Re: [asa] vast new gas supplies

From: David Clounch <david.clounch@gmail.com>
Date: Sat Dec 05 2009 - 17:20:42 EST

Don,

I have a question. If we consider peak oil, peak nuclear, peak gas, and
peak coal, what are the projected dates for each of these?

I am assuming peak nuclear is a function of available uranium ore. So
unless we have a robust breeder reactor program, there will be a peak.

Thanks,
Dave C

On Sun, Dec 6, 2009 at 5:37 AM, Don Winterstein <dfwinterstein@msn.com>wrote:

> I've finally been able to speak with someone who's directly involved with
> gas production from shales. He's not a "recognized authority" on the
> subject, but previous interactions have taught me he keeps closely in touch
> with industry trends, and his assessments are generally reliable. So I'll
> share.
>
> First, big oil is getting involved in this play (contrary
> to my speculations below). He tells me Exxon is pursuing rights in Germany,
> and Chevron is trying to get up to speed in the US. But small companies
> were indeed the ones that got the ball rolling.
>
> Second, with gas prices as high as they were initially, wells were
> productive enough that companies were able to cover their costs and start
> profiting after only a year. However, they were victims of their own
> success: The abundance of the gas they produced caused prices to plummet,
> so the wells are no longer so profitable. But the (energy out)/(energy in)
> ratio promises to be considerably greater than 1.0 for most wells.
>
> Longer term this shale gas production should have major environmental
> benefits. As the Business Week article pointed out, some power generation
> in the US has already switched from coal to gas because of the new abundance
> and low prices. My contact thinks the major environmental benefits will
> come in China, where some proposed coal power plants may now be able to
> switch over to gas.
>
> In context of the energy catastrophy that Glenn Morton and others have
> predicted will follow peak oil, the ability to produce abundant gas from
> shale should go a long way towards letting economies down softly rather than
> catastrophically.
>
> Don
>
>
>
> ----- Original Message -----
> *From:* Don Winterstein <dfwinterstein@msn.com>
> *To:* John Burgeson (ASA member) <hossradbourne@gmail.com>
> *Cc:* asa <asa@calvin.edu>
> *Sent:* Wednesday, November 18, 2009 11:57 PM
> *Subject:* Re: [asa] vast new gas supplies
>
> Speaking on the basis of my industry experience (but otherwise out of
> ignorance), I believe big oil will steer clear of these shale plays, because
> their overhead is too high for the high level of hassle and relatively small
> production likely from individual shale wells. I visualize many small
> companies drilling thousands of wells primarily to feed local utilities.
> How much they can produce and how fast will depend strongly on (among
> several other things) the number of wells drilled. That number in
> principle can be very large for this kind of play.
>
> Since government presumably is not subsidizing this production (as it
> subsidizes ethanol from corn, for example), the fact that companies are
> pursuing this play is good circumstantial evidence that returns exceed
> costs, where costs include, besides energy input, company overhead, land
> leasing, royalties, taxes and no doubt several other things. There's also
> possible benefit from turning one kind of energy into a more useful kind.
>
> An important facet of gas from shale is that it opens the possibility that
> many areas of the country formerly without hydrocarbon production may now be
> able to get their energy from local wells.
>
> Don
>
>
> ----- Original Message -----
> *From:* John Burgeson (ASA member) <hossradbourne@gmail.com>
> *To:* Don Winterstein <dfwinterstein@msn.com>
> *Cc:* asa <asa@calvin.edu>
> *Sent:* Wednesday, November 18, 2009 9:56 AM
> *Subject:* Re: [asa] vast new gas supplies
>
> Glenn and I (and others) have had some dialog on this, although not
> recently.
>
> The gut issues are twofold:
>
> 1. How fast can these supplies be drawn? Analogy -- if you have
> $10,000,000 in the bank, but can only withdraw $10 a day, you are not
> "rich."
>
> 2. How much energy does it take to extract gas energy? If it takes 1.1
> BTU of energy to extract 1.0 BTU, that is not a good deal.
>
> I don't pretend to have the answers to this -- just pointing out two
> of the questions that must be asked.
>
> On 11/18/09, Don Winterstein <dfwinterstein@msn.com> wrote:
> > The Colorado School of Mines report is at
> >
> http://www.mines.edu/Potential-Gas-Committee-reports-unprecedented-increase-in-magnitude-of-U.S.-natural-gas-resource-base<http://www.mines.edu/Potential-Gas-Committee-reports-unprecedented-increase-in-magnitude-of-U.S.-natural-gas-resource-base<http://www.mines.edu/Potential-Gas-Committee-reports-unprecedented-increase-in-magnitude-of-U.S.-natural-gas-resource-base%3Chttp://www.mines.edu/Potential-Gas-Committee-reports-unprecedented-increase-in-magnitude-of-U.S.-natural-gas-resource-base>
> >.
> > This report tells me (between the lines) that some of these huge claimed
> > reserves are somewhat more speculative--read "possibly impractical or
> > inaccessible"--than I thought.
> >
> > Don
> >
> > ----- Original Message -----
> > From: Don Winterstein<mailto:dfwinterstein@msn.com<dfwinterstein@msn.com>
> >
> > To: asa<mailto:asa@calvin.edu <asa@calvin.edu>>
> > Sent: Tuesday, November 17, 2009 9:37 PM
> > Subject: [asa] vast new gas supplies
> >
> >
> > New applications of old technology have dramatically raised estimates
> of
> > producible US gas supplies. According to Business Week (10/19/09), a
> > Colorado School of Mines report claims US reserves may be as high as 1800
> > TCF (trillion cubic feet), equivalent to 320 billion barrels of oil, or
> more
> > than Saudi Arabia's known reserves. Most of this amount at this point
> > exists only as speculation, but the reality is that known producible
> > reserves have gone up 39% in the past two years--as the price of gas has
> > plummeted.
> >
> > Oil companies have known for decades that huge quantities of methane
> > existed in US sedimentary rock, and they've tried mostly in vain to
> produce
> > it economically. Much of the earlier effort attempted to extract gas
> from
> > tight (relatively impermeable) sandstones. The new reserves instead are
> in
> > shale, a kind of rock seldom thought to make good reservoirs. Production
> > involves a combination of two old technologies, drilling wells
> horizontally
> > and then hydraulically fracturing the rock. Hydraulic fracturing
> involves
> > pumping fluids and proppants into wells at high enough pressures to crack
> > the rock in situ. The proppants, which are hard particles carried into
> > formations by the fluids, get wedged in cracks and hold them open to give
> a
> > lasting increase in permeability.
> >
> > Use of this technology is not limited to the US but should be
> applicable
> > to many shales worldwide. Shale is the most common kind of sedimentary
> > rock, and much of it is known to contain methane.
> >
> > Don
> >
> >
>
>
> --
> Burgy
>
> www.burgy.50megs.com
>
>

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Received on Sat Dec 5 17:21:08 2009

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