Power companies shift parts of their operations from coal to gas

Deux articles intéressants sur le gaz de schiste.

Le second est un article de Bloomberg, il a malheureusement dix pages, je n’ai publié que certains extraits.

Par contre, loin d’être encourageant pour nos barrages, que nous construisons à la Romaine, qui dépasse déjà le coût d’exploitation du KW que nous vendons au sud de la frontière.

Shale gas and shale oil developments in other parts of the world, from the U.S. to China and Europe, suggest the world will have plenty of supply and low prices (see Lawrence Solomon in an accompanying commentary). Where does that leave Canada’s relatively expensive oil sands?

Imaginez, nos barrages …

Extrait de: Terence Corcoran: The energy superpower that isn’t, Terence Corcoran, Financial Post, Nov 4, 2011

Canada hardly rates a mention in Daniel Yergin’s new book

When a “global energy superpower” starts delivering tough talk to its potential customers, that superpower had better be sure that people will listen. It has also better be sure it is in fact a superpower; otherwise, it may find itself talking tough to the wind.

In recent weeks, Canada — a self-proclaimed global energy superpower — has been trying to throw its weight around over the Keystone XL pipeline, TransCanada Corp.’s $7-billion project to ship oil sands production from Alberta to Texas. In Houston on Tuesday, Natural Resources Minister Joe Oliver let the Americans know that Canada had other options. “What will happen if there wasn’t approval [of Keystone] — and we think there will be — is that we’ll simply have to intensify our efforts to sell the oil elsewhere.”

Canadian oil executives, who have a lot invested in the superpower notion, are also issuing aggressive-sounding statements aimed at the United States. A headline in The Globe and Mail Friday sounded like a threat: “Oil patch to U.S.: OK pipe or lose our oil.” The story didn’t quite back up the headline, but the sense was that Canada was developing alternatives and that China is the big alternative.

If this was intended to spook the United States into approving Keystone XL, it may not be the best strategy. Mr. Oliver said Canada would “simply” have to intensify sales efforts elsewhere. There will be nothing simple about getting oil to China. Pipelines to the West Coast will have to be built over First Nations territory and through wilderness controlled by foreign-funded environmental groups. Opposition to tankers is strong.

China isn’t at Canada’s doorstep. And the Communist regime in China knows that if the U.S. doesn’t want Canadian oil sands production, then Canada has no option but to sell to China. Becoming a global energy superpower will require better negotiating positions than are shaping up around the oil sands.

Another factor playing against Canada’s claims to global prominence is the rapidly changing world energy order.

Most expert assessments foresee dramatic changes in supply, technology and prices, with very little favouring Canada.

Shale gas and shale oil developments in other parts of the world, from the U.S. to China and Europe, suggest the world will have plenty of supply and low prices (see Lawrence Solomon in an accompanying commentary). Where does that leave Canada’s relatively expensive oil sands?

While Canadian government and industry officials have a lot invested in the idea of energy superpowerdom, few outside observers share the vision. Canada barely rates a mention in The Quest: Energy, Security and the Remaking of the Modern World, Daniel Yergin’s new book on the world energy market. A few pages are devoted to the oil sands, mostly to review the high costs and technical difficulties. “As the industry grows in scale, it will require wider collaboration on the R&D challenges, not only among oil companies and the province of Alberta, but also with Canada’s federal government.”

Far more impressive for the world’s energy future will be the impact of shale gas and shale oil. The “shale gale,” as Mr. Yergin calls it, has already transformed the U.S. gas market and shale oil could be next. Since Mr. Yergin’s book was written, the shale revolution has swept Europe and is about to transform China’s energy market.

A new study from Douglas Westwood, Unconventional Gas World Production and Drilling Forecast, says shale gas and other unconventional sources could make up one-third of growth in gas production by 2020, reports the Petroleum Economist. The United Kingdom, meanwhile, is sitting on what is widely viewed as a massive shale gas reserve.

How do Canada’s oil sands stack up against the shale revolution? Energy Business Reports, in a study titled Oil Sands, Gas and Oil Shales Market, sees shale gas as an energy-market “game changer.” As for Canada’s oil sands, it concludes that:

“Oil sands producers are operating in a narrow financial window that may be shrinking over time. They want to avoid reaching an oil price ceiling, like the one at US$147/barrel in July 2008 that contributed to the oil price collapse below US$40/barrel.… But they also want to be confident of an oil price floor — now estimated at US$65-US$95 per barrel — to justify such long-term, capital-intensive investments. Oil markets have rarely maintained such stability … ”

Gas, of course, is not interchangeable with oil as a commodity, at least not in the short term. Oil is still and is likely to remain the dominant fuel for transportation. But low gas prices generated by the shale revolution, and lower costs to produce shale oil, could keep oil prices below levels needed for profitable oil sands production.

Canada’s claims to global energy superpower status may be hard to maintain in the years to come. Even the United States, which Canadian officials once viewed as dependent on Canadian energy supplies, may soon be in a strong position to secure more of its energy needs at home and elsewhere at cheaper prices.

None of this is a sure thing. But it already seems clear that Canada’s political and corporate energy leaders do not have the upper hand in the new world energy order.

Extrait de: Could Shale Gas Reignite the U.S. Economy?, Bloomberg, November 03, 2011

Unlocking vast reserves of shale gas could solve the energy crisis, the jobs crisis, and the deficit. Now, about fracking’s safety ...

Exploitation of newly accessible supplies of gas embedded in layers of what’s known as shale rock, he predicts, will help revive domestic manufacturing and change the terms of debate about global warming. “It’s a new industrial renaissance,” he says…

Encouraged by the availability of inexpensive and cleaner domestic gas, some electric utilities are replacing their coal-burning capacity with gas-fired units. Energy-intensive manufacturers of chemicals, plastics, and steel are beginning to bring home operations that they exported years ago. “We believe natural gas must be part of any discussion on strengthening our country’s long-term economic health,” Mulva said in Detroit. “It should also be part of any discussion on improving energy security, protecting the environment, and, yes, creating jobs.”

·         On the economic potential of the nascent shale revolution, even some career environmentalists sound impressed, if cautious. “This thing is a potential game-changer,” says Fred Krupp, president of the New York-based Environmental Defense Fund (EDF).

·         Shale production in the U.S. has increased from practically nothing in 2000 to more than 13 billion cubic feet per day, or about 30 percent of the country’s natural gas supply.

That proportion is heading toward 50 percent in coming years. The U.S. passed Russia in 2009 to become the world’s largest producer of natural gas …

The nation now gets

1.      45 percent of its electricity from coal,

2.      25 percent from natural gas,

3.      20 percent from nuclear,

4.      7 percent from hydro,

5.      and 2 percent from wind.

6.      Solar barely registers…

Overcoming some of the concerns of their contractors, Chesapeake and other producers (and the contractors themselves) have begun to disclose the chemical additives used in fracking. An industry-sponsored website, www.fracfocus.org, allows companies voluntarily to report the additives on a well-by-well basis. “We just decided to do what we should have done from the start,” says Chesapeake’s Gipson. Disclosure isn’t universal yet, but it’s headed in that direction. Arkansas, Texas, and certain other gas-producing states have enacted legal requirements for full disclosure as a condition of continued fracking…

The 2011 MIT study estimates that between 2005 and 2009 there were some 50 incidents nationwide involving a variety of gas drilling mishaps: groundwater contamination, surface spills, offsite disposal issues, air quality problems, and well blowouts. To provide guidance on how to reduce gas drilling risks, the DOE set up its seven-person shale committee…

Some electric utilities are overcoming their deep-seated uneasiness over natural gas to shift parts of their operations from coal to gas. The switch is inviting because many coal-burning facilities are antiquated, and the country already has large amounts of more modern, underused natural gas utility capacity (a holdover from overbuilding in the late 1990s). The coal industry is fighting fierce rear-guard battles to prevent the move to gas. But a variety of federal antipollution rules taking effect in coming years will provide an additional reason to consider gas. Power companies in 15 states, including California, Florida, and Pennsylvania, have recently announced expanded use of natural gas, often at the expense of coal, according to America’s Natural Gas Alliance, a trade group.

“We need to find a way to take advantage of this historic opportunity to cut back on burning coal, which is the worst energy option,” says the EDF’s Krupp. And he says that as an advocate of more wind- and solar-generated electricity. The best way to exploit renewable power on a large scale is to use it in conjunction with natural gas plants. Gas-fired generation ensures steady power when the wind isn’t blowing or the sun isn’t shining. “Done the right way,” Krupp says, “there’s just a lot to be said for natural gas.” — With reporting by Cristina Alesci and Ken Wells