To answer this, three analyses are performed: First, type-curve production and economic modeling for each of the 12 largest US shale gas plays are used to estimate the breakeven price for profitable extraction of shale gas. Second, the impact of liquefied natural gas LNG exports on the domestic price of natural gas is analyzed. Third, current financial data from 8, US power plants are analyzed to model the cost competitiveness of various energy sources. Also analyzed is the potential for shale gas to contribute to a global low-carbon future, focusing on China.
Develop and improve products. List of Partners vendors. Hydraulic fracturing , also called fracking, is an important technological advance for the oil and gas industry.
In addition to opening up a staggering amount of natural gas for production, fracking allows extraction companies to recover what is called tight oil from deposits that were unworkable just a few decades ago. However, the new technology has also introduced new costs to the oil extraction process. In this article, we will discuss the expense of extracting conventional crude oil versus extracting oil using fracking technology.
Conventional production establishes the basic costs of drilling a well. You need a rig, drill stem, casing, the crew, and all the other pieces that go into a vertical well. The difference with shale oil is that, instead of drilling just past the target deposit, the wells will take a degree turn in the deposit and run alongside it horizontally.
These wells go thousands of feet down to reach the deposit, but they also run thousands of feet horizontally. This type of well takes more time to drill, which means higher labor costs and more basic inputs like drill stem. Once the well is drilled and perforated, millions of gallons of water, proppants materials, like sand, introduced to keep the fracture open , and chemicals are pumped down the hole to fracture the formation and allow the oil to flow back into the pipe to be pumped out.
Millions of gallons mean a lot of hauling, with either added capital and labor costs for the trucks or, more likely, an oil service firm contract for the fluid hauling.
All of this adds to the cost of the well. Some new shale oil wells in the U. With these costs paid upfront for a comparatively short production life compared to a conventional well, it makes sense for the shale oil industry to suspend new wells when world oil prices dip and ramp up when the prices are strong.
Shale oil drilling and extraction are far more labor-intensive than conventional oil extraction, making the process necessarily pricier. Conventional oil production generally refers to the pipe and pump production off a vertical well. This means a hole has been drilled straight down into a deposit and a pump jack is put on it to help pull the deposit to the surface where it can be sent on for further refining. For example, offshore drilling can be viewed as pipe and pump production, just with the small matter of an ocean between the drilling rig and the first layer of rock.
But the company has never been one to run from a challenging situation especially when it believes there is a strong economic and environmental case. Some of it comes from Norway, which is probably all right, but a lot of it comes from Siberia which has not been the most secure form of supply over the years.
Gas is also a vital raw material used to make thousands of essential products that we all rely on each day. Without it, there would be no plastic, medicines, buildings, cars, computers, clothes, or iPad screens. We will still need gas to make things even when we have switched to a low-carbon energy. We are happy to be challenged if people think we are wrong.
Understandably, they just want more information. And that is what we hope to provide at these meetings. In addition to its expertise above ground, handling flammable gases across its 65 manufacturing sites all over the world, the company also has expertise below ground.
INEOS also employs the team who pioneered the development of shale gas in the US with more than 20 years of industry experience. Chairman Jim Ratcliffe said he could not understand why it was still so hard to convince people that shale gas extraction was safe. Faulty well construction led to water contamination and waste water from fracked oil wells was left in open, unlined pits. Some US companies had used only one layer of steel in the well. INEOS will be using up to four layers of steel cemented one inside the other.
Other companies had reused old wells. INEOS will use only new wells. The waste water was left in open ponds. Extracting shale gas is not risk free and has to be done carefully, but the risks are manageable and comparable to other practices. But the people driving its new energy business are not new to fracking. On or off shore. Off shore, they have acquired a team who has been drilling and fracking safely for natural gas for years.
All are confident that INEOS — with its expertise above ground, handling flammable gases across its 65 manufacturing sites — can become the first company in the UK to safely extract the vast reserves of shale gas currently trapped in rocks thousands of feet underground — and, in doing so, change public perception.
They are both natural gas. The only difference is the North Sea gas is extracted from sandstone situated around 3km almost 2 miles under the seabed and on shore INEOS would be extracting it from shale up to 5km 3 miles underground. Doug and his team had — up until October — been working for DEA. That changed when INEOS bought the German firm for several hundred million dollars, and, with it, the responsibility for ensuring the supply of gas for 1 in 10 homes across the UK.
Where others saw troubled waters — brought on by rising costs and plummeting profits — INEOS saw a huge wave of opportunity. That opportunity to acquire an immense amount of expertise — while improving the life and efficiency of these platforms without compromising on safety — was too good to miss. The time you spend to get everything right pays dividends during the operational phase.
Doug said safe and efficient operations relied on team competency and effective communication between those operating the rig, the frack vessel and the platform. At INEOS Breagh they fitted essentially a filter in the well to stop the proppant primarily the sand from reaching the surface during gas production. It meant the fracked well could be put on line 12 months ahead of an alternative technical solution being found. Since the acquisition, he has been working on a robust plan to improve the efficiency of the business, especially in light of falling oil and gas prices.
He had dreamed of that moment for eight years after listening to a talk as a year-old Scout. In a sense, his work was now done and he had no desire to climb it again. I can relive any part of the climb any time I close my eyes. After an hour-long meeting Rhys walked out of the door with the money he needed to complete the expedition in his pocket — and an INEOS flag to plant on the summit. But he sensed something was missing. He started giving regular talks at dinners and events and working with schools.
But I was able to make things happen because I had the right approach. He is now back in the UK and heading up new venture Monix Adventures, which specialises in guiding people to some of the most difficultto- reach places on earth. And for those seeking such thrills, his experience is invaluable. But we all face challenges in our lives. When things are tough, I remind myself that nothing last forever, no matter how steep, how complicated, or how difficult it appears.
ENERGY strategy in Britain has three big goals; keeping the lights on, keeping the bills down, and moving to a clean energy future.
It will take time as we start to move to more renewable and low carbon energy sources. This is especially true for the 1. Like new coal and new nuclear power, investment in unconventional gas is a serious distraction from badly-needed investment in renewable energy. There has been some research from the US which indicates that extracting shale gas via fracking could have a bigger total greenhouse gas footprint than coal. Apart from the climate impacts, gas extraction is the source of serious environmental and social conflicts around the world.
Development of gas pipelines and infrastructure drive land grabbing and we believe threatens water resources and biodiversity in many places. Furthermore, we believe there are significant risks of water contamination and air pollution from fracking.
Friends of the Earth International IT is incontrovertible that in the long-term we must move to as low carbon as practicable technologies but the tools for this carbon capture and storage and renewable energy technologies are not currently ready to satisfy global energy demand and poverty alleviation needs and some may never be economical or implementable.
Shale gas has the potential, if managed and regulated with diligence and authority, to provide some of the necessary reduction in CO2 while delivering energy to a rapidly growing but carbon-constrained world. The most satisfactory single alternative would be hydrogen fusion but that quasi-miracle may be beyond our capability. We may discover that wind, solar, biomass, etc. Essential to any and all success is the realisation on our part that we may be able to do anything, which includes fail.
Alfred W. These renewables are growing, but from a very small base, and only with billions of dollars of taxpayer subsidies. Wind and solar have other issues: the wind does not always blow nor the sun shine. So, renewables need backup energy, mostly from natural gas. This American form of problem-solving has produced a market-competitive solution to help us turn the corner on energy costs and emissions which are now at their lowest level for 27 years.
No other country has been able to replicate this American success story. Of course, many renewable energy advocates would like to see us abandon market principles altogether. But if we do, we not only drive up energy prices, but slow the pace of innovation. In December we published our final recommendations. The views expressed in this article are those of the author alone and not the World Economic Forum.
Corporations are aiming for net zero by , but the reality is that the next decade will be decisive for the climate. Here's what investors should expect. Beyond the immediate and visible damage caused to sea life, oil spills continue to affect marine life and the environment for years.
I accept. Industry Agenda Oil and Gas How has shale oil affected the global oil price? Take action on UpLink. Explore context. Explore the latest strategic trends, research and analysis. Uncertainty about the US shale oil boom To gauge the importance of shale oil for the US economy it is useful to bear in mind that, as of March , shale oil accounted for almost half of US oil production, but only about a quarter of the total quantity of oil used by the US economy.
One concern is that increases in shale oil production are not permanent. A second concern is that estimates of the stock of shale oil that can be recovered using current technology are subject to considerable error. A third concern is that it is not known how vulnerable the shale oil industry is to downside oil price risk.
Imperfect substitutability between different types of crude oil Even more importantly, the shale oil debate has largely ignored the fact that shale oil is not a perfect substitute for conventional crude oil, making comparisons across countries difficult. Figure 1. The beneficiaries of the US shale oil boom Thus, the main beneficiary of the US shale oil revolution has been not gasoline consumers or, for that matter, domestic shale oil producers, but the US refining industry, which enjoys a competitive advantage compared to diesel and gasoline producers abroad because of its access to low-cost crude oil.
The lack of impact on the global price of oil It may seem that the rapid decline in the global price of oil after mid may be attributable to sharp increases in US shale oil production, providing direct evidence of the impact of the US shale oil revolution on oil prices after all.
License and Republishing. Written by. More on Oil and Gas View all. Forget , investors should demand action now on oil and gas Corporations are aiming for net zero by , but the reality is that the next decade will be decisive for the climate.
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