Energy Wars: Fracking Our Way Ahead

America's not so secret new weapon, discussed again at The American Interest "Shale Boom Has America Sitting Pretty"

By lessening our dependence on foreign sources of oil and gas, the shale boom has given us more options abroad, and in some cases . . . has given America more clout in diplomatic standoffs.

Almost all of this "shale boom" has occurred, by the way, by private companies working their "magic" on private property - in many cases with local or regional opposition to this development.

Interesting look at the U.S. development of its resources from Aljazeera "American power and the fracking boom: What impact will America's oil and gas boom from fracking have on US power and global geopolitics?":

Fracking is giving rise to a new energy abundance in the United States that has major implications for American policy in the Middle East and the debate over climate change. Over the past five years, daily oil production in the US increased 3.7 million barrels, while US net imports of oil dropped 44 percent. A revolutionary technique to tap into oil and gas reserves by drilling horizontally into underground shale formations and using liquids pumped at high pressure to open cracks in the rock, fracking is reshaping the contours of American power.
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For the past 35 years, securing access to Persian Gulf oil and protecting the shipping lanes to keep it flowing has been a central tenet of American military policy. It is known as the Carter doctrine because President Jimmy Carter first enunciated the commitment in his 1980 State of the Union address.

Historian and author Andrew Bacevich hopes that the shale oil and gas boom from fracking will cause a strategic rethinking of the Carter Doctrine in the United States. "What the new energy regime could do would be to make it clear that the United States does have choices and one of those choices will be to lower our profile in the Middle East more broadly and in the Persian Gulf specifically," he says.
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According to Jeppe Kofod, a member of the European Parliament and representative from Denmark to the NATO Parliamentary Assembly, about one-third of US military spending, or about $200bn a year, can be linked to efforts to keep oil flowing.
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. . . President Barack Obama and administration officials emphasise that the US commitment to safeguarding access to Middle Eastern oil will remain strong despite America’s shrinking reliance on imports from the region. In a speech at the United Nations last year, Obama said that the US is prepared to use military force, “to ensure the free flow of energy from the region to the world. Although America is steadily reducing our own dependence on imported oil, the world still depends on the region's energy supply."
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Anti-fracking activists are trying to prevent the construction of terminals and pipelines needed to transport and export natural gas and oil. Robbie Cross, a member of a local group trying to stop fracking in Pennsylvania, is clear about the rationale. "After you frack it has got to go somewhere," he says. "If we don’t have ways of moving it, selling it, distributing it, it’s not going to work."
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Richardson and other proponents of shale exports argue that they can be used as effective instruments of American power to counter the Russians in Europe. The Continent relies on Russia for 30 percent of its gas supplies, and half transits via the Ukraine. Some countries like Hungary, Poland and the Czech Republic get 70 to 100 percent of their gas from Russia. Hungary’s ambassador–at-large for energy security, Anita Orbán, argues that American exports of natural gas to Europe can help diversify supplies and undermine Russia’s energy leverage there even if the flow does not begin for a few years. (emphasis added)

The impact of fracking on China is discussed in the country that uses the greatest percentage of coal in the world, China, in this Atlantic article, America's Fracking Boom Comes to China: Deep inside Beijing's campaign to wean the country off coal .

What the EIA says:

Most of China's proven shale gas resources reside in the Sichuan and Tarim basins in the southern and western regions and in the northern and northeastern basins. EIA estimates from its most recent report on shale oil and gas resources that China's technically recoverable shale gas reserves are 1,115 Tcf, the largest shale gas reserves in the world.
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China's NOCs are in discussion with several IOCs for partnering on potential shale gas projects in order to gain necessary technical skills and investment for developing these geologically challenging resources. CNPC and Shell signed the first PSC for the Fushun-Yonghchuan block of shale gas in the Sichuan Basin in March 2012. Shell also has partnered with Sinopec and CNOOC on two other shale gas plays. After investing $950 million between 2011 and 2013 on shale gas exploration in China, Shell plans to spend another $1 billion each year for the next five years to develop these resources. Sinopec is working with Chevron and ConocoPhillips to explore shale gas resources in the Qiannan and Sichuan basins, respectively. On the reverse side, Chinese NOCs have been actively investing in shale oil and gas plays in North America to gain technical expertise in this arena. (NOC=National Oil Company, IOC= International Oil Company)

It's interesting that people who have previously argued that we should not fight "wars for oil" in our own national interest are willing (1) to commit our national forces and dollars to possibly fighting "wars for oil" for the interests of other countries and (2) that people who who are opposed to U.S. fracking on environmental grounds seem to be totally okay with the status quo of pushing environmental damage off to those second and third world countries who are resource rich but not in the protesters back yards - and condemning others in the world to be dependent on the whims of leaders in Russia and other undemocratic countries.

Given the huge amount of pollution created by the use of coal by China (about 50% of the world's use) - see China's coal emissions responsible for 'quarter of a million premature deaths', it is to the benefit of the entire world that China be given all the assistance it needs to wean itself from coal and to develop its access to those much cleaner burning natural gas reservoirs.

It also behooves Europe and Japan that the U.S., Canada and Mexico develop LNG export facilities to allow the export of natural gas to offset the Russian and Iranian power in using the "oil and gas weapon" against Europe.

The U.S. government should be encouraging U.S. companies to help Poland to explore its shale gas reserves as an offset to the Russians. While the estimated levels of Polish shale gas are fluctuating, there is gas there and it is both Polish and European interests to develop it.

It's not just the U.S. that has the potential to be "sitting pretty" as a result of the the shale boom.

Death to the Great Green Fleet: "Natural Gas Supply Puts Damper On Renewable Energy"

Aviation Week writes "Natural Gas Supply Puts Damper On Renewable Energy":

Projections that the U.S. will become all but self-sufficient in energy by 2035 have profound implications for an aviation fuels market in the early stages of moving from a dependence on petroleum to encompassing a wide and varied range of sources.

Abundant and inexpensive natural gas is making it more difficult for renewable energy sources to establish themselves in the U.S. The nascent biofuels industry is being affected, as gas can be converted to liquid fuels in the near term and in the longer term liquefied natural gas could be used directly in aircraft engines . . . Some alternative-fuel start-ups have switched from biomass to natural gas.
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But it is the Navy's goals that are drawing the most criticism from conservative lawmakers. Empowered by the Defense Production Act, the Navy has entered into a $510 million agreement with the Energy and Agriculture Departments to promote the development of a domestic advanced biofuel industry through the construction of biofuel refineries. The Navy's share is a $170 million investment, mainly in procurement of fuels to meet its goal of deploying a “Great Green Fleet” strike group of ships and aircraft running entirely on alternative blends by 2016, en route to meeting half of its total energy needs from alternative sources by 2020. To do so, the Navy would need to replace about 8 million barrels of petroleum with unblended alternative fuels by 2020, the Congressional Research Service (CRS) reported in December.

But being an early adopter means paying higher prices, and House Armed Services Committee (HASC) Republicans such as Reps. Randy Forbes (Va.) and Michael Conaway (Texas) say the Navy spending is misguided—particularly as sequestration cuts are hurting military readiness and threatening future technological advantages by starving research and procurement spending. As part of the HASC bill markup in June, Conaway sponsored three successful amendments to ban defense buys of biofuels until their price matches conventional fuel, as well as to halt defense spending for biofuel refineries and encourage Pentagon spending on oil sands and coal-to-liquid fuel.

“This is an area that is better suited for the Energy Department to pursue and to get these fuels affordable and competitive,” Conaway says of alternatives. “If we are needing to apply them, to use these biofuels here in the U.S. to protect the homeland, that would be one thing—but that's not the case.”

But HASC Democrats such as Rep. Rick Larsen (Wash.) stress that finding alternatives to petroleum has been a key naval concern for decades, leading to innovations like nuclear-powered aircraft carriers and submarines or the DDG-1000's integrated electric-drive technology. “If in the short term there is a little bit of an expense, well, in the short term there was a little bit of expense in developing oil way back in the day,” Larsen says. “But having alternatives to oil and not being completely dependent, that is important. It's been important in the Navy for a while.”

Gee, Mr. Larsen, natural gas frees up U.S. oil and thus reduces or eliminates "dependence" - and it doesn't cost 4 or 5 times the going rate. Previous thoughts on the silliness of Navy's alternative fuel plan here and here.

Of course, natural gas is a fossil fuel which the current administration views as really, really evil and bad.

Energy: "New Gas Extraction Methods Alter Global Balance of Power"

Yes, this is another post on the importance of U.S. shale gas. For those of you unfamiliar with shale gas, a good source of information is at the U.S. Energy Information Administration's "What is shale gas and why is it important?":

Of the natural gas consumed in the United States in 2011, about 95% was produced domestically; thus, the supply of natural gas is not as dependent on foreign producers as is the supply of crude oil, and the delivery system is less subject to interruption. The availability of large quantities of shale gas should enable the United States to consume a predominantly domestic supply of gas for many years and produce more natural gas than it consumes.

So what, you might ask? Well, there are huge national and international security issues involved, as set out a couple of month's ago in Der Spiegel, "New Gas Extraction Methods Alter Global Balance of Power":

The gas revolution is changing the political balance of power all over the world. Americans and Russians have waged wars, and they have propped up or toppled regimes, over oil and gas. When the flows of energy change, the strategic and military calculations of the major powers do as well.

It is still unclear who the winners and losers will be. The Chinese and the Argentines also have enormous shale gas reserves. Experts believe that Poland, France and Germany have significant resources, although no one knows exactly how significant. Outside the United States, extraction is still in its infancy.

The outlines of a changed world order are already emerging in the simulations of geo-strategists. They show that the United States will benefit the most from the development of shale gas and oil resources. A study by Germany's foreign intelligence agency, the BND, concludes that Washington's discretionary power in foreign and security policy will increase substantially as a result of the country's new energy riches.
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According to the BND study, the political threat potential of oil producers like Iran will decline. Optimists assume that, in about 15 years, the United States will no longer have to send any aircraft carriers to the Persian Gulf to guarantee that oil tankers can pass unhindered through the Strait of Hormuz, still the most important energy bottleneck in the world.

The Russians could be on the losing end of the stick. The power of President Vladimir Putin is based primarily on oil and gas revenues. If energy prices decline in the long term, bringing down Russian revenues from the energy sector, Putin's grip on power could begin to falter. The Americans' sudden oil and gas riches are also not very good news for authoritarian regimes in the Middle East.

European industry is also likely to benefit from falling world market prices for oil and gas. But according to prognoses, without domestic extraction the Europeans' site-specific advantages deteriorate.(emphasis added)

See also Rice University's Baker Institute publication "Shale Gas and U.S. National Security" . Back in August 2011, we had a discussion on Midrats with Amy Myers Jaffe (my referring blog post was Sunday on Midrats: Gas Shale and National Security), the show is Episode 83) we finally got Ms. Jaffe online at about 31:24 into the show):

Listen to internet radio with Midrats on Blog Talk Radio

Now, who benefits from open sea lanes on which the U.S. could export LNG? Why just about everyone! Except, of course, for the Russians and the Middle East maybe. Who keeps those sea lanes open? The U.S. Navy. Who should we lend a hand to in exploring their potential for shale gas? Poland, Germany, France? China? Argentina? Australia? What about Japan? It stands to benefit from an open sea lane to receive LNG (liquified natural gas) from the U.S. and other places. See Issues Facing U.S. Shale Gas Exports To Japan.
Hat tip for Der Spiegel article: NavalHistWarStudies

Geology and Engineering: Natural Gas Shales

Nice set up of the current boom in U.S. natural gas shales from Geology.com in which a great deal of information is set out in a mostly pictorial format with links to key points of interest. Below is a partial screen shot:

This guy gets it: "Viva the shale gas revolution"

Eastern U.S. Marcellus Shale Fields

Jack Kelly at the Pittsburgh Post-Gazette does a nice job explaining the benefits of the large shale gas discoveries in the U.S. in his piece "Viva the shale gas revolution":

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Spindletop* made possible the mechanization of agriculture, which increased food production and dropped its price. Because the necessities of life cost less, we could spend more on what for ages past were luxuries only the rich could afford.

Buoyed by cheap food and cheap energy, the middle class grew in size and affluence. It's shrinking now, as Americans get squeezed between stagnant wages and rising prices for food and gas.

But in this dark hour comes an energy development that can revive our economy, restore upward mobility to the middle class and reduce the threat of Islamist terror.

This Spindletop-on-steroids is natural gas trapped in "black" shale, made accessible by hydraulic fracturing (fracking). The Marcellus Shale formation alone may contain 84 trillion cubic feet of recoverable natural gas, the U.S. Geological Survey said in August. That's up from the 2 tcf the survey had estimated in 2002.
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Marcellus Shale added 44,000 jobs in Pennsylvania and 13,000 jobs in West Virginia in 2009, according to researchers at Penn State. Ohio could add more than 200,000 jobs in just four years, an industry group there estimated in September. Nationally, the direct and indirect gains in jobs are measured in millions.

We could be energy independent in less than a decade. Iran, Saudi Arabia and Russia stand to lose their geopolitical clout.

Nothing in this life is all gain and no pain, but shale gas comes as close as anything ever has. So why are many Democrats trying to strangle Spindletop II in its crib?

The EIA's figures make it clear why "renewable" energy firms like Solyndra go bust despite massive subsidies. So President Barack Obama is trying to jack up the price of energy to make solar and wind seem less outrageously expensive.

"Under my plan of a cap and trade system, electricity rates would necessarily skyrocket," Mr. Obama told the editorial board of the San Francisco Chronicle in 2008.

A few politically connected people, such as Solyndra's George Kaiser, have made millions from "green" energy subsidies and mandates. They, in turn, give lots of money to Democrats.

Shale gas undermines this backscratching. Abundant, safe, inexpensive and environmentally friendly, it destroys the arguments for wind and solar power.

Yes.

Read the whole thing.

Oh, and if you are worked up about the water issues involved in fracking, see here for info on an invention that may solve that issue.

*Spindletop was the original big oil gusher in Texas that ushered in the age of oil.

Shale Gas: Who Objects to Poland's Exploration and Development?

 For some background, you might want to review Shale Gas and U.S. National Security and the links therein. We'll be talking about this during Midrats today at 5pm Eastern.

Buried in the Rice report is an interesting projection that Europe outside of Russia has shale gas and that the country with the highest projected level of shale gas is Poland - estimated to 120 trillion cubic feet of this gas. This is about 55% of the total estimate for Europe.

This is also a threat to the leverage that Russia hoped to invoke as Europe's largest supplier of gas.

Russia made no secret about its desire to leverage its position and create a cartel of gas producers -- a kind of latter day OPEC.

Poland - it's always Poland for Russia, isn't it? - Poland has gas - perhaps lots of shale gas. Russia's OPEC-style price fixing cartel will fail if Poland develops its own resources, especially in conjunction with development of U.S. gas shale.

And Poland is moving to develop its gas shale - with Chevron among others:

In an area becoming a new hotbed of shale natural gas exploration activity, oilfield services firm Halliburton (NYSE: HAL) has been awarded an integrated services contract from supermajor Chevron for shale natural gas exploration in Poland.

Work on Chevron Polska's initial shale gas exploration drilling program is expected to begin in the fourth quarter and the contract award is for three years, with extension opportunities. Chevron was awarded licenses to explore for unconventional gas resources in the area in December 2009.

The plan calls for Halliburton to provide services including drilling services, mud logging, cementing, coiled tubing, slickline services, well testing, completion and hydraulic fracturing. Halliburton will support the project with project management services.

In June 2010, the company announced it had also acquired rights to explore for natural gas in the Grabowiec concession, located in southeastern Poland.

Present in Poland for more than 15 years, Halliburton performed the first-ever shale hydraulic fracturing operation in Poland for PGNiG in August 2010.

The Voice of Ameria reports "Shale Gas in Poland Sparks Hopes of Wealth, Energy Security":

The rush for shale gas in Poland is attracting some of the world’s biggest energy companies, giving the country hopes of energy security and strengthening ties with the United States.

Recent finds in northern Poland appear to confirm what experts have suspected for years - that Poland has Europe’s largest reserves of shale gas.  The news promises to encourage what has become a feeding frenzy of major gas companies and Polish hopes of energy independence from Russia.

***Poprawa says it will be several years before anyone knows exactly how much gas Poland has, and at least a decade before large-scale production can begin.  But in the mean time, exploration concessions have been granted to some of the biggest energy companies in the world.

“We have on our market real majors, the biggest companies globally," he said.  "We have here Exxon, Chevron, ConocoPhillips, Total - this is kind of unique, really.  This place a couple of years ago was empty.  Now everybody from the world comes here to make their exploration.”

Of course,suddenly there are voices deriding this ambition of the Poles, as noted in
Resistance to Poland’s Shale Gas Exploration Plans Emerging:

Interest groups that want to block production of gas from shale rock will lobby at the European Union for rules that would make shale gas output unprofitable, a Polish member of the European Parliament said.

“In the fall, we expect more informational activity to encourage legislative work against shale gas,” Pawel Kowal told a press conference. “It’s not possible, for political reasons, to introduce a pan-EU ban on shale gas. But it’s possible to introduce regulations that would make it unprofitable.”

Poland’s Prime Minister Donald Tusk has called shale gas a “great opportunity” for Poland. The unconventional gas industry, while still in its infancy in Poland, could create thousands of jobs and, eventually, generate export revenue. If it turns out to be economically viable to extract, it may free Poland from dependence on Russian natural gas supplies.

Environmentalists in several countries are pushing to restrict hydraulic fracturing, or “fracking.” The technology involves injecting water, sand and chemicals into porous shale rock to release the gas trapped inside the rock. Critics say fracking contaminates ground water.

The U.K. government in July rejected calls for tough new controls on the technology. France in June became the first country to ban it completely.

Mr. Kowal, in 2006-2007 a deputy foreign minister in the conservative cabinet of Jaroslaw Kaczynski, said Poland should take steps to prevent rules that would derail Warsaw’s plans for shale gas.

“Compared to other sources of energy, extracting shale gas isn’t particularly dangerous,” he said. “But lobbying against it may come from various sources. Disinformation will lead to objections in local communities.”

Russia’s OAO Gazprom has called shale gas “a bubble” and “a danger to drinking water.”

So, who could be behind this bad-mouthing of Polish energy independence? Follow the money that will be lost to Poland's (and the rest of Europe's) current suppliers and you'll have an answer.

Stay tuned to see how this unfolds.

Geopolitics. Oh, by the way, Poland isn't the only place that has gas shale:

Sunday on Midrats: Gas Shale and National Security

Energy independence and energy security are not just buzzwords. From the car you drive to the food you eat and the heat that makes winters livable and power that makes summers productive to our urban culture; energy and power are what makes our civilization possible.

If you don't have secure energy, you do not have a secure nation. The areas of the world that have the greatest energy supplies are neither stable or natural friends of our Western Democracy.  That is a problem, and explains why most of our wars have been fought where they have been.

Is new technology helping to change the national security equation?

To discuss for the full hour will be Amy Myers Jaffe, the Wallace S. Wilson Fellow in Energy Studies, director of the Energy Forum at the Baker Institute, author, and associate director of the Rice Energy Program at Rice University.

Ms. Jaffe is one of the authors of the paper, sponsored by the U.S. Department of Energy, from the James A. Baker III Institute for Public Policy at Rice University, “SHALE GAS AND U.S. NATIONAL SECURITY”  linked to in this earlier post Shale Gas and U.S. National Security and has studied this area extensively.

Please join us for what should be an interesting conversation. Sunday, 5pm Eastern or, if you can't make it, the show will be available for download from  BlogTalkRadio or iTunes. You can join us live by clicking here

Shale Gas and U.S. National Security

A paper, sponsored by the U.S. Department of Energy from the James A. Baker III Institute for Public Policy at Rice University, "SHALE GAS AND U.S. NATIONAL SECURITY":

The Baker Institute study "Shale Gas and U.S. National Security," sponsored by the U.S. Department of Energy, investigates the role that U.S. shale gas will play in global energy markets as global primary energy use shifts increasingly to natural gas. Specifically, the study concludes that shale gas will diminish the petro-power of major natural gas producers in the Middle East, Russia and Venezuela, and it will be a major factor limiting global dependence on natural gas supplies from the same unstable regions that are currently uncertain sources of the global supply of oil. In addition, the timely development of U.S. shale gas resources will limit the need for the United States to import liquefied natural gas for at least two decades, thereby reducing negative energy-related stress on the U.S. trade deficit and economy.

But, hey, don't take this summary as truth when you can read the source document by downloading it from here.

Here's an interesting section that points out how global energy markets work (click on it to enlarge it):

 Not only is shale gas important for U.S. national security, it's providing a benefit to Europe and Asia.

Damn right it will "have significant geopolitical ramifications."

And we have a lot of it, as set out here:

The U.S. Has Abundant Shale Gas Resources

Of the natural gas consumed in the United States in 2009, 87% was produced domestically; thus, the supply of natural gas is not as dependent on foreign producers as is the supply of crude oil, and the delivery system is less subject to interruption. The availability of large quantities of shale gas will further allow the United States to consume a predominantly domestic supply of gas.

According to the EIA Annual Energy Outlook 2011, the United States possesses 2,552 trillion cubic feet (Tcf) of potential natural gas resources. Natural gas from shale resources, considered uneconomical just a few years ago, accounts for 827 Tcf of this resource estimate, more than double the estimate published last year.

Enough for 110 Years of Use

At the 2009 rate of U.S. consumption (about 22.8 Tcf per year), 2,552 Tcf of natural gas is enough to supply approximately 110 years of use. Shale gas resource and production estimates increased significantly between the 2010 and 2011 Outlook reports and are likely to increase further in the future.

So, why, instead of screwing around with ethanol and really expensive electric cars, are we not working hard to produce vehicles powered by shale and other natural gas?

U.S. Energy Information Agency study, Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays":

Although the U.S. Energy Information Administration's (EIA) National Energy Modeling System (NEMS) and energy projections began representing shale gas resource development and production in the mid-1990s, only in the past 5 years has shale gas been recognized as a "game changer" for the U.S. natural gas market. The proliferation of activity into new shale plays has increased dry shale gas production in the United States from 1.0 trillion cubic feet in 2006 to 4.8 trillion cubic feet, or 23 percent of total U.S. dry natural gas production, in 2010. Wet shale gas reserves increased to about 60.64 trillion cubic feet by year-end 2009, when they comprised about 21 percent of overall U.S. natural gas reserves, now at the highest level since 1971. Oil production from shale plays, notably the Bakken Shale in North Dakota and Montana, has also grown rapidly in recent years.

You can thank the engineers who developed the technology and techniques to make this possible.