Shale will affect global energy needs

Shale will affect global energy needs

HOUSTON

The majority of executives at KPMG Global Energy Institute agree the development of shale oil and gas reserves will have a significant effect on global energy needs over the next three years.

In addition, nearly half (49 percent) believe shale, which accounted for only 20 percent of total natural-gas production in 2010, will become the U.S.’s dominant source for natural gas by 2020. Another 22 percent believe shale will be the primary source for natural gas by 2025.

“Increased production of shale gas in North America could have profound implications on the global energy sector,” said Regina Mayor, oil and gas sector leader for KPMG U.S. “Companies will continue to invest heavily in shale assets, as the industry has only just scratched the surface in the development and resulting production resulting from these assets.”

Seventy-eight percent of executives believe the industry’s emphasis in developing environmentally friendly technologies should be focused on natural gas. As such, shale gas and oil (61 percent) was most frequently cited by executives as the alternative energy source that will win the most significant R&D investment over the next three years — up from 44 percent who selected shale in KPMG’s 2011 survey. Interestingly, executives surveyed admit that the environmental concerns around fracking eventually may have an upward pressure on natural-gas prices.

Hearing in Denver tackles fracking

Denver

Western state officials took turns bashing the federal government recently at a congressional field hearing on proposed nationwide drilling rules on hydraulic fracturing.

The field hearing by the Subcommittee on Energy and Mineral Resources was called in response to the announcement by the Obama administration that it would seek coordinated federal oversight of natural-gas production. The Interior Department, meanwhile, is expected to issue new rules on natural-gas drilling on public lands

The federal oversight was denounced by officials from Colorado, Wyoming and Utah, all of which rely heavily on oil and gas production.

Land rush in Illinois

McLEANSBORO, Ill.

Across several southern Illinois counties, there’s a land rush emerging. And it’s the potential of once-inaccessible underground oil and natural gas that’s fueling it.

Out-of-staters recently have converged on Hamilton, Saline and Wayne counties to scour through property records and establish who owns underground mineral rights their clients or companies may be able to lease for drilling.

The research by those “land men” is linked to a drilling technique called hydraulic fracturing. That so-called fracking involves blasting water, sand and chemicals into shale to free trapped energy sources.

Critics believe the chemicals have polluted drinking-water supplies. The industry says there’s no proof.

The intense interest stems from a belief that the region’s shale has oil and liquid hydrocarbons that are rarer — and more profitable — than natural gas.

Plant to convert shale gas to ethylene

CHARLESTON, W.Va.

West Virginia Commerce Secretary Keith Burdette said Aither Chemical’s plans to build a petrochemical plant at Institute remain on track, but the company is still working on details with potential partners.

Burdette told the Charleston Gazette he’s convinced everything will be resolved.

Aither spokesman Jason Kelling said the company is actively searching for building sites, but he declined to identify possible partners.

The so-called “cracker” plant would employ about 200 people. It would convert ethane gas from the Marcellus Shale into ethylene, which is used to make plastics.

In February, Gov. Earl Ray Tomblin signed into law a tax-incentive plan designed to lure an ethane cracker plant to West Virginia. The following month, Shell Oil chose Pennsylvania over West Virginia as the location for such a plant.

Unwanted Neb. sand put to use in oil fields

GENOA, Neb.

Some unwanted Nebraska sand has been put to use in some U.S. oil fields.

The Loups Public Power District has been dredging the sand from the head of a power canal along the Loup River near Genoa for 75 years, ensuring that the water flows unimpeded into its two powerhouses to generate electricity.

On the south side of the canal, the mountains of sand have been turned into a playground for all-terrain vehicles. But the Columbus Telegram reported that the district couldn’t find anyone to take the sand on the north side.

In 2006, Legacy Resources Co. began building a facility that could ship out the sand for use in hydraulic fracturing‚ö or fracking‚ö the process that injects water and sand into the ground to free deposits of petroleum and natural gas.

Preferred Unlimited Co., an investment group from Radnor, Pa., saw the potential in Legacy’s operation and bought it in 2007.

Star power rallies against fracking

ALBANY, N.Y.

The anti-fracking movement in New York state turned up the star power in May with a rally in the Capitol and concert at the Empire State Plaza. New Yorkers Against Fracking had a rally at the grand stone staircase inside the Capitol before a concert at The Egg, a 982-seat performing-arts center in the state Capitol complex. The coalition called on Gov. Andrew Cuomo to ban hydraulic fracturing, or fracking, for gas in the Marcellus Shale region of southern New York.

Actors Mark Ruffalo and Melissa Leo hosted the concert that featured Natalie Merchant, John Sebastian, Joan Osborne and a number of other performers.

Ruffalo, who has a home in Callicoon in upstate New York, is active in the \coalition of 100 environmental, health care, political and other organizations. The group staged the rally and concert to draw attention to health, environmental and social problems related to shale-gas development.

Opponents say fracking, which blasts chemically treated water into a well to crack shale and release gas, could contaminate water supplies with toxic chemicals and radiation. They cite numerous cases of health problems such as headaches, nosebleeds and rashes in humans, and reproductive problems in livestock in areas of the country with heavy gas-drilling activity.