Dash for Poland’s gas could end Russian stranglehold

Robin Pagnamenta, The Times
American technology to produce shale gas is unleashing a scramble for drilling rights in Poland, where experts believe vast reserves of unconventional gas exist that could help to weaken Russia’s grip on Europe’s energy supplies.

ConocoPhillips is poised to launch Poland’s first shale gas drilling programme next month near Gdansk on the Baltic coast.

Two other American oil groups — Exxon-Mobil and Marathon — and Talisman Energy, of Canada, are set to follow.

The technology has transformed America’s energy industry and driven gas prices to their lowest level in years.

Wood Mackenzie, the oil and gas research group, estimates that there could be as much as 48 trillion cubic feet (1,36 trillion cubic metres) of unconventional gas stretching across northern and central Poland. The gas, which does not lie in conventional reservoirs but inside tight rock formations, has become accessible only recently through the use of new hydraulic fracturing technology developed in the United States.

If confirmed, Wood Mackenzie’s estimate would boost the European Union’s proven reserves of natural gas, which stand at 101 trillion cubic feet, by 47 per cent and be enough to make Poland, which imports 72 per cent of its gas, self-sufficient for the foreseeable future.

“There is a landgrab under way,” said Oisin Fanning, the executive chairman of San Leon Energy, a British company that has secured three licence areas in the region with Talisman. “Poland is going to emerge as a significant gas producer and there is a lot of interest. All of the majors are coming in and Gazprom is looking at this with some alarm.” He said that Talisman planned to spend $140 million (£90 million) on its Polish drilling programme, which will start next year.
(5 April 2010)

Natural-Gas Data Overstated

Carolyn Cui, Wall Street Journal (preview only)
The Energy Department is preparing to make sweeping revisions to its U.S. natural-gas production data after finding it has been overstating output, raising new questions about the government’s collection of energy information.

The monthly gas-production data, known as the 914 report, is used by the industry and analysts as a guide for everything from making capital investments to predicting future natural-gas prices and stock recommendations.

But the Energy Information Administration, the statistical unit of the Energy Department, has uncovered a fundamental problem in the way it collects the data from producers across the country—it surveys only large producers and extrapolates …
(5 April 2010)
You gotta pay for the WSJ these days.

BP fights to limit controls on shale gas drilling

Terry Macalister, The Guardian
BP is lobbying on Capitol Hill against a federal US environmental agency being given jurisdiction over the use of a controversial method of extracting gas from shale deposits, ahead of an important meeting this week.

The London-based oil company wants decisions on drilling techniques such as hydraulic fracturing – which uses high-pressure liquids to force fissures – to be taken at state level, rather than being left to the Environmental Protection Agency (EPA), whose specialist committee meets on Wednesday to discuss its concerns.

BP is also opposed to the public disclosure of the chemicals used in fracturing, on the basis that the information is commercially sensitive – something that will anger environmentalists, who are highly suspicious of the process.

Although BP was unable to comment, the New York Times published a “discussion draft” said to have been produced by BP which says: “States with existing oil and gas regulatory programmes have the authority to and are best situated to continue regulating hydraulic fracturing processes and procedures.”

Tony Hayward, the chief executive of BP, said in a recent speech that abundant shale gas had the potential to transform the US’s dependence on foreign gas imports.

The shale gas deposits have been known about for decades but recent technological developments have opened the way for supplies to be exploited in North America – and potentially in Europe and Asia.

Environmental groups fear that the chemicals used in fracturing are highly toxic and are worried about them filtering into reservoirs.
(4 April 2010)
related: this post by Heading Out on the Oil Drum.