Shale gas situation in Europe

8/13/2019 Shale gas situation in Europe

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Shale Gas Project inEuropeMd. Abdullah Al Bari

Alona


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Outlines

What is shale gas?

Extractions

Environmental Risks

Economical Aspects

World present situation of Shale Gas and Europe

Legal Constraint


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What is shale gas?

Natural gasUnconventionalFound in certain types of shale2,000-7,000 feet deepLow permeabilityPrevalent in the areaAround 23,000 trillion cubic feet in the worl


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Shale Gas is traditional natural gas only in rocks(typically shales) that are very fine grained and sothe gas does not flow out readily.

The gas is trapped in the pores in the rock betweenthe rock grains.

This shale was formed by the mud of shallow seasthat existed 350 million years ago.

It is a mixture of methane, butane and other

hydrocarbons. Some condensate (light oil) typicallyproduced.


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Unconventional vs. Conventional


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Extractions

1. Leasing land

2. Exploration3. Drilling

Hydraulic fracturing

Horizontal drilling

4. Collecting5. Restoration


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Hydraulic Fracturing

Technique for extracting natural gas from tightrock

structures deep below surface

Has been used since 1950s

Hydraulic Fracturing involves

Drilling a well deep down below earth

Turning drill to horizontal

Inject 500,000 gallons of fluid to fracture shale

Fluid is 99% water plus sand and chemicals

Extracting natural gas


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Horizontal Drilling

In Horizontal drilling, instead of needing multiple wellsites to drill vertically into natural gas zones, lessland use at the surface as several wellheads can belocated on a single well site.

Enables high productivity along the seams

Increases output per drilling pad


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Environmental Risks

1. Land disturbance from

2. Freshwater use

3. Drilling through aquife

4. Effects from the fractu

5. Wastewater retrieval

6. Wastewater storage

7. Water/Wastewater tra

8. Wastewater treatment

9. Wastewater reinjectio

10.Flaring

11.Gas leakage


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Drilling Pad

Land disturbance

GHG emission and air quality

- Leaks of gases from the wells

- Emissions from pumps and diesel trucks

- Sand from hoppers

Flaring

- Noise, light pollution,

- environmental impacts

- Wasted energy

- Gas is cheap, pipelines are expansive


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Drilling Process

The well goes through the freshwateaquifer

- Well must be properly cased to theright depth

- Drilling is usually 10-30 days

Same risk as of conventional oil and

gas drill, but with higher pressure andifferent chemicals


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The Fracturing Process

Hydraulic fracturing is a well completion

process- Frac fluids: 2 to 9 million gallons per

well

- Proppants : Approximately a half-millionpounds of sand

- Chemical additives mixed wth water

- Injected at thousands of gallons perminute

Probability of induced seismicity


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Frac Fluids Chemical Compositions

Fractions grow as water use decreases Liquid-rich shales use more acids and gels


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Drilling must pass through shallow

drinking water aquifers Well casings made of steel and co

can become defective or damaged

Potential chemical spills

Road/construction activity

Gas from fracture may mix with w

Threats to Drinking Water


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Problems of Wastewater

Wastewater has three components:

- Drilling muds

- Flow back water

- Produced water

Often stored on-site in ponds/pits

Wastewater can leak down from thepit to the groundwater


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Wastewater Treatment Plant

Cannot handle the quantity of wa

used Unsure of the chemical compositi

the proprietary chemicals used inacid fracturing process

Do not successfully remove salts a

other dissolved solids

Often gets return to river aftertreatment anyway

- Introduce risk of Inter Basin transf


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Wastewater Injection

Some countries allow wastewater injectionto specified locations

Injecting at a fault can induce seismicity

Reinjection is easier than treatment


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Economical Aspects


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Some factors influencing the well cost

Example:

in USA 10,500 vertical foot well a 4000 lateral in Hayneshville Shale costs about $8

million, while in Poland the same well would cost by expert estimates about $14million to $16 million.

Why?

Depth European shale deposits are located 1.5 times deeper in the earth thanthe US

Infrastructure Lack of gas infrastructure to transport & store it

Regulation More regulations in Europe in terms of labour laws andenvironmental laws

Services Limited availability of drilling service providers in Europe (vs. 20,000 inthe USA)

Land Higher land acquisition cost in Europe (vs. underground belong to theproperty owner in the US)


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USA Shale gas economical advantagesEXHIBIT ES-2: CURRENT AND FUTURE IMPACTS OF SHALE GAS DEVELOPMENT

($MILLION)

Year GrossEconomic Output

ValueAdded

Jobs TotalTaxes

2008 $371 $189 2,247 $68

2009 $989 $561 4,858 $199

2010 $1,161 $658 5,998 $266

2015 $1,874 $1,061 10,604 $5312020 $2,896 $1,639 16,863 $872

Gross Economic Output is the sum of direct, indirect and induced economic

impacts.

Value Added is Gross Economic Output minus intermediate capital and labour. I t is

often considered a more meaningful measure of true economic benefit from an

activity.


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Shale gas reserves in UK (Bowland-Hodderformation)

Factors determining the viability of natural gas developments (IEA, 2011, Are we entering

a Golden Age of Gas?


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Shale gas cost scenarios in Europe

Unconventional Gas: Potential Energy Market Impacts in the European Union

European Commission 2012


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http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209305/DECC_BGS_BowlandShaleGasReport_MEDIA_SUMMARY.pdf

Projecting the economic impact of marcellus shale gas development in west

virginia: a preliminary analysis using publicly available data 402/033110 final

report march 31, 2010 netl Contact: Anthony M. Zammerilli General Engineer Office

of Systems Analyses and Planning National Energy Technology Laboratory
http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209305/DECC_BGS_BowlandShaleGasReport_MEDIA_SUMMARY.pdfhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209305/DECC_BGS_BowlandShaleGasReport_MEDIA_SUMMARY.pdfhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209305/DECC_BGS_BowlandShaleGasReport_MEDIA_SUMMARY.pdfhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209305/DECC_BGS_BowlandShaleGasReport_MEDIA_SUMMARY.pdfhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209305/DECC_BGS_BowlandShaleGasReport_MEDIA_SUMMARY.pdfhttp://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/http://breakingenergy.com/2013/08/06/how-much-does-a-shale-gas-well-cost-it-depends/


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Present situation ofshale gas


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USA leader in shale gas commercialextraction (some key figures) Shale gas had grown to 27% of U.S. natural gas production by 2010; it is currently 34%

and will reach 43% in 2015 and more than double by 2035 to 60%.

In 2010, the shale gas industry supported more than 600,000 jobs; by 2015 the totalwill likely grow to nearly 870,000 and to more than 1.6 million by 2035

Nearly $1.9 trillion in cumulative capital investments are expected to be made between2010 and 2035.

Annual capital expenditures, especially strong in the early years, will grow to $48.1billion in 2015.

The shale gas contribution to the U.S. gross domestic product (GDP) was more than$76.9 billion in 2010; in 2015 it will be $118.2 billion and will triple to $231.1 billion in2035

Over the next 25 years, the shale gas industry will generate more than $933 billion intax revenues for local, state and the federal governments

Shale gas production has more than doubled the size of the discovered natural gasresource in North Americaenough to satisfy more than 100 years of consumption atcurrent rates.


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Shale gas prospective in Europe

Oil d i


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Poland,next Norway?Oil and gas invethe region in amthe fall of the Begiant Royal Dutcand ConocoPhillacquired explora

Poland has gexploration licenfirms such as Chand Marathon Oi

Exxon Mobil de

market.

The countrys government legislation for development ofexpecting to start natural ga2014

J 2013 th


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UK situation Bowland shaleJune 2013, theSurvey estimatewithin the BowlBritain to be witTCF to 2281 Testimate of 1,32

(37,600 km3

but was not estthe gas was likely

U.K. governmentposition, with theshale gas extract

Department of EChange are in do

Nevertheless UK seems to be makshale gas extract


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France - huge potential, but

US Energy Information Administration study - France has technicallyrecoverable reserves of 3.8 trillion cubic metres (137 trillion cubic feet).

EIA's survey of 14 European countries, France was second only to Poland in itslevel of shale gas deposits, and significantly larger than the closest reserve of1.4 trillion cubic metres (51 trillion cubic feet) in Romania.

BUTFrance banned fracking in 2011 and cancelled exploration licences held bycompanies including Schuepbach and Total SA, the country's biggest oilcompany, after protests by environmental groups.


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Legal constraints


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France

Schuepbach EnergyLLC, a Dallas-based explorer, complained to the court that the lawwas unfair after having two exploration permits revoked because of the ban. President

Franois Hollande has said France won't allow exploration of shale gasenergy even asthe country seeks to reduce its reliance on nuclear energy and keep down costs for

consumers.

"It's a judicial victory but also an environmental and political victory," French

environment minister, Philippe Martin, said today after the ruling. "With this decision

the ban on hydraulic fracturing is absolute."

The technique, which involves blasting a mixture of water, sand and chemicals

underground to release oil and gas from shale rock, has raised the ire of environmental

groups who fear groundwater contamination.
http://www.theguardian.com/environment/energyhttp://www.theguardian.com/environment/gashttp://www.theguardian.com/environment/gashttp://www.theguardian.com/environment/energy


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UK The British Government has rejected shale gas technology as a solution to

Britains energy crisis, conceding it will do little to cut bills or keep the lightson.

Supporters of the fracking technology which blasts water, sand andchemicals at extreme pressures to release gas trapped deep in rock argue itcould be the single greatest factor in transforming Britains energy market,reducing our reliance on foreign imports and dramatically reducing costs.

But The Independent on Sunday has learned that industry experts made clearat a meeting attended by senior ministers, including David Cameron and EdDavey, the Lib Dem energy secretary, that the UKs reserves were smallerthan first thought and could be uneconomical to extract.

Now senior coalition figures have agreed that shale gas has the potential tobe deeply controversial without securing major benefits in lowering carbonemissions or reducing energy costs.

Keynsham Town Council have unanimously voted NO! to UK Methanesplanning application, which is a fantastic success and a big part of thepuzzle.The next stage is now for B&NES Planning Committee to vote on theplanning application at their Development Control Committee Meeting.Currently it is on the agenda for the 21st Nov but may be pushed back toDecember or maybe even January.


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Czech republic

May 11, 2012: The Czech Republic is considering a moratorium on fracking. Themoratorium would last two years ad would give the Czech environmental ministry time to

determine what regulations should be in place for gas drilling and hydraulic fracturing.

3rd September 2012 PRAGUE The Czech government has proposed a temporary ban on

shale gas exploration until a new law is passed that would address extracting the new

energy source.

Environment Minister Tomas Chalupa said Monday the current law is insufficient and a

moratorium till the middle of 2014 would give authorities time to propose legislation that

would take into account the current technologies and their environmental impact.

The government is expected to discuss the proposal next month.


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Bulgaria

18 January 2012:Bulgaria has become the second European country after Franceto ban exploratory drilling for shale gas using the extraction method calledfracking.

Bulgarian MPs voted overwhelmingly for a ban on Wednesday, following big streetprotests by environmentalists. Bulgaria has revoked a shale gas permit granted toUS energy giant Chevron.

17th May 2012: Temporary Parliamentary Commission for study, analysis anddiscussion of best practices and regulatory solutions for exploration and mining hasdecided at its meeting today that the moratorium on exploration and extraction ofshale gas has to drop some of the provisions. Environmentalists have threatenednew protests.

The Bulgarian minister of economy, Delyan Dobrev, commented on the adoptedchanges in the shale gas moratorium stating that the moratorium shall remain, aslong as the people are not properly assured that shale gas production does notpose a threat to them or the environment.

14th June 2012 Bulgarias 41st National assembly passed an Act to ban fracking inall its forms in all its territory including testing and exploration and has absolutelybanned any kind of extraction using the pumping of water or gel or anything intothe ground. The partial bans, and condititional moratorium was not enough foractivists who succeeded in persuading the Assembly that an absolute ban wasneccessary.


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References

1. www.energytomorrow.org

2. www.pamarcellus.com

3. http://keeptapwatersafe.org/global-bans-on-fracking/
http://www.energytomorrow.org/http://www.pamarcellus.com/http://www.pamarcellus.com/http://www.energytomorrow.org/

Documents

Shale gas situation in Europe