Power Plays: Drillers Eye Huge Appalachian Gas Field

WORLD ENERGY WATCH

1//Examiner.com, US (Dallas, TX)
DRILLERS EYE HUGE APPALACHIAN GAS FIELD

More than a mile beneath an area of Appalachia covering parts of four states lies a mostly untapped reservoir of natural gas that could swell U.S. reserves. Geologists and energy companies have known for decades about the gas in the Marcellus Shale, but only recently have figured out a possible - though expensive - way to extract it from the thick black rock about 6,000 feet underground. Like prospectors mining for gold, energy executives must decide whether the prize is worth the huge investment. "This is a very real prospect, very real," said Stephen Rhoads, president of the Pennsylvania Oil and Gas Association. "This could be a very significant year for this." The shale holding the best prospects covers an area of 54,000 square miles, from upstate New York, across Pennsylvania into eastern Ohio and across most of West Virginia - a total area bigger than the state of Pennsylvania. It could contain as much as 50 trillion cubic feet of recoverable natural gas, according to a recent study by researchers at Penn State University and the State University of New York at Fredonia. The United States produces about 19 trillion cubic feet of gas a year, so the Marcellus field would be a boon if new drilling technology works, Penn State geoscientist Terry Engelder said. "The value of this science could increment the net worth of U.S. energy resources by a trillion dollars, plus or minus billions," he said. ... One of the main players in Pennsylvania, Range Resources Corp. (RRC, News) of Fort Worth, Texas, has roughly 4,700 wells statewide - though it's the results from five new horizontal wells in southwestern Pennsylvania that have company executives especially hopeful. The company, in a December financial report, estimated that two horizontal wells are producing roughly 4.6 million cubic feet of gas per day. Tests on an additional three recently completed horizontal wells showed potential for a total of 12.7 million cubic feet of gas per day. Industry experts call those results promising. "We're extremely encouraged. We see many viable parts of the Marcellus that will be commercial," said Range Senior Vice President Rodney Waller. Yet he cautioned it was still too early to determine how successful the venture could be because of limited data. ... The upfront money may give some pause to prospectors. A typical well that drills straight down to a depth of about 2,000 to 3,000 feet costs roughly $800,000. But in the Marcellus Shale, Range and other companies hope a different kind of drilling might yield better results - one in which a well is dug straight down to depths of about 6,000 feet or more, before making a right angle to drill horizontally into the shale. That kind of well could cost a company $3 million to build, not counting the cost of leasing the land, Engelder said. So the multimillion-dollar question is whether that technology can consistently release the gas from the layer of rock hundreds of millions of years old.

2//Brazzil.com, US
BRAZIL'S POLITICIANS SET TO CASH IN ON OIL AND GAS DISCOVERIES

As if Brazil was not blessed with a bounty of natural resources it seems that God has decided to help his favorite nation once again by unveiling his latest gifts - massive reserves of oil and gas. The state-owned oil company Petrobras announced on January 21 that it had discovered huge offshore gas reserves which could be as large as the oil resources it discovered in November at the nearby Tupi field, which are estimated at five to eight billion barrels. This means that Brazil is on its way to becoming one of the world's leading oil and gas producers. Brazil is already self-reliant in oil and when the natural gas is flowing in 2014 it will no longer depend on Bolivia. Ironically, this good news comes amidst fears of energy rationing this year as the country's current power resources cope to meet with the rising demand from a growing economy. This latest announcement is excellent news for Brazil and shows once again how this country could become one of the most prosperous countries in the world if it could free itself from the shackles which are holding it back. These shortcomings include needless poverty, an inefficient educational system, endemic corruption, a tolerance for law-breaking and an ungainly political system. ... It has an entrepreneurial class, particularly in the south and southeast, as dynamic as anywhere in the US or Asia. Its bigger companies, like Vale, Petrobras, Gerdau and Votorantim have become multinationals with a growing presence abroad. It has no problems with minorities and no separatist movements. Its people have a genuine shared patriotism regardless of their racial or ethnic origin. Yet despite this, Brazil is still far from realizing its potential. One of the main reasons for this is the political system. ... The main handicap in making real change lies in the weakness of the party system. Brazil has around 30 registered parties of which 20 are represented in the House of Representatives at the time of writing. Since only a handful of parties are genuinely national, such as Lula's PT, Cardoso's PSDB and the PMDB - it is practically impossible for the government to have a majority in Congress. This leads to awkward coalitions in which some parties need to be given sweeteners or even bribes, as was the case in the "mensalão affair" uncovered in 2005, to support the government. We are seeing a good example of the weakness of this system in the recent appointment of a new energy and mines minister, Edison Lobão. Although the country is facing an energy crisis, Lobão has absolutely no qualifications for the job. The only reason he got it was because he is a member of the PMDB which is one of Lula's "allies". It has insisted on his appointment so it can gain the patronage associated with controlling a ministry. This is what leads, in turn, to the diversion of state resources and funds to parties and individuals and contributes to the corruption which is the rule rather than the exception.

3//The Toronto Star, Canada
OIL SANDS CURBS COULD COST ONTARIO JOBS

A defiant Alberta premier warned that Canada's economy, already on the verge of a slowdown, will be further hurt if his province is forced to move quicker on reducing greenhouse gas emissions. ... Alberta announced last week that it plans to reduce its carbon dioxide emissions to 14 per cent below 2005 levels by the year 2050. That target is well short of those of other provinces and even short of the goal announced by the Stephen Harper government, to reduce national greenhouse gas emissions by 65 per cent by 2050. But Stelmach ... said Canada's economy is dependent on his province's output through the oil sands. "In order to race everyone and immediately produce a reduction in greenhouse gas emissions, that would mean a total shutdown of the oil sands," said Stelmach. "We would lose a considerable amount of investments. That's jobs in the Maritimes, contracts in Quebec and Ontario." The other premiers, while arguing for a forceful response to the looming environmental threat posed by global warming, were careful not to gang up on Stelmach. "This is a forum on climate change and not a forum to beat up on Alberta," said Yukon Premier Dennis Fentie. Ontario Premier Dalton McGuinty said somebody at some point has to assert a greater national interest in the face of a global challenge. "It's not up to me to pass judgment on what Ed is doing," he said.

4//EUObserver.com, Belgium
EU DEFENDS CONTROVERSIAL BALTIC GAS PIPELINE

EU energy commissioner Andris Piebalgs has defended controversial plans to build a gas pipeline beneath the Baltic Sea, connecting Russia and Germany, amid growing environmental concerns over the project. "Nord Stream is definitely a project of European interest", Mr Piebalgs said on Tuesday (29 January), adding that it "would enhance the EU's security of supply bringing additional gas through a new route." The commissioner was speaking at a public hearing organised by the European Parliament in response to concerns over the pipeline's impact on the Baltic Sea. According to Krzysztof Maczkowski, a Polish national and a petitioner campaigning for a land alternative, the proposed natural gas pipeline could disturb WWII chemical weapons dumped in the Baltic Sea and endanger public health as well as flora and fauna in all coastal states in the region. Radvile Morkunaite, a Lithuanian citizen representing non-governmental activists, urged the EU to "take responsibility" and guarantee that there be an independent analysis of Nord Stream's effect on the environment. EU environment commissioner Stavros Dimas said the project should respect all the environmental rules set out by the bloc's body of law.

Mr Piebalgs agreed that the environmental impact of this project must be thoroughly assessed, saying it was "probably the most important issue today." But at the same time, he pointed to a number of advantages that the project could deliver, such as its capability to address the union's energy needs. ... Currently, Russia is the EU's primary gas supplier. The country provides the EU with almost 150 billion cubic metres of gas, representing roughly 40% of Europe's imports and 30% of the bloc's consumption. The Baltic pipeline is to follow a route from Russia to Germany, bypassing the traditional transit countries such as Poland and the Baltic states. Moscow has in the past complained about gas theft from transit countries, particularly Ukraine, as well as about the costs of transit fees. ... Meanwhile, Poland, another critic of the project, is reportedly working on an alternative plan to be suggested to Moscow and Berlin. "We are preparing a report on the transport of gas via a land route, which is simpler, less expensive and more secure. The prime minister will take this report with him to Moscow," spokesperson of Polish economy ministry Piotr Zbikowski told AFP on Tuesday.

5//The Independent, UK
ONLY THREE SUSTAINABLE HOMES BUILT IN UK SO FAR

Gordon Brown's dream of "eco-towns" with tens of thousands of homes powered by wind and solar power has failed to grip the public's imagination. Officials have confirmed that only three low-carbon homes are being built in the UK. The Prime Minister made the plan for 100,000 sustainable homes a key element of his pitch for the Labour Party leadership last summer. But individuals have failed to match the Government's enthusiasm for cutting household emissions. Only three households have taken advantage of a tax-break for all new zero-carbon homes, the Treasury revealed last week.

Copyright 2008, Gloria R. Lalumia

WORLD ENERGY WATCH

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