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Will sun set again on area oil industry?

Maggie Souza, News-Journal (Longview, Texas)
Experts say many factors will help avoid repeat of ’80s bust

TO MANY PEOPLE IN EAST TEXAS, the recent drop in oil and natural gas prices is all too familiar.

Today’s oil prices are down to about half of the summer’s peak of $140 a barrel. Natural gas prices stand around $7.50 per thousand cubic feet, compared with almost $11 in June.

The feverish rise followed by dropping prices might bring to mind the boom and bust of the 1970s and ’80s that crippled local economies. Industry insiders and economic experts, however, say East Texas should be safe from the kind of financial crisis of two decades ago.

“What happened in the ’80s was due to a lot of unique factors that came together at once,” said Ray Perryman, president of The Perryman Group, a Waco-based economic and financial analysis firm. “Those factors are not happening right now.

“We’re going to see the markets fluctuate, but we should not see the ’80s-style collapse.”
(26 October 2008)

The future glows bright for gas hydrates

Léo Charbonneau, University Affairs
Countries are eyeing this vast resource as a potential energy source

The ancient elements of fire and ice come together neatly in what could be the single greatest carbon-based energy source on the planet.

That resource is gas hydrates – natural gas that is bound in a matrix of frozen water under high pressure and low temperatures. To demonstrate the potential of this material, scientists will occasionally set it alight in the laboratory, creating the spectacular image of a flaming chunk of ice.

Researchers have discovered that some of the best conditions for the formation of gas hydrates occur on the seabed off continental shelves and in Arctic permafrost, meaning Canada likely has vast deposits of the resource.

Many researchers believe it is only a matter of time before gas hydrates are developed for their energy, but there is some question as to whether Canada will – or should – lead the way.

At issue is the fact that gas hydrates are a carbon-based fuel. Assuming energy companies figure out how to economically unlock the natural gas from the ice – and many researchers think that will happen within 20 years – the burning of the gas will create carbon dioxide and hence contribute to global warming.

… Estimates vary widely of the total volume of gas trapped in hydrates worldwide, but most scientists in the field believe that the energy value of gas hydrates is at least equivalent to, and potentially a full order of magnitude greater than, all conventional oil, natural gas and coal reserves combined.

… There is, however, a potentially more urgent threat: global warming could trigger the release of methane – itself a potent greenhouse gas – from gas hydrates located in permafrost.

“Permafrost is degrading rapidly, especially in Canada. And there is a lot of gas within the permafrost and below the permafrost [in the form of gas hydrates],” says Dr. Riedel.

The International Panel on Climate Change is said to be aware of the threat, but has not included gas hydrates in its climate modelling because there is still too little known about them to quantify the threat.
(6 October 2008)
The potentially catastrophic effects of gas hydrates is relegated to the last few paragraphs of the article. In his book “Powerdown”, Richard Heinberg devotes a section to methane hydrates.

Warzone where oil prospects outweigh risks

Robin Pagnamenta, The Times
Half way up a barren mountain in northern Iraq the earth begins to shake. Starting slowly, a deep rumble is heard, stopping suddenly with a thin hydraulic hiss. But this is no earthquake. It is part of a seismic test to search for oil in a region where crude is so prolific that it oozes from the rocks.

Andy Grosse, exploration director of Sterling Energy, the British company funding the programme, says: “There is nowhere else left like this on earth — where there is so much potential but so little exploration has been done. For an oil company, it’s like being a kid in a sweet shop.”

In Baghdad, officials continue to hammer out details of a new oil law while Western oil giants bang on the door for access to vast, established fields further south. But here in Kurdistan, the scramble for Iraq’s immense reserves is well under way.
(27 October 2008)