Presenting the oil company’s energy outlook to 2030, BP said North America’s energy deficit would turn into a “small surplus” by that year. That contrasts with Europe, which will have to import some 60 per cent of its natural gas by 2030 as demand grows and domestic production declines.

Read more HERE (registration required)

The Mayan calendar prophesied the end of the world this December.  But for Latin America’s energy scene, the year is shaping up to be anything but a march toward the end of time.  There are several themes to consider as 2012 unfolds.

For starters, the year counts several elections with important geopolitical and energy implications.  Without Leonel Fernandez on the ballot, residents of the Dominican Republic will choose from a new slate of candidates in May. Mexico goes to the polls on July 1st to choose Felipe Calderon’s successor.  In October, Venezuela conducts another referendum on Hugo Chavez’s 21^st Century Socialism.  November’s election in the United States will decide the fate of Barack Obama’s presidency.

The topic of unconventional sources of hydrocarbons remains vital. What these long-unexploited resources are now doing to upend the conventional wisdom when it comes to energy policy debates across the hemisphere shows no sign of abating. Indeed, the focus on shale gas and its potential will continue to impact natural gas and liquefied natural gas developments across the hemisphere.

Read more from Jeremy Martin of the Institute of the Americas of HERE

The multibillion-dollar facility was procured before the US began producing abundant quantities of natural gas from hydraulic fracturing – or “fracking” – a process used to unlock the gas in shale rock.

“I think yes, why not?” said Abdullah bin Hamad Al Attiyah, who is also a former chairman of QP, when asked whether QP’s Golden Pass liquefied natural gas (LNG) regasification terminal in Texas would be converted.

“It’s not very attractive to sell gas into the US market,” Mr Al Attiyah said.

“The world needs a lot of gas, and I think [US] shale gas will play a role in that.”

His comments came as QP’s minority partners in the project enter discussions over exporting shale gas as LNG from Alaska, and the first conversion of an import terminal is drawing close.

With a production capacity of 77 million tonnes per year, Qatar is the world’s largest exporter of LNG.

The US, a long-time importer of gas, was a natural target market untilfracking made the production of gas in deep rock formations commercially viable.

“People used to say that shale gas couldn’t compete with natural gas … In my 40 years in the industry, I have learnt one thing: don’t believe in forecasts,” Mr Al Attiyah said at the Gulf Intelligence Forum held in Abu Dhabi this week.

Shale gas has pushed US domestic gas prices below the international average and has opened the door to the US becoming a gas exporter. A host of import terminals, built on the assumption of continued inflows, stand ready to be converted for export.

Converting a terminal involves the expensive task of adding cooling units to liquefy gas.

A terminal in Texas owned by Cheniere Energy is tipped to become the first facility to be repurposed, and the reconfiguration could be complete by 2015.

Last week, the three major gas producers in Alaska, BP, ConocoPhillips and ExxonMobil, announced that they were in discussions about building an LNG terminal to export the state’s gas to the Asia-Pacific market.

“What we see is a strong, good Asian-Pacific market and that’s where we think Alaska gas should go,” said Jim Mulva, the ConocoPhillips chief executive. ExxonMobil and ConocoPhillips are QP’s minority partners in the Golden Pass terminal, which became operational last March.

Golden Pass will not be used to ship Alaskan gas, and ambitions to export US gas could be hampered by the government’s caution.

After approving Cheniere’s terminal adaption, the US department of energy has initiated a study over the impact of the project on domestic gas prices. The department could stall on further permits until the study is complete, and the results could also prove prohibitive, said Mike Zenker, a gas analyst at Barclays Capital in the US.

The high cost of adding liquefaction units, and a limited demand for gas internationally, will restrict the number of export terminals in North America for the foreseeable future.

“We peg it at two, partly because there is not an unlimited appetite on the market to take volumes, and partly because of the limitations of putting projects together that are financeable,” Mr Zenker said.

Source: The National

Robert Dudley of BP, James Mulva of ConocoPhillips and Rex Tillerson of ExxonMobil met with Parnell and then, along with the governor, briefed state legislators on the talks in a separate meeting.

Parnell met with the CEOs to discuss how to align the major Slope producers on a major gas project. ExxonMobil Corp., another major producer, participated in the meetings but did not comment afterward while the leaders of BP and ConocoPhillips said their companies now believe LNG is the best way of marketing gas from the Slope.

“Given the outlook with shale gas in the Lower 48, it looks like LNG has the best potential. We’re not saying the pipeline (to Canada) is impossible,” but a pipeline to southern Alaska to an LNG plant appears to have the best prospects, BP CEO Dudley told reporters following the meetings with Parnell and legislators.

ConocoPhillips’ Mulva agreed with Dudley.

“We believe LNG is the best alternative for North Slope gas, far better than any alternatives,” Mulva said.

Parnell said the three companies have agreed to work with the state on a review of all alternatives including an LNG export project as an alternative to an all-land pipeline from the North Slope to Alberta.

TransCanada and ExxonMobil are now pursuing a land pipeline with state support under the Alaska Gas Inducement Act, or AGIA, but Parnell said an LNG project could be done under the framework of the existing agreement with TransCanada.

Read More HERE

The deal valued at  $1.67bn, sees Plains Midstream, a subsidiary of Houston-based Plains All American Pipeline acquiring ownership or rights to 4,000km of pipeline systems, along with 21m barrels of storage and additional gas processing capacity in the region.

The move follows November’s collapse of BP’s agreement to sell a majority stake in Argentina’s second-largest oil producer to Bridas.

The shakeup over shale gas — a newly available fuel that has overturned assumptions about energy, climate-change and geopolitics — has now stretched across the Atlantic to England. A drilling company backed by John Browne, the former CEO of BP, says it has discovered the gas equivalent of up to 35 billion barrels of oil. In oil, a find of 1 billion barrels is regarded as a supergiant.

Until now, the United States has been the epicenter of the shale gas disruption. This gas is locked into barely porous shale rock a mile and more beneath the surface of the Earth. Over the last few years, drillers have extracted the gas using a method called hydraulic fracturing, or fracking — injecting a mixture of water, chemicals and sand at high pressure into the rock — which has produced a bonanza of new supplies in the United States. Estimates are that it is sufficient to meet current U.S. consumption for a century.

Since gas emits just a third to a half the CO2 as coal, this gas glut — to the degree it results in an accelerated shift away from coal-fired to gas-fired power plants — could lower U.S. emissions of heat-trapping gases.  As for geopolitics, the gas has already had the boomerang effect of casting doubt on Russia’s economic and political leverage in Europe — Russia supplies more than a quarter of Europe’s gas, but the shale gas glut has challenged that market dominance.

All this impact has led to a search for shale gas elsewhere, especially in Europe and China.

Yet with the shale gas comes a backlash of local politics. In the U.S., drillers have been confronted with a furious protest movement of critics who say fracking contaminates drinking water supplies. In Europe, the protests have preceded any discoveries — in the summer, for instance, France banned fracking.

Now, a U.K. company called Cuadrilla Resources says it has indications that a formation called the Bowland Shale is comparable in scale to the best U.S. finds, reports Guy Chazan at the Wall Street Journal. Cuadrilla’s Dennis Carlton told Bloomberg’s Ben Farey that the thickness of the gas-laden shale — 3,000 feet in places — is up to 10 times that of the ultra-rich Marcellus Shale that underlies New York and Pennsylvania. Cuadrilla’s main investors include the hedge fund Riverstone Holdings, which is run by former BP CEO Browne.

That is just gas in place. What actually can be extracted will be much less. But the announcement caused much excitement in both directions — from those enthused that the U.S. bonanza can be repeated on the other side of the Atlantic, and groups that wish to stop it.

As the company made its announcement in the Imperial Hotel in the city of Blackpool, a small protest was held out on the street by a group called Campaign Against Climate Change, the BBC reports. WWF, an environmental group, urged the U.K. government to call a moratorium on shale gas drilling, and instead to focus its efforts on development non-fossil fuel technologies. These critics are invigorated by two earthquakes that happened in the area in June, after which the company halted drilling.

That John Browne is the money behind this venture is ironic. In his long tenure, Browne rebranded BP into the green oil company, casting the company’s name as meaning “Beyond Petroleum.” His apparently successful into shale gas goes the other direction as far as critics are concerned.

Source: The Oil and the Glory with thanks to Steve LeVine

The key to the new business model for small independent exploration and production (E&P) companies is a current market imbalance of supply and demand. Production capacity for shale gas continues to grow – mostly thanks to innovations in drilling technologies – while natural gas prices remain low.

“Together, shale gas and [liquified natural gas] are abundant new sources of gas that can be produced at lower prices than gas from conventional sources and it is anticipated that both of these sources will continue to grow significantly in the long term,” write Sampat Prakash and Rick Carr, consultants for Deloitte and authors of the article.

While the apparent abundance of shale gas in the US is driving producers towards the natural gas route, so too is the black shadow that lingers over oil after the BP disaster in the Gulf of Mexico.

Since the shale boom was essentially started by small independent E&P companies, however, the eyes of the oil majors weren’t focused on “the bridge fuel.” But over the past year, that has changed.

“While the independents are building low-cost, lean organizations, larger international independents, majors, and national oil companies are taking notice,” the article says. “As they watch the transformation of small North American independents into industry movers, they are employing strategies and seeking new business models to gain entry into the unconventional assets that up until now have been mostly dominated by these smaller independents.”

This model – which includes partnering with independent producers, strategic acquisitions and leveraging technology from the US in other regions – is creating a “new breed” of E&P companies in the shale gas industry. In turn, these companies are the driving force behind a new, strong, unconventional gas market.

“Shale gas production will quickly become a global approach to gas development where independents, super majors, and national oil companies will benefit,” the article says. “This will not only drive growth and opportunities through the exploitation of core competencies and technology, but will also provide the platform for additional technology development through introduction to new regions.”

READ THE FULL ARTICLE

“It’s a very big plus for the US economy and energy security,” said Pete Stark, vice-president of industry relations for consultant firm IHS Cera. “It’s new jobs, and it could offset 1m barrels per day of imports.”

With operational costs in oil rising, and public opinion flailing after BP‘s catastrophic oil spill in the Gulf of Mexico this summer, interest in shale fields in growing and new, untapped resources are being targeted.

Raoul LeBlanc, senior director at PFC Energy, told the Financial Times that one such shale play is the Niobrara Shale located in Northeast Colorado, Northwest Kansas, Southwest Nebraska and Southeast Wyoming.

Some analysts estimate shale oil extraction is profitable at $50 a barrel, far below the current $70 price, says the Financial Times, so even small companies are investing in this revolutionary energy source.

READ THE FULL ARTICLE

“Historically gas has been undervalued in the market,” said Tony Meggs, former head of technology for BP and moderator of the MIT conference. “Getting the gas to the consumer was a serious pain in the ass compared to a barrel of oil. Two things are changing gas markets: the climate debate [and] the shale gas boom.”

A shift to cleaner and more renewable energy sources is undoubtedly making shale gas an attractive option said Jeff Fisher, Senior Vice President of Production for Chesapeake Energy, the leading player in the new gas industry.

“Combined with wind and solar energy, [shale gas provides] a long-term viable renewable energy mix,” he said.
Henry Jacoby, a professor at MIT who studies the ongoing interaction between energy and the environment agreed with that statement, and said with cap and trade or regulatory climate policies in place, “gas will displace coal” and grow as a cleaner alternative. Natural gas is the least carbon intensive of all fuels.

However, the environmental impact isn’t the only reason shale gas is “a game changer,” said David Fleishacker, an expert on energy policy. Shale’s abundance is a major factor in highlighting a switch from coal-based energy to gas-based energy.

“Shale gas is widespread, easy to find, and produced at a rate and cost that is economic,” he said.

To date, 32 of 50 states produce natural gas. Some experts estimate there is a 100-year supply on shale gas at current consumption rates.

And the technology to extract the gas – the combination of hydraulic fracturing and horizontal drilling – is driving the market as well.

“Advancements in technology and innovation have unlocked vast supplied of unconventional gas resources,” said Fisher.

While an energy future that is based on minimal to no reliance on fuel at all, the panelists agreed, shale gas is the best option on the table to help the US get to that point.

“The low carbon economy is further away than we think,” said Fleishacker. “Natural gas is here now and will be an essential element in the bridge to the low carbon future.”

Watch the entire conference:

SOURCE:
Go Marcellus Shale: “MIT Energy Conference 2010 – Unconventional Natural Gas”

From Shell to Total, from BP to Chesapeake and ExxonMobil, nearly every major oil company has been making mergers and acquisitions to become players in the shale gas game.

Coupling the advancement of hydraulic fracturing technology with the seemingly abundant resources in plays like Marcellus, Haynesville and Eagle Ford, shale gas is not only revolutionizing the oil and gas industry in America, but is also making an impact around the world.

Shale gas was cited by Russian gas monopoly Gazprom, for example, as a reason for shutting down one of their major projects in the Shtokman oil fields.

Moreover, the rush to shale gas is a rush towards a more renewable energy source and a more environmentally friendly option, says The Economist.

“The majors’ dash for gas is a bet on demand and climate-change policy,” the article states. “Efforts by the world’s governments to cut carbon emissions have stalled, but the oil majors are voting with their drill bits. The future, they believe, will be less oily and a lot gassier.”

READ THE FULL ARTICLE