Hydraulic Fracturing

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  1. Reconfigured LNG markets are creating major uncertainties, book says

    Global LNG markets, which have changed dramatically over the last few years, have created uncertainties that producers and customers will have to address, contend authors of a recent report. Long-term contracts are giving way to spot purchases amid excess supplies, evolving price dynamics, and competition from pipelines, the authors said during the US launch of “ LNG Markets in Transition: The Great Configuration ” at the Center for Strategic and International Studies on Sept. 28. “Why do we call it a reconfiguration? First, because the supply-demand balance will be very different from what we anticipated,” said Anne-Sophie Corbeau, a research fellow at the King Abdullah Petroleum Studies Center who previously was senior gas expert at the International Energy Agency and co-edited the report. “There will be increasing pressure on how LNG is traded. The key word will be adaptation in providing LNG to new customers at affordable prices,” she predicted. “Is such a thing possible? That’s something I think we could know and understand in the next 2-3 years.” Her co-editor, David Ledesma, said, “I think it’s fair to say the global LNG market has been shaken up.” Ledesma is a research fellow at the Oxford Institute for Energy Studies, which published the report, and a former specialist in developing complex integrated energy projects at Royal Dutch Shell PLC and other companies. “Change is happening. It’s uncomfortable. There are new players and new alliances. Evolving market structures are driving the change. No one can say for certain where it is headed,” Ledesma said. Export capacity surged When Corbeau and Ledesma began to produce the report in mid-2014, only 100 million tonnes/year of LNG export capacity was under construction, including a single US project, Ledesma noted. When they finished it in May, 150 million tpy of capacity, including 64 million tpy in the US, which were scheduled to come on line in 2015-20, was being built, he said. “We have uncertain regional demand outlooks,” Ledesma said. “Asia will remain the market with the biggest demand, but it won’t be homogenous. Europe could be a swing element because Russia wants to keep its market share through its pipelines. Norway and North Africa should not be dismissed as pipeline competitors to LNG there either.” Supplies also have surged on expectation that more LNG will be needed starting in 2020, Corbeau said. Australia is poised to become a major player with some delays, but possibly will overtake Qatar as the world’s top supplier by 2020, she told her CSIS audience. The US could benefit not only from its growing gas production but also from having several former LNG import projects that can be reconfigured for exports with relative ease, Corbeau said. “I think the consensus is that the market will be rebalanced between 2020 and 2025,” she stated. “But if there’s not demand to absorb this new LNG in Asia, Africa, and Latin America, there could be a major price war in Europe. Buyers also face a dilemma. Future demand in the next 10-20 years is uncertain. Many long-term contracts are expiring, and buyers are being pushed to spot or short-term purchases. But many export projects were built assuming there would be long-term contracts.” Overly optimistic expectations An expectation 5 years ago that there would be a golden age of gas presumed that unconventional production opportunities would be similar worldwide, according to Jonathan Stern, who founded the OEIS energy research program in 2003 and was its director until October 2011 when he became its chairman and a senior research fellow. “That hasn’t occurred, especially in Europe where anyone thinking of drilling a well that requires hydraulic fracturing can expect to encounter a rent-a-mob who’s against it,” he said. “Clean energy studies have replaced fossil-fuel programs in most European universities,” said Stern, who contributed to the report. “The UK is the single bright spot because it looks as if its carbon pricing is beginning to work—finally. But I think we’ll need to write Europe off as a significant unconventional fossil energy producer because the idea is so politically unpopular.” Christopher Caswell, KBR Inc.’s gas monetization director who prepared the report’s technical appendix, noted that export project developers can reduce costs by picking the best possible sites for projects that don’t require special treatments to make high-quality LNG. “We’ve seen both small and huge modular projects, but haven’t found the matrix in between. Repeatability is the key to modular projects, and it’s not there yet,” Caswell said. CSIS Energy and National Security Program Senior Fellow Jane Nakano, who moderated the discussion, asked how countries with lower credit ratings will be engaged if they express interest in importing LNG. “It will be a problem for places like Thailand [and Tobago] and Pakistan, which already have domestic production that is declining. No government is good at facing up to this,” said Howard Rogers, Stern’s successor as OEIS energy research program director. “I think traditional gas exporters like Egypt are going to have to rethink using middle men, which they have done for years,” Ledesma said. Many African countries have low, but increasing, wholesale gas prices, but significant regulatory uncertain and payment issues, he said. Corbeau noted, “We don’t know where all of this is heading. It could be a very messy transition.” Contact Nick Snow at nicks@pennwell.com .

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    Thu, 29 Sep 2016

  2. Gazprom Neft conducts 30-stage hydraulic fracturing operation

    PJSC Gazprom Neft said it completed a 30-stage hydraulic fracturing operation in Russia’s Yuzhno-Priobskoye field. 

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    Mon, 18 Jul 2016

  3. Unconventional Oil & Gas: Hydraulic fracturing gets quiet

    Liberty Oilfield Services, a privately-held oil & gas pressure pumping services company, is pleased to announce the release of its new Quiet Fleet.

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    Wed, 17 Aug 2016

  4. Wyoming Federal Judge Sides with States Industry, Strikes Down BLM Hydraulic Fracturing Rule

    On June 21, 2016, the US District Court for the District of Wyoming struck down the US Bureau of Land Management’s hydraulic fracturing regulations, finding that BLM “lacked Congressional authority to promulgate the regulations.” This decision is a win for industry and states’ rights, setting aside ...

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    Fri, 15 Jul 2016

  1. Study shows fracking resulted in lower mortgage defaults

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    Wed, 28 Sep 2016

  2. Court hears arguments in Clean Power Plan case

    The Supreme Court has delayed implementation until the legal challenges are resolved

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    Tue, 27 Sep 2016

  3. Oil and Gas News: Montana board rejects more fracking disclosures

    Montana regulators on Thursday turned back an effort by environmentalists, health advocates and some landowners who sought to force energy companies to divulge more information about fracking chemicals used to produce oil and gas.

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    Fri, 23 Sep 2016

  4. EIA now provides estimates of drilled but uncompleted wells in major production regions

    Starting this month, EIA's Drilling Productivity Report (DPR) includes monthly estimates of the number of drilled but uncompleted wells in the seven DPR regions.

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    Wed, 14 Sep 2016

  5. U.S. underwent quiet energy change during Obama tenure

    There are now more than three solar power jobs in the U.S. for every job mining coal

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    Fri, 9 Sep 2016

  6. White Deer Energy acquires RockPile Energy Services

    RockPile Energy Services LLC, a subsidiary of Triangle Petroleum Corp., has been acquired by White Deer Energy.

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    Fri, 9 Sep 2016

  7. Another win for statewide regulation of hydraulic fracturing

    Colorado has joined a growing list of states that prohibit municipalities from banning hydraulic fracturing .  

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    Fri, 13 May 2016

  8. Hydraulic fracturing stymied in Canadian East

    Hydraulic fracturing remains stymied in two of Canada’s Atlantic provinces. New Brunswick has extended indefinitely a moratorium on the completion technique imposed in 2014. And an independent panel appointed that year to assess hydraulic fracturing in Newfoundland and Labrador has refused to ...

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    Tue, 31 May 2016

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