow the open cut mining. Will a new Kyoto Protocol set a carbon price that makes this tar sand production uneconomic, not to mention Venezuelan heavy oil or US shale gas?
Posted by popnperish, Sunday, 13 May 2012 12:02:35 PM
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Popernish; the thing that will make both Canadian tar sands and the vast bulk of Russian oil production uneconomic, will be endlessly available cheaper cleaner and carbon neutral alternatives, like Farmed Algae.
Some algae are up to 60% oil and child's play to extract, utilising power station waste heat or solar thermal energy.
The only thing still successfully growing in the Murray/Darling at the height of the most recent drought, was algae. Our algae is apparently preferred by US alternative producers. Algae absorb up to 2.5 times their own bodyweight in Co2 emission; and double that bodyweight in as little as 24 hours, given optimised conditions. Waste effluent eminently suitable.
Green energy, Boston Massachusetts, have been trialling Algae in smoke stack emissions, with considerable success for at least a decade, and are talking about a green future, where all the diesel is green.
One producer in silicon valley has been running a couple of diesel powered mercs on the stuff for years.
Its proven technology not pie in the sky stuff, as continuously put about by apologists for the fossil fuel industry, which clearly has the most to lose, when we embrace much cheaper clean green alternatives.
Basically, all that prevents us from converting to the cleaner green alternatives, is greed and or, price gouging proponents, who likely would make a healthy profit from $10.00 a barrel, but want $100.00? $100.00 is okay, if it's for ready to use bio-diesel, but at $10.00 it would destroy most of the fossil fuel profit base; and that's why it's so hard to get the message through?
As noted by one Saudi oil/energy minister, the stone age didn't end because of a shortage of stone. And indeed, opined that hydrogen would likely replace oil as a portable energy source long before we/they actually ran out of oil. The fossil fuel industry is currently raking in over 4 trillion PA, and have the most to lose, as indeed does the drill rig industry, currently getting around a billion for each and every marine rig. Rhrosty.
Posted by Rhrosty, Sunday, 13 May 2012 5:23:11 PM
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