Everything You Need to Know About Shale Gas
Business Insider -- "There has been a surge in domestic energy production in 2011, and a large part of it has been attributed to the shale boom. In fact, the U.S. has twice as much natural gas as Saudi Arabia has oil. Shale gas is touted as a cleaner form of energy, and with its contribution to the economy, those in favor of recovering these resources argue that it would cut American and global dependence on OPEC.
Yet 'fracking,' a crucial part of shale gas extraction, is considered dangerous and many fear its impact on the environment. In the EU, member states are diverging significantly in national policy responses to shale gas regulation.
Where does shale come from? How can you cash-in on the shale boom? Why is fracking so controversial? A report from the U.K. think tank The Global Warming Policy Foundation, authored by Matt Ridley gives us a quick breakdown of everything you need to know about the shale gas market, check it out here."
HT: Lee Coppock via Craig Newmark
7 Comments:
Uhhh .... The shale gas revolution DID NOT start with the Marcellus shale in the 80's. It started with the Barnett shale in the late 90's. Driling in the Marcellus shale has only been around for 3-4 years.
As soon as I saw that I ceased reading the article.
Low gas prices contributed to cancellation of a large iberdrola wind farm in north Carolina.
"The shale gas revolution DID NOT start with the Marcellus shale in the 80's"...
Interesting...
The following is from a site calling itself the American Association of Petroleum Geologists: Shale gas production is certainly nothing new in the United States. In fact, the first commercial gas shale well was drilled in New York in the late 1820s – nearly 40 years before Colonel Drake drilled his famous oil well in Pennsylvania...
Thank you to Juandos for his excellent find on Shale Gas drilling in the 1820s.
I did a little more exploration on the subject to follow-up. Colgate University has produced A Primer on New York's Gas Shales.
From page A-5:
"The first know commercial shale gas well was drilled in 1821 in the town of Fredonia, Chatauqua
County, New York near a gas seep along Canadaway Creek (de Witt 1997). The well, drilled by William Aaron
Hart, was completed as a gas producer in the shallow Dunkirk shale. The well was connected to pipeline and
provided natural gas to Fredonia’s main street businesses and street lamps in the 1820’s. Following Hart’s success, the development and use of shale gas proliferated along the south shore of Lake Erie, eventually spreading southward into Pennsylvania, Ohio, Indiana, and Kentucky. By the turn of the century hundreds if not
thousands of wells had been drilled along the lake shore and in the basin, and were producing shale gas for domestic and small commercial use."
The thing that you have to know is that shale gas production is not economic anywhere near the current levels. This means that the best of the core areas are being exploited at a time when the market price cannot cover the cost. As these areas are depleted the costs will rise and the market price will need to move much higher to make shale profitable. It's a bubble folks. Just like the other bubbles you were sold by the same mountebanks who are hyping shale now.
I'd be careful about over-using the phrase "bubble".
I'm much more concerned that tax breaks and subsidies are involved. Any time a business needs either, I wonder how viable they really are.
That being said, I certainly welcome legitimate efforts to develop domestic energy sources.
I'm much more concerned that tax breaks and subsidies are involved. Any time a business needs either, I wonder how viable they really are.
The shale gas producers do not get much in the way of subsidies or tax breaks. They are chewing through capital not because the government gives them money directly but because they can get financing thanks to the easy money policies of the Fed.
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