



Kerry’s Shale Gas Bluff
by Chip Northrup on April 22, 2014
The White House and State Department have engaged in brazen lying to EU governments regarding the ability of the US to supply more than enough natural gas to replace Russian gas deliveries. Recent statements by US President Obama and Secretary of State John Kerry about supplying Europe with gas are patently false. Europe’s best alternative supply of gas is from the Mideast – via Syria. US LNG exports would go to Asia or South America, where they’d fetch twice what they would in Europe.
Everybody in the industry knows that Kerry is bluffing about shipping fracked US shale gas to Europe. It’s just political rhetoric to justify permitting LNG terminals to ship gas to Asia and South America. Imagine that.After his recent meeting with EU leaders Obama issued the incredible statement that the secret Transatlantic Trade and Investment Partnership (TTIP) that is being secretly negotiated behind closed doors by the major private multinational companies would make it easier for the United States to export gas to Europe and help it reduce its dependency on Russian energy: “Once we have a trade agreement in place, export licenses for projects for liquefied natural gas destined to Europe would be much easier, something that is obviously relevant in today’s geopolitical environment,” Obama stated.
That bit of political opportunism to try to push the stalled TTIP talks by playing on EU fears of Russian gas loss after the US-orchestrated Ukraine coup of February 22, ignores the fact that the problem in getting US shale gas to the EU does not lie in easier LNG licensing procedures in the USA and EU.
In other recent statements, referring to the recent boom in unconventional US shale gas, Obama and Kerry have both stated the US could more than replace all Russian gas to the EU, an outright lie based on physical realities. At his Brussels meeting Obama told EU leaders they should import shale gas from the US to replace Russian. There is a huge problem with that.
Shale revolution a failure
Number one, the “shale gas revolution” in the USA has failed. The dramatic rise in US natural gas production from “fracking” or forcing gas out of shale rock formations is being abandoned by the largest energy companies like Shell and BP as uneconomical. Shell has just announced a huge reduction of its exposure to US shale gas development. Shell is selling its leases on some 700,000 acres of shale gas lands in the major shale gas areas of Texas, Pennsylvania, Colorado and Kansas and says it may have to get rid of more to stop its shale gas losses. Shell’s CEO,Ben van Beurden stated, “Financial performance there is frankly not acceptable … some of our exploration bets have simply not worked out.”
A useful summary of the shale gas illusion comes from a recent analysis of the actual results of several years of shale gas extraction in the USA by veteran energy analyst David Hughes. He notes, “Shale gas production has grown explosively to account for nearly 40 percent of US natural gas production. Nevertheless, production has been on a plateau since December 2011; eighty percent of shale gas production comes from five plays, several of which are in decline. The very high decline rates of shale gas wells require continuous inputs of capital—estimated at $42 billion per year to drill more than 7,000 wells—in order to maintain production. In comparison, the value of shale gas produced in 2012 was just $32.5 billion.
So Obama is either being lied to by his advisers on the true state of US shale gas supplies, or he is willfully lying. The former is most likely.
The second problem with the US “offer” of gas to the EU to replace Russian gas is the fact that it requires massive, costly infrastructure in the form of construction of new Liquified Natural Gas terminals that can handle the huge LNG supertankers to bring it to similar huge LNG terminal harbors in the EU.
The problem is that owing to various US laws on export of domestic energy and supply factors, there exist no operating LNG liquefaction terminals in the US. The only one now under construction is the Sabine Pass LNG receiving terminal in Cameron Parish, Louisiana, owned by Cheniere Energy, where John Deutch, former CIA head, sits on the board. The problem with the Sabine Pass LNG terminal is that most of the gas has been pre-contracted to Korean, Indian and other Asian LNG customers, not to the EU.
The second problem is that even were a huge port capacity installed to satisfy EU gas needs to replace Russian supplies, that would push domestic natural-gas prices higher and cut short the mini-manufacturing boom fueled by abundant, cheap shale gas. The ultimate cost to EU consumers of US LNG would have to be far more than current Russian gas pipelined over Nord Stream or Ukraine. The next problem is that the specialized LNG supertankers do not exist to supply the EU market. All this takes years, including environmental approvals, construction time, perhaps seven years on average in best conditions.
The EU gets some 30% of its gas, the fastest-growing energy source there, from Russia today. In 2007, Russia’s Gazprom supplied 14 percent for France, 27 percent for Italy, 36 percent for Germany, with Finland and the Baltic states receiving as much as 100 percent of gas imports from Russia.
In the short term, the EU has no realistic alternative to Russian gas other than from the Mideast via Syria or Iran. Which is what the Syrian Gas Pipeline war is all about.
In short, the chimera of shutting Russian gas and turning on US gas instead is economic, energy and political nonsense.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics , exclusively for the online magazine New Eastern Outlook
White House Lies to EU about US Gas Supply | New Eastern Outlook/
Ukraine Gas Pains
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Peak Shale Gas Proves As Wrong As Peak Oil
Since the beginning of the shale gas boom, there have been skeptics and uncertainties, which is hardly surprising for a new type of production. How much could be recovered, what were the costs, could processes be transferred from one shale to another, and especially, what impact would high production decline rates have. Quite a bit of analysis has been done by any number of companies and scholars (broadly speaking), and many of the worries have been dismissed, not least because of continuing increases in production and an apparent ceiling on prices near $5/Mcf.
Some continue to sound alarms, however, and it seems worth revisiting them. For one thing, shale gas was described as a “bubble,” which, after the 2008 financial collapse, causes some fear and trembling on Wall Street. Stories of high debt levels and companies selling off leases and reserves have provided some ammunition to such claims. Analysts like Arthur Berman and Bill Powers have made particularly apocalyptic projections.
On closer inspection, this seem clearly to fall into the “chicken little” school of petroleum supply forecating. (Arthur Berman is an actual member of the peak oil school, which doesn’t give one confidence in his lack of bias.) Aside from his insistence that the price needed to be about $6/Mcf, which is hardly unreasonable, he has predicted a huge decline in production that has not occurred as of yet. (Author’s note: see his comment below.)
Especially by relying on decline rates at individual wells, he calculated that every year 22 bcf/d of production needed to be replaced just to maintain production at flat levels. [1] Yet after prices dropped to $1.89/Mcf in 2012, and rigs drilling for gas dropped from 933 to just over 300 now, production actually continued increasing, rising another 8% in two years. Either the production technology has increased phenomenally or his calculations are flawed (possibly a combination).
Bill Powers, for his part, argued that shale gas reserves are grossly estimated, amounting to a five-to-seven year lifespan (that is, of total production, not just shale) instead of the 100 years that the EIA estimated. And he argues that we face“a gas crisis, a supply crunch that will lead to much higher prices similar to what we saw in the 1970s” [2]
Now granted that it’s only been two years since he said that, but if shale gas were so limited, we should be seeing some strong negative effects in production or well productivity. Instead, the opposite is happening, again implying analytical shortcomings.
Peak Shale Gas Proves As Wrong As Peak Oil - Forbes
Globalizzazione..... si grazie.


Bene, allora da una prima veloce lettura si da il gas shale come una bufala, con 7-8 anni di vita residua, e soprattuto la necessita' di rimpiazzare con sempre nuovi pozzi il rapido declino che avviene dopo pochi anni.
Poi se nell'articolo si dice che questo non sia vero, senza spiegare il perche' e il percome allora io dico
Evvero....eccomesee'vvero!
Il gas shale sara' una bollona epocale e lo sappiamo tutti che Pupi Amati ha delle posizioni scoperte di titoli e che ha investito tutti i soldi rub...ops me$$i da parte nel famoso campo a gas di vattelapesca credendo di decuplicare l'investimento, mentre ora si limita a l'e' ciapa' in tel del cül!!!!
prossimamente verra' anallizzata riga su riga l'articolo postato dal neo convertito Pupi al no shale gas...era ora!
Ultima modifica di animal; 16-08-14 alle 18:48
Possiamo concludere che tutto il peggio che succede in Italia e' dovuto alle elites PD ed al vaticano?
Stupri, attentati, invasione, fallimenti, disoccupazione, emergenza sociale, denatalita',violenza verbale , suicidi, omicidi....


Comprensione del testo come sempre sotto la sufficenza, infatti lei dice:
"Poi se nell'articolo si dice che questo non sia vero, senza spiegare il perche' e il percome"
Quando invece spiega.... nell parte centrale del testo.
Cosi come lei afferma:
"da una prima veloce lettura si da il gas shale come una bufala, con 7-8 anni di vita residua"
Quando invece l'articolo riporta le opinioni di due noti "Bollisti", le cui previsioni sono nel primo caso smentite dai fatti, e nel secondo non vi e' nessuna indicazione che siano corrette.
Ma lei... SA LEGGERE?
Oddio forse non sapra' l' Inglese ed e' vero che i traduttori online a volte scazzano un poco, quindi in questo caso ha il beneficio del dubbio... ma poi pero' mi viene il dubbiuo, dato che tali erorri di comprensione del testo li fa anche quando posta in Italiano, ergo ripongo la domanda... ma lei, SA LEGGERE?
Globalizzazione..... si grazie.


insomma per i trafficanti e venditori di fumo, ormai in carenza di o$$igeno tutti quelli che hanno idee contrarie sono bollisti....
non sara' che invece ormai tra voi ameriCani ed euristi siete all frutta, e vi brucia il culo all'idea di perdere l'o$$o quotidiano che vi lanciano gli euro parrucconi nonche' pedofili????
Possiamo concludere che tutto il peggio che succede in Italia e' dovuto alle elites PD ed al vaticano?
Stupri, attentati, invasione, fallimenti, disoccupazione, emergenza sociale, denatalita',violenza verbale , suicidi, omicidi....


Appunto prendiamo spunto da questa affermazione e analizziamo quello che dice "Animale".
in 5 anni il bluf shale gas finira' e per gli U$A sara' la fine
Dunque tra 5 anni lo "shale finira" .
Un affermazione priva di senso, perche lo "shale" e' legato ad tecnica o meglio una insieme di tecniche che rendono oggi conveniente l'estrazione del gas e del petrolio.
Il gas e il petrolio che ci sono in quantita enorme.
Ma la questione che "Animale" non ha compreso e' che lo "shale" non c'entra una mazza!
C'entra la capacita di inventare tecnologia che aumentano la produttivita. E questo ha reso possibile lo sfruttamento di questi giacimenti.
In altre parole il peso economico degli USA sta proprio in questo processo di creativita!
Di conseguenza anche ammesso che tra "5 anni lo shale finira" (come lui "pronostica!), stai tranquillo che gli yankees avranno inventato un altra "filiera" produttiva-tecnologica da sfruttare.....cosi come successo con le auto, i frigoriferi, le televisioni, il computer, l'energia nucleare, l'aeroplano, i satelliti, i razzi.......e via dicendo.
Tutte invenzioni e innovazioni made in USA o che hanno trovato nell'industria americana un potente motore di perfezionamento e diffusione.
"Animale" mi dispiace per te, ma non hai capito una mazza.


Sneuronato, ho scritto "Bollisti", non ballisti... Bollisti nel senso che appunto "predicano" che vi sia una bolla....
In ogni caso, lei ha, nuovamente, dimostrato che e' incapace di comprendere un semplice testo, lei ha una comprensione del testo a lviello di scuole elementari, e sono buono.
Globalizzazione..... si grazie.


vedo che Paul incomincia anche a lui ad entrare nell'ottica che il gas shale finira' in 5 anni.
Senza sapere che magari ne apriranno in polonia, in francia, nell'ohio di altri giaciemnti, ma ben consci che dopo 7-8 anni plufffff
si ammoscia come il chips installato tra les cojones de los ameriCano$
Possiamo concludere che tutto il peggio che succede in Italia e' dovuto alle elites PD ed al vaticano?
Stupri, attentati, invasione, fallimenti, disoccupazione, emergenza sociale, denatalita',violenza verbale , suicidi, omicidi....