By BEN GEMAN AND KATHERINE LING, Greenwire
Published: June 18, 2009
The release of a major new study today that boosts estimates of U.S. natural gas resources is shaking debates over the use and regulation of a fuel that could help slow global warming but could create other environmental concerns.
The report by the Potential Gas Committee, a nonprofit group that provides closely watched analyses of U.S. resources, shows a 35 percent jump in domestic gas estimates.
The United States has a total resource base of 1,836 trillion cubic feet (tcf) worth of likely and potential resources, the report says, a sharp jump from the last estimate two years ago of 1,321 tcf, and the highest in the group's 44-year history.
With the addition of Energy Department estimates of proved reserves, the total U.S. future supply is 2,074 tcf, a rise of more than 35 percent from the committee's last biennial estimate.
The increase is largely due to the viability of tapping gas from shale formations, such as the Barnett in Texas, the Marcellus in Appalachia, the Haynesville in Louisiana and the Rocky Mountains.
"New and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources -- especially 'unconventional' gas -- which, not all that long ago, were considered impractical or uneconomical to pursue," said John Curtis, professor of geology and geological engineering at the Colorado School of Mines, which supports the committee's work.
But the increasing use of a technique called hydraulic fracturing to access these shale plays has sparked a Capitol Hill battle over regulating the extraction method. Several Democrats have introduced legislation that would bring the technique under Safe Drinking Water Act regulation -- reversing an exemption in a 2005 energy law -- and require disclosure of chemicals used in the process.
The industry and allied groups are fighting the effort. They say it would slow access to what the new report demonstrates is an abundant domestic energy source.
"Hydraulic fracturing is the Rosetta Stone of natural gas development. With it, otherwordly amounts of shale and tight-pocket gas can be found, produced and delivered to Americans who need it. Without it, those resources remain trapped underground," said Chris Tucker, a spokesman for Energy In Depth, an industry-backed group that recently launched an effort to fight the legislation.
A spokesman for Rep. Diana DeGette (D-Colo.), the sponsor of the fracturing legislation, said her bill is not about preventing gas production, which she supports, but that the extraction technique must have more oversight and disclosure.
"I would definitely say that she believes it is a necessary technology for the energy market. She also believes we need to ensure the health of the public as these processes are taking place," said DeGette spokesman Kristofer Eisenla.
Report sparks climate debate
Meanwhile, the report is also significant in light of pending congressional efforts to enact a sweeping bill to place mandatory limits on U.S. greenhouse gas emissions.
House Democratic leaders plan to bring a sweeping climate bill to the floor in the coming weeks that is sponsored by Energy and Commerce Chairman Henry Waxman (D-Calif.) and Rep. Ed Markey (D-Mass.). The greenhouse gas caps in the Waxman-Markey bill would curb U.S. emissions by 17 percent by 2020 from 2005 levels, with an 83 percent cut by 2050.
Burning natural gas currently provides about a fifth of U.S. electric power, and gas produces half the greenhouse gas emissions of coal. However, switching to gas creates concerns about the costs that could accompany increased demand if supplies were tight.
Joe Romm of the Center for American Progress, a liberal think tank, has called attention in recent weeks to the higher U.S. supply estimates driven by shale gas plays. He calls increased estimates a "game changer" and very good news.
Romm said the new report underscores that the 2020 emissions reduction targets in the Waxman-Markey bill are certainly achievable and may even be too weak. That is because with ample supply, gas will remain at a moderate price -- around $5 to $6 per million British thermal units -- and will keep compliance costs down, he said.
He noted that a key factor behind the cost of capping carbon is the cost to replace existing coal plants. With cheaper natural gas, that can more easily be done with idle natural gas plants built during a overbuild in the 1990s that are connected to the grid system, but the fuel has been too costly to use until now, said Romm, a former DOE official.
"I think this is a big deal," Romm said of the higher estimates. Additional gas will also encourage more utilities to build wind generation, as natural gas is currently the best backup power for the intermittent energy, he said.
Pickens plan
But others have their eye on these U.S. supplies as a way to power vehicles.
Famed Texas oilman T. Boone Pickens is spending aggressively to promote his plan to transition vehicles such as heavy-duty trucks and city fleets to natural gas in order to curb demands for oil imports. Pickens also supports a major build-out of wind for electricity, which would help free up natural gas for vehicles.
He quickly seized on the new report.
"Obviously, this underscores what Boone has spoken about for well over a year and gives further credibility to a key aspect of the Pickens plan, and that is using natural gas as a transportation fuel alternative to foreign oil, diesel and gasoline," said Jay Rosser, a spokesman for Pickens.
"This should quiet any skeptic who is concerned about using our abundant supplies of natural gas as an important transitional fuel," he added.
Copyright 2009 E&E Publishing. All Rights Reserved.
For more news on energy and the environment, visit www.greenwire.com.
Showing posts with label Natural Gas. Show all posts
Showing posts with label Natural Gas. Show all posts
Friday, June 19, 2009
Sunday, May 24, 2009
CO2 Emission Reductions Target 30% in EU
May 22 (Bloomberg) -- The European Union may have to scale back its goals to reduce global-warming emissions after a less- ambitious plan won initial approval in U.S. Congress.
The 27-nation bloc has asked all industrialized countries to reduce greenhouse gases an average 30 percent over 30 years. The first U.S. legislation ever to cap emissions, which passed a committee vote yesterday, calls for a 5 percent cut by American industry in the period. The gap poses a potential conflict when global talks on a new climate treaty resume June 1 in Bonn.
Lower targets ease costs for coal-burning utilities such as RWE AG of Germany and Ohio-based American Electric Power Co. At the same time, United Nations scientists have said gas output should peak by 2015 or temperatures may rise more than 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, adding to the risk of droughts and flooding from climate change.
“The U.S. bill is clearly an advance on the past,” said James Cameron, vice chairman of the London-based fund manager Climate Change Capital and a former treaty negotiator. Still, “the middle ground of scientific opinion tells us we need to make reductions in a much larger amount over a shorter period.”
The UN-led talks are scheduled to produce a climate- protection agreement by year-end in Copenhagen.
The U.S. is not likely to accept “more aggressive” reduction targets for itself in a treaty that Congress is now considering for domestic regulations, said Ben Feldman, environmental markets executive director at JPMorgan Chase & Co. in New York. The U.S. goals “are unlikely to be sufficient for the EU to move to 30 percent” reductions, Feldman said.
Bridging Gaps
The EU, the largest group of developed countries at the UN negotiating table, will try to bridge gaps with envoys from the U.S. and more than 150 other countries in the June talks that run for 12 days. President Barack Obama has endorsed the bill in Congress led by Democratic Representative Henry Waxman, chairman of the House Energy and Commerce Committee. The panel approved the measure by a 33-25 vote.
The EU defended its more ambitious goals, saying it hasn’t lost hope for reconciling U.S. and European stances.
“The U.S. position is evolving,” said Barbara Helfferich, environment spokeswoman at the European Commission, the EU’s executive arm in Brussels. “We hope to see an improvement in the targets that have been put forward by industrialized countries generally so that the 30 percent goal can be reached.”
Strategy Split?
A split now among wealthy nations will threaten their strategy to present a united front to emerging economies including China, the world’s biggest producer of greenhouse gases. China has been pushed by the EU and the U.S. to join in adopting limits in heat-trapping emissions.
The EU is on course to slash gas output 20 percent by 2020 from 1990 and aims to deepen the cut to 30 percent over the period, provided other wealthy nations make comparable efforts.
The bloc isn’t alone in making conditional promises. Australia has pledged a 5 percent to 15 percent cut in 2020 from 2000 levels and Prime Minister Kevin Rudd said May 4 that his country is prepared to reduce it by 25 percent provided other nations agree to an “ambitious global deal.”
The draft U.S. law would trim discharges 17 percent in 2020 from 2005. That’s a 5 percent drop from the internationally accepted base year of 1990, according to EU calculations.
“It doesn’t look very promising what’s coming out of the U.S.,” said Christian Egenhofer, head of the energy and climate program at the Centre for European Policy Studies in Brussels. “I don’t see how the EU can go to 30 percent” in negotiations.
Cap-and-Trade
The cuts Congress approves will form the foundation for U.S. proposals at international talks. The legislation would enforce new limits through a cap-and-trade system similar to the European program, which began in 2005 and is the world’s biggest greenhouse-gas market.
Cap-and-trade requires companies that exceed their emission quotas to buy spare permits from businesses that emit less. The EU program covers companies from RWE, the biggest greenhouse-gas producer in Europe, to steelmaker ArcelorMittal of Luxembourg.
The U.S. plan targets such businesses as Chevron Corp., General Electric Co., Caterpillar Inc. and American Electric, the largest U.S. power generator from coal.
Europe accounts for about 14 percent of global emissions. It needs help from China and the U.S., the second-biggest emitter, to prevent irreversible environmental damage from climate change, scientists say.
One possible compromise is for the U.S. to give more aid to poor countries to fight global warming in return for a weaker American emissions-reduction goal. Developing nations may need as much as 54 billion euros ($75 billion) a year by 2030 to adapt to climate change, UN projections cited by the EU show.
‘Big Climate Check’
“The less of a reduction you make, the bigger the climate check you write,” said Sanjeev Kumar, a Brussels-based emissions-policy analyst at the environmental group WWF. “That’s where the politics are going.”
In return for aid, poorer countries should commit to limiting emissions growth in 2020 to 15 percent to 30 percent below “business as usual,” the EU proposes.
“Let’s see some leadership from industrialized countries and let’s see some clarity on stable and predictable financial support for developing countries,” said Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, which is guiding the negotiations. “Then we can talk about what developing countries are able to do.”
The U.S. refused to ratify the 1997 Kyoto Protocol, whose limits expire in 2012. Senators said it gave an advantage to factories in China and elsewhere by sparing those businesses from pollution controls. Obama reversed eight years of U.S. opposition to emissions curbs under former President George W. Bush and has pledged action to fight climate change.
Recession Effect
The recession makes it harder for Obama to seek a stricter cap in the draft law. Republican Representative Mike Pence of Indiana called the plan, which also needs the Senate’s support, “an economic declaration of war on the Midwest,” which relies more than coastal states on power from burning emissions- intensive coal.
“Nobody wants a repeat of Kyoto,” said Jake Schmidt, the Washington-based international climate policy director at the Natural Resources Defense Council. “They don’t want the U.S. to come in and commit to something it can’t deliver at home.”
In addition to the June session, other rounds of talks are scheduled for September and November.
“I’m confident the numbers will be improved on by December,” the UN’s de Boer said.
To contact the reporters on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.netAlex Morales in London at amorales2@bloomberg.net
Last Updated: May 22, 2009 10:33 EDT
The 27-nation bloc has asked all industrialized countries to reduce greenhouse gases an average 30 percent over 30 years. The first U.S. legislation ever to cap emissions, which passed a committee vote yesterday, calls for a 5 percent cut by American industry in the period. The gap poses a potential conflict when global talks on a new climate treaty resume June 1 in Bonn.
Lower targets ease costs for coal-burning utilities such as RWE AG of Germany and Ohio-based American Electric Power Co. At the same time, United Nations scientists have said gas output should peak by 2015 or temperatures may rise more than 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, adding to the risk of droughts and flooding from climate change.
“The U.S. bill is clearly an advance on the past,” said James Cameron, vice chairman of the London-based fund manager Climate Change Capital and a former treaty negotiator. Still, “the middle ground of scientific opinion tells us we need to make reductions in a much larger amount over a shorter period.”
The UN-led talks are scheduled to produce a climate- protection agreement by year-end in Copenhagen.
The U.S. is not likely to accept “more aggressive” reduction targets for itself in a treaty that Congress is now considering for domestic regulations, said Ben Feldman, environmental markets executive director at JPMorgan Chase & Co. in New York. The U.S. goals “are unlikely to be sufficient for the EU to move to 30 percent” reductions, Feldman said.
Bridging Gaps
The EU, the largest group of developed countries at the UN negotiating table, will try to bridge gaps with envoys from the U.S. and more than 150 other countries in the June talks that run for 12 days. President Barack Obama has endorsed the bill in Congress led by Democratic Representative Henry Waxman, chairman of the House Energy and Commerce Committee. The panel approved the measure by a 33-25 vote.
The EU defended its more ambitious goals, saying it hasn’t lost hope for reconciling U.S. and European stances.
“The U.S. position is evolving,” said Barbara Helfferich, environment spokeswoman at the European Commission, the EU’s executive arm in Brussels. “We hope to see an improvement in the targets that have been put forward by industrialized countries generally so that the 30 percent goal can be reached.”
Strategy Split?
A split now among wealthy nations will threaten their strategy to present a united front to emerging economies including China, the world’s biggest producer of greenhouse gases. China has been pushed by the EU and the U.S. to join in adopting limits in heat-trapping emissions.
The EU is on course to slash gas output 20 percent by 2020 from 1990 and aims to deepen the cut to 30 percent over the period, provided other wealthy nations make comparable efforts.
The bloc isn’t alone in making conditional promises. Australia has pledged a 5 percent to 15 percent cut in 2020 from 2000 levels and Prime Minister Kevin Rudd said May 4 that his country is prepared to reduce it by 25 percent provided other nations agree to an “ambitious global deal.”
The draft U.S. law would trim discharges 17 percent in 2020 from 2005. That’s a 5 percent drop from the internationally accepted base year of 1990, according to EU calculations.
“It doesn’t look very promising what’s coming out of the U.S.,” said Christian Egenhofer, head of the energy and climate program at the Centre for European Policy Studies in Brussels. “I don’t see how the EU can go to 30 percent” in negotiations.
Cap-and-Trade
The cuts Congress approves will form the foundation for U.S. proposals at international talks. The legislation would enforce new limits through a cap-and-trade system similar to the European program, which began in 2005 and is the world’s biggest greenhouse-gas market.
Cap-and-trade requires companies that exceed their emission quotas to buy spare permits from businesses that emit less. The EU program covers companies from RWE, the biggest greenhouse-gas producer in Europe, to steelmaker ArcelorMittal of Luxembourg.
The U.S. plan targets such businesses as Chevron Corp., General Electric Co., Caterpillar Inc. and American Electric, the largest U.S. power generator from coal.
Europe accounts for about 14 percent of global emissions. It needs help from China and the U.S., the second-biggest emitter, to prevent irreversible environmental damage from climate change, scientists say.
One possible compromise is for the U.S. to give more aid to poor countries to fight global warming in return for a weaker American emissions-reduction goal. Developing nations may need as much as 54 billion euros ($75 billion) a year by 2030 to adapt to climate change, UN projections cited by the EU show.
‘Big Climate Check’
“The less of a reduction you make, the bigger the climate check you write,” said Sanjeev Kumar, a Brussels-based emissions-policy analyst at the environmental group WWF. “That’s where the politics are going.”
In return for aid, poorer countries should commit to limiting emissions growth in 2020 to 15 percent to 30 percent below “business as usual,” the EU proposes.
“Let’s see some leadership from industrialized countries and let’s see some clarity on stable and predictable financial support for developing countries,” said Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, which is guiding the negotiations. “Then we can talk about what developing countries are able to do.”
The U.S. refused to ratify the 1997 Kyoto Protocol, whose limits expire in 2012. Senators said it gave an advantage to factories in China and elsewhere by sparing those businesses from pollution controls. Obama reversed eight years of U.S. opposition to emissions curbs under former President George W. Bush and has pledged action to fight climate change.
Recession Effect
The recession makes it harder for Obama to seek a stricter cap in the draft law. Republican Representative Mike Pence of Indiana called the plan, which also needs the Senate’s support, “an economic declaration of war on the Midwest,” which relies more than coastal states on power from burning emissions- intensive coal.
“Nobody wants a repeat of Kyoto,” said Jake Schmidt, the Washington-based international climate policy director at the Natural Resources Defense Council. “They don’t want the U.S. to come in and commit to something it can’t deliver at home.”
In addition to the June session, other rounds of talks are scheduled for September and November.
“I’m confident the numbers will be improved on by December,” the UN’s de Boer said.
To contact the reporters on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.netAlex Morales in London at amorales2@bloomberg.net
Last Updated: May 22, 2009 10:33 EDT
Wednesday, March 4, 2009
Natural Gas Summary for Week Ending February 24
Submitted by The City Wire staff on Mon, 03/02/2009 - 9:41am.
The monthly “Natural Gas Market Indicators” report from the American Gas Association provides some glimpse into the factors behind the thousands of jobs in Arkansas and the Fort Smith region tied to the exploration, production, transmission and management of natural gas.
Natural gas prices at the closely watched Henry Hub — a connecting point of 13 pipelines in south-central Louisiana — fell below $4.25 mmBtu, according to the AGA February 25 report.
The price reflects a downward trend that is causing financial pain for exploration and production companies — including some of those active in Arkansas’ Fayetteville Shale Play — that made investment and exploration decisions based on a higher price.
Falling natural gas demand in the nation’s manufacturing sector, moderate weather and large amounts of gas in underground storage have caused the price decline, AGA noted in the report. Unfortunately, the AGA notes that most futures contracts have natural gas priced below $6 per mmBtu.
Other key metrics of the AGA report include:
• Working Gas in Underground Storage
Net storage withdrawals for the week ending Feb. 13, were only 24 Bcf (billion cubic feet), which is significantly less than the 172 Bcf withdrawn at this time last year. At 1,996 Bcf, working gas remaining in underground storage has jumped to 9.7% above the volume one year ago and 8.4% higher than the five-year average.
• Natural Gas Production
After averaging 55.6 Bcf per day for the 10-day period Feb. 15-24, natural gas production prior to extraction losses is down about 1 Bcf per day compared to the
first two weeks of the month. However, average daily production prior to extraction losses for February 2009 (56.2 Bcf per day) is 5% higher than in February 2008 (53.7 Bcf per day).
• Rig Counts
Total national rig counts for the week ending Feb. 20, stood at 1,300, having tumbled 36% from 2,031 rigs in late summer 2008. At 1,018, gas-directed operations are down 29% from one-year earlier. However, rigs operating today described as drilling horizontal wells (like many of those in the Fayetteville Shale Play), which tend to be newer and more efficient drilling systems, numbered 475 on Feb. 20. One year ago that number was 464. This also tends to support the notion that operations in less conventional reservoirs remain relatively solid.
The monthly “Natural Gas Market Indicators” report from the American Gas Association provides some glimpse into the factors behind the thousands of jobs in Arkansas and the Fort Smith region tied to the exploration, production, transmission and management of natural gas.
Natural gas prices at the closely watched Henry Hub — a connecting point of 13 pipelines in south-central Louisiana — fell below $4.25 mmBtu, according to the AGA February 25 report.
The price reflects a downward trend that is causing financial pain for exploration and production companies — including some of those active in Arkansas’ Fayetteville Shale Play — that made investment and exploration decisions based on a higher price.
Falling natural gas demand in the nation’s manufacturing sector, moderate weather and large amounts of gas in underground storage have caused the price decline, AGA noted in the report. Unfortunately, the AGA notes that most futures contracts have natural gas priced below $6 per mmBtu.
Other key metrics of the AGA report include:
• Working Gas in Underground Storage
Net storage withdrawals for the week ending Feb. 13, were only 24 Bcf (billion cubic feet), which is significantly less than the 172 Bcf withdrawn at this time last year. At 1,996 Bcf, working gas remaining in underground storage has jumped to 9.7% above the volume one year ago and 8.4% higher than the five-year average.
• Natural Gas Production
After averaging 55.6 Bcf per day for the 10-day period Feb. 15-24, natural gas production prior to extraction losses is down about 1 Bcf per day compared to the
first two weeks of the month. However, average daily production prior to extraction losses for February 2009 (56.2 Bcf per day) is 5% higher than in February 2008 (53.7 Bcf per day).
• Rig Counts
Total national rig counts for the week ending Feb. 20, stood at 1,300, having tumbled 36% from 2,031 rigs in late summer 2008. At 1,018, gas-directed operations are down 29% from one-year earlier. However, rigs operating today described as drilling horizontal wells (like many of those in the Fayetteville Shale Play), which tend to be newer and more efficient drilling systems, numbered 475 on Feb. 20. One year ago that number was 464. This also tends to support the notion that operations in less conventional reservoirs remain relatively solid.
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