Posts from ‘April, 2011’

Gas is a natural by-product of shale rock

12 April 2011 Last updated at 18:10

By Richard Black Environment correspondent, BBC News

The new kid on the energy block, shale gas, may be worse in climate change terms than coal, a study concludes.

Drawn from rock through a controversial “fracking” process, some hail the gas as a “stepping stone” to a low-carbon future and a route to energy security.

But US researchers found that shale gas wells leak substantial amounts of methane, a potent greenhouse gas.

This makes its climate impact worse than conventional gas, they say – and probably worse than coal as well.

“Compared to coal, the footprint of shale gas is at least 20% greater and perhaps more than twice as great on the 20-year horizon, and is comparable over 100 years,” they write in a paper to be published shortly in the journal Climatic Change.

“We have produced the first comprehensive analysis of the greenhouse gas footprint of shale gas,” said lead author Robert Howarth from Cornell University in Ithaca, US.

“We have used the best available data [and] the conclusion is that shale gas may indeed be quite damaging to global warming, quite likely as bad or worse than coal,” he told BBC News.

Short-term fix?

Greenhouse gas emissions from shale gas are predominantly down to two things: carbon dioxide produced when the gas is burned, and methane that leaks out while the well is being exploited.

Figures from the US government and industry indicate that at least a third more methane leaks from shale gas extraction than from conventional wells – and perhaps more than twice as much.

Extracting the gas involves a complex sequence of processes including drilling down and then sideways along a shale bed, cracking the rock with hydraulic pressure or explosions (fracking), placing plugs in the shaft and then “drilling out” these plugs.

Coal, by contrast, is associated with a much smaller methane release during mining; but burning it produces about twice as much CO2 as burning natural gas.

Molecule for molecule, methane is a much more potent greenhouse gas than CO2; but it lasts for a much shorter time in the atmosphere.

Figures from this research team indicate that over a 20-year period, the net warming impact of using shale gas is worse than coal – and, perhaps more surprisingly, that conventional gas may be worse than coal as well.

Over a 100-year timeframe, conventional gas is almost certainly better than coal – but shale gas could be worse.

The precise numbers depend most on leakage rates. Dr Howarth’s group used “best practice” estimates; in the real world, therefore, the leakage and the climate impact could be even worse.

“No-one knows for sure to what extent industry uses best practices; and unfortunately, at least in the US, industry does not want government or the public to know,” he said.

“The Environmental Protection Agency has proposed rules that would require industry to report methane emissions, but several companies have sued the EPA to try to prevent such reporting.”

With greenhouse gas emissions resuming their rise as societies emerge from recession, and with growth in fossil fuel use expanding at a faster absolute rate than renewables, some analysts and even climate campaigners have seized on the option of expanding gas use as a “transitional fuel” on the way from high-carbon coal-burning to low-carbon alternatives.

The new US analysis suggests this may not be a sensible strategy, given that the total carbon footprint appears bigger – especially if the gas comes from shale formations.

Current projections suggest that within 25 years, half of the US natural gas output will come from shale, while many other countries are also pursuing the technology.

The first trial fracking in the UK took place last month, in Lancashire.

Euan Nisbet, a geologist who runs several methane monitoring and research programmes from Royal Holloway, University of London, suggested the detailed balance might vary between geological formations.

“By trying to evaluate the greenhouse gas footprint of shale gas extraction, Howarth and his team are asking important questions about this new bonanza,” he said.

“I suspect the debate on this will be long, and the answers will be different for each shale gas formation; but it is important that we tackle this debate.”

“We also need to be very careful to account fully for the greenhouse footprint of conventional gas piped over long distances, for instance in the import of Asian gas to Europe, or Norwegian gas to the UK. The energy choices are not easy.”

The UK Department for Energy and Climate Change (DECC) is preparing to issue more fracking licences around the country, and a spokesman said it would “closely monitor developments and consider the need for additional research to improve our understanding of the implications for policy”.

Robert Howarth, however, was less equivocal.

“We should not proceed to view shale gas as a ‘transitional fuel’ to be used over the next few decades to replace other fossil fuels, but rather work harder to move towards truly green renewable fuels as quickly as possible, such as wind and solar.”

SOURCE ARTICLE

RELATED CARTOON

Royal Dutch Shell is facing a growing outcry against its plans to conduct hydraulic fracturing in the Karoo. The process of fracking has received bad press in the US. In fact some states have banned it. Shell wants to take this controversial process of mining unconventional gas to the Karoo. (SOURCE)

AN INTRIGUING TURN OF EVENTS IN SHELL ESPIONAGE MACHINATIONS

By Alfred & John Donovan

Regular visitors will be aware of our extensive history stretching back over a decade of being the subjects of intense Royal Dutch Shell espionage activity.

Shell admitted in writing its association with an undercover agent caught red-handed at our offices using fake credentials. Shell informed us that he was not the only investigative agent on our case, but refused to reveal the nature and scope of other intelligence gathering activities.

Shell categorically denied any connection with other sinister events, including threats made against us and our key witnesses in the run up to a High Court action against Shell; burglaries at the homes of our lawyer, our main witness and our own home during the same period, when Shell related documents were examined; interviews conducted with our key witnesses and our solicitor by undercover agents pretending to be journalists for well known newspapers.

We later discovered that Shell senior directors were the spymasters and major shareholders in Hakluyt, a private intelligence firm in London said to be staffed by former senior MI6 officers. Hakluyt had been engaged on an international basis mounting subversive spying operations against Shell’s perceived enemies, including Greenpeace, The Body Shop and Nigerian activists. We subsequently corresponded with Hakluyt in circumstances of astonishing intrigue involving lawyers at The Church of England and could not obtain a straightforward denial by Hakluyt of involvement in our case.

Shell spying on us and our website has continued through the years with Shell eventually setting up a global spying operation in an effort to stop Shell insider information from reaching us. The name of former MI6 senior officer, Ian Forbes McCredie, has been mentioned in our articles on this subject.

Mr McCredie has recently retired from his position as Vice President of Shell Global Security.

This is the AutoReply from his Shell email address:

From: Ian.McCredie@shell.com
Date: 12 April 2011 21:19:23 GMT+01:00
To: john@shellnews.net
Subject: Out of Office AutoReply: Test

I retired from Shell on 31 Dec 2010 but can be contacted on ian.mccredie@hakluyt.co.uk or +44 (0) 20 7491 5213.

Nico den Boer will be acting Vice President for Corporate Security until my successor assumes the role.

An intriguing turn of events in Shell espionage machinations. Need we say more?

COMMENT BY “ICEPICK”

Very interesting piece, and I can assure you does not begin to scratch the surface of these types of activities throughout Shell.

Royal Dutch Shell has cemented its partnership with Gazprom by discussing asset swaps and how to increase shipments of gas to Japan, where the Fukushima nuclear disaster has caused an energy shortage.

Shell revealed last year that it would let Gazprom share some of its projects abroad if it is allowed to help develop the third and fourth stages of the lucrative Sakhalin island in Russia. Photo: EPA

By Rowena Mason 7:57PM BST 12 Apr 2011

Peter Voser, Shell chief executive, flew to Moscow for meetings with Alexey Miller, the head of Gazprom, where they talked about deals related to Siberia and Asia.

“While discussing the situation on global energy markets, both sides considered the issue of increasing LNG [liquefied natural gas] supplies to Japan from the Sakhalin-2 project as the fastest way to stabilise power supply for its consumers,” a Gazprom spokesman said.

Shell revealed last year that it would let Gazprom share some of its projects abroad if it is allowed to help develop the third and fourth stages of the lucrative Sakhalin island in Russia. Deals could even take the form of asset swaps, as Gazprom seeks to increase its presence on the international stage. Sakhalin is thought to contain reserves of more than 14bn barrels of oil equivalent.

Tuesday’s talks appear to continue a remarkable turnaround in historically strained relations between Shell and Russia.

It was four years since Russia forced Shell to cede control of its $22bn (£14bn) Siberian field, Sakhalin-2, to Gazprom, but it appears that cordial relations have been re-established.

The Anglo-Dutch oil giant was forced to sell down its 55pc stake in Sakhalin-2 to Gazprom in 2006 in a powerful display of Russian resource nationalism.

SOURCE ARTICLE

MOSCOW, April 12, 2011

Russian energy giant Gazprom and Anglo-Dutch oil major Shell discussed joint projects in West Siberia and in the east of Russia, Gazprom’s participation in Shell’s undertakings in third countries and increased liquefied natural gas (LNG) deliveries to quake-hit Japan from the Sakhalin-II project, Gazprom said on Tuesday.

Gazprom head Alexei Miller and Shell CEO Peter Voser held a working meeting on Tuesday to discuss the companies’ interaction under a protocol on global strategic partnership, the Russian energy giant said in a statement.

“The participants in the meeting also discussed the possibilities of joint operations for hydrocarbon refining and distribution in Russia and Europe, and Gazprom’s participation in Shell’s oil and gas exploration and extraction projects in third countries,” Gazprom said.

Miller and Voser also discussed the world energy product market and an increase in LNG supplies to Japan, which was hit by a powerful earthquake and tsunami on March 11. More LNG supplies to Japan are intended to quickly restore Japan’s energy balance.

Earlier reports said Shell may offer Gazprom assets in Asia in exchange for modernization of an LNG plant in Russia under the Sakhalin-II oil and gas project off Russia’s Pacific coast. Shell wants to boost the plant’s output by 50% and raise its stake in the plant.

Shell also plans to get access to new Russian offshore deposits to increase gas supplies to the LNG plant. Shell intends to choose foreign assets that would be of interest for Gazprom to get support from the Russian energy giant.

Gazprom and Shell are exchanging information on oil deposits in West Siberia.

The $22 billion Sakhalin II project, in which Russian gas monopoly Gazprom holds a controlling stake, has estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.

The project’s other shareholders are Royal Dutch Shell plc with a 27.5% stake, Mitsui & Co. Ltd. with 12.5% and Mitsubishi Corporation with 10%.

MOSCOW, April 12 (RIA Novosti)

SOURCE ARTICLE

LAGOS, Nigeria

Royal Dutch Shell PLC says it will build a $101 million gas pipeline through Nigeria’s oil-rich southern delta to help it cut down on burning gas from its operations.

Shell’s local subsidiary issued a statement Monday saying it will build a 26-mile (42-kilometer) pipeline to bring the gas to a plant for domestic use.

The gas fires, known as flaring, are caused by the burning of natural gas that is produced along with crude oil. Environmentalists describe it as one of the largest sources of greenhouse gases which cause global warming. Those living in the Niger Delta say the burning contributes to acid rain and causes respiratory illnesses. Flaring leaves their fishing villages bathed in light at all hours.

SOURCE ARTICLE

Illustration: Simon Letch

Wednesday, April 13, 2011

The news that Royal Dutch Shell has bitten the bullet on its oil refining plant in NSW, Clyde Refinery, should come as no surprise. The economics of refining fuel are not what they used to be.

For Shell in particular its move to pull back from this business is in keeping with a worldwide spring cleaning exercise that has resulted in it selling down its stake in Woodside Petroleum. The sale of the remainder of this 24 per cent stake is inhibited only by its ability to find an appropriate buyer and an attractive price.

On a near weekly basis rumours swell around the market that Shell is in negotiations with BHP to pick up the stake – motivated by the fact that it would represent such a perfect fit. BHP has the money and the Australian pedigree and interests in Woodside’s LNG projects.

The Woodside investment no longer fits well for Shell.

Nor does Shell appreciate the skinny refiner margins that it receives from its Clyde refining plant.

The proposal to transform the Clyde refinery into a storage unit says plenty about where Shell sees these margins heading.

Apart from a few years, between 2005 and 2007, it is generally held that worldwide refinery margins have been in a long-term decline.

Caltex, which is listed in Australia, disagrees and was quick to assure the media yesterday that it saw a gradual recovery in its refiner margins as demand growth outstripped net capacity additions. It retains refining as a key part of an integrated business.

Having one of the competitors pull out will only help Caltex. It has been busy investing in its refining business to keep it competitive.

But Shell does not see it the same way. It takes the view that the Clyde plant was too small to compete with the imports coming in from mega refineries in places like India, Korea, Japan and the Middle East. On the one hand the scale (and technology) makes these new plants lower cost operations. Shell said it would need to undertake large scale investment in Clyde but had decided against it – pending submissions from employees and unions.

Shell’s vice-president Andrew Smith would not elaborate yesterday on what the staff could do to convince the company to keep the refinery open. Probably nothing.

It is happy enough to be at either end of the production chain – extraction and retailing – but in Australia at least does not see the benefit in having the integration that refining allows.

Last year Shell undertook a tidying up exercise in New Zealand, where it sold a 17 per cent stake in a local refiner and 200 petrol stations.

The shrinkage in oil refinery has been a worldwide problem, and at various times Australian operators have tried to merge or rationalise.

ExxonMobil’s attempts to sell its petrol stations to Caltex in 2009 were blocked by the Australian Competition and Consumer Commission. They were ultimately sold to the convenience chain 7-Eleven.

On the world stage there has been a growing trend among the big Western oil companies to ditch their refining assets.

A recent article in The Economist cites several large divestments including Shell’s $1.3 billion sale to the Indian conglomerate Essar of its Stanlow refinery in north-western England. In February the state-owned PetroChina paid $1 billion for a half-share in Grangemouth refinery in Scotland and in another at Lavera in the south of France.

And there are others on the block in the US and Europe.

The buyers are typically state-owned players in emerging Asia and the Middle East with agendas other than just profit. They are attracted by the low prices.

There is a view that the refining business has suffered from chronic overcapacity, and thus weak margins, since the 1970s oil shocks, which led to a slump in the use of oil-based fuels for generating electricity and heating homes.

Refining margins, having touched $4.50 a barrel, are down to one-tenth of that and still falling, The Economist says.

The new buyers, who in many cases include private equity players, could also be taking a punt that at some stage the refining margins will recover.

There is certainly evidence that margins move a bit in response to economic cycles, but the longer-term trend is not encouraging.

For the state-owned buyers of these assets such an outcome may not be a particular problem, but for private equity, excess capacity in the market and the potential for margins to fall even further could result in another wave of refinery selling.

Many experts argue that the industry is in need of further consolidation.

But in Australia at least there is no suggestion that this will be allowed. Indeed, refiners have been blamed in part for the high fuel prices at the bowser, and there is little or no political willingness for any part of the production process to become further concentrated.

For the older, less efficient refineries like Clyde there are clearly no buyers. As a result, hundreds of workers face the axe.

The decision was made without so much as contemplation of a carbon tax.

SOURCE ARTICLE

The Irish Times – Monday, April 11, 2011

LORNA SIGGINS Western Correspondent

GARDAÍ IN north Mayo have initiated inquiries into alleged threats made to a contact supplying information on the Corrib gas project to a British whistleblowers’ website.

Supt Pat Diskin of Belmullet Garda station confirmed yesterday his office was carrying out “initial inquiries” regarding “correspondence in relation to matters raised by a third party”, but could not comment further.

John Donovan, who runs RoyalDutchShellplc.com with his father, Alfred, said he had written to the Garda Commissioner last October and was contacted by Supt Diskin just over a week ago.

Mr Donovan said he had informed the Garda Commissioner’s office last October of alleged “death threats” made to a party or parties that had been sending internal documentation relating to Corrib gas to his website. Mr Donovan said he had no information on the identity of the contact, who began sending e-mails to his website on July 21st last year.

He said the contact claimed several months later that “death threats” had been made against those leaking the information.

“I pointed out that they had the option to cease feeding the leaked e-mails to me,” Mr Donovan said. “They did stop and I received the last communication on October 25th, 2010.”

Shell has declined to comment, but company sources have confirmed the veracity of the leaked information.

The RoyalDutchShellplc.com website is highly critical of Shell’s operations worldwide. It was established in 2005 by the Donovans, owners of a marketing company which was involved in court actions with Shell.

SOURCE ARTICLE

Woodside liquefied natural gas platform in the Timor Sea Source: The Australian

Matt Chambers April 11, 2011

ROYAL Dutch Shell is playing hardball on a possible sale of its 24 per cent stake in Woodside Petroleum to BHP Billiton, its local chief declaring yesterday that Shell was in “no hurry” to do a deal.

Speaking on the sidelines of a conference in Perth last night and ahead of this week’s annual Australian Petroleum Production & Exploration Association meeting, Shell Australia chair Ann Pickard moved to hose down reports out of London at the weekend that a sale of its stake in the Perth-based oil and gas company was imminent.

“There are no commercial discussions,” Ms Pickard said, choosing her words carefully. “I’m not in a hurry to do anything. Woodside is a great company.” She declined to elaborate on whether any discussions had already taken place.

Her comments come amid speculation that BHP, the world’s largest miner, is preparing to launch Australia’s biggest ever takeover bid for Woodside.

It came as Ms Pickard shared a stage in a curtain-raiser to the APPEA conference with Woodside chief executive Don Voelte. Mr Voelte said last night he was not aware of any talks. “If I knew anything I would have to tell the (Australian Securities) exchange.”

Reports yesterday from London — where Shell is jointly headquartered — indicated a $46.5 billion tilt for Woodside was could be imminent. London’s Sunday Times reported that BHP was “holding detailed talks” with Royal Dutch Shell.

The speculation of a deal has been running for some weeks, but the stellar run on Woodside’s shares on the back of the speculation could have stymied a move on the company.

Woodside’s share price has jumped 14 per cent to $47.26 in the past 10 days and many petroleum analysts believe the company may now be too expensive.

But in a sign that BHP might try to structure a deal differently, The Sunday Times reported that Shell would give BHP its 24 per cent Woodside stake and in return receive some of the Australian company’s best assets, including the giant Sunrise gasfield.

Once BHP has agreed the deal with Shell, it would launch a full takeover offer for Woodside. UBS is advising Shell on its options.

The deal would be the largest corporate transaction in Australia’s history.

At the speculated price, the bid would be worth twice as much as the current largest deal — the $21.9bn takeover of Coles by Wesfarmers in 2007.

A move on Woodside would mark a significant strategic switch for BHP, which has a cash pile of $16bn built up in the commodities boom that has taken the price of iron ore, copper and oil to record levels. While it already has oil and gas assets, they are small compared with the mining operations.

Both BHP and Woodside refused to comment yesterday on the strengthening speculation.

It would also represent a bold return to the deal-making fray by the group, led by chief executive Marius Kloppers and chairman Jac Nasser. It has attempted three big takeovers in recent years, and failed each time. The most recent came last year, when Canadian regulators blocked a $40bn bid for Potash Corporation of Saskatchewan on the grounds that it was against the national interest.

It is understood that BHP has already taken political soundings on the deal, with private talks with WA Premier Colin Barnett and the federal government.

The response from Mr Barnett is thought to have been negative, while Canberra has given little indication on its stance.

ADDITIONAL REPORTING: THE SUNDAY TIMES

SOURCE ARTICLE

By John Letzing , MarketWatch

SAN FRANCISCO (MarketWatch) — Chevron Corp. said Sunday it has agreed to sell a stake in its proposed Wheatstone natural-gas project in Australia, a key means for the U.S. oil giant to address growing demand for energy resources in China and other parts of Asia, to Royal Dutch Shell PLC.

Under the terms of the deal, Shell will gain an 8% interest in Chevron’s  Wheatstone and Iago natural gas fields offshore of northwest Australia.

In addition, Shell will gain a 6.4% interest in the project facilities, while Chevron will remain the project operator, Chevron said.

“The Wheatstone hub will provide a reliable new source of energy to Australia and the region. It will also further enhance Chevron’s position as a leading supplier of liquefied natural gas … in Asia-Pacific,” Chevron vice chairman George Kirkland said in a statement.

The planned Wheatstone project is a key element in Chevron’s plan, unveiled late last year, to increase capital spending this year by some $4.4 billion.

The project is seen as a significant bet by Chevron to be able to feed the continued, rapid economic expansion in China, which has outstripped growth in other parts of the world.

Chevron said Sunday that “front-end engineering and design activity” on the Wheatstone Project is nearing completion, adding that a “final investment decision” on the project is expected in the second half of this year.

John Letzing is a MarketWatch reporter based in San Francisco.

SOURCE ARTICLE