Gas & Coal to Liquids: Trillions of Barrels of Fuel On the Way

There is always big money to be made in substituting a lower cost feedstock or commodity for a higher priced one. The obvious big money substitution opportunity in the energy field, is the substitution of low cost natural gas or coal for high priced oil. Natural gas is difficult to transport globally, unless it is transformed into a denser liquid form, such as LPG or GTL. Coal can likewise be made more valuable by transforming it into a liquid fuel. Observe the huge potential quantities of fuels available from coal to liquids and gas to liquids in the chart above.

Gas to Liquids 

NYTThe above chart reveals the significant price differential between oil and the equivalent energy of natural gas. Clearly there is a lot of money to be made via efficient conversion of gas to liquids (GTL), via either Fischer Tropsch (FT) or methanol-to-gasoline (MTG).

Shell's gas-to-liquids (GTL) technology is producing high value hydrocarbon fuel and chemicals in Qatar and in Malaysia. But it is very expensive to build large scale GTL plants based on this technology, which limits entry into the field. As the technology proves itself in the market, other big players are likely to step in.

Sasol and PetroSA have GTL plants in South Africa, where rich shale gas fields are coming under development. Shell is moving into those gas fields, and may be thinking about opening its own GTL plant in South Africa, if it can deal with the government corruption.

applications of excess product. Primarily, natural gas is used as feedstock for the Gas To Liquid process. The GTL process converts natural gas to synthetic fuels. This has proven to be far more profitable product for oil/energy and exploration companies to supply into the energy markets. There are currently only two plants in SA capable of refining natural gas to liquid petroleum products. Sasol has its GTL plant located in Secunda and PetroSA has its plant in Mosselbay. _CBN

Australian companies are looking at building GTL plants to take advantage of large gas deposits there, but are somewhat daunted by the high cost of entry. The uncertainty of long term oil prices also causes planners to hesitate.

"Higher oil prices provide the incentive to look at ways and means of producing synthetic fuels, other than simply refining crude oil," Mr Wendt told AAP.


However, he says a major barrier is the high price of setting up a processing plant to make a product that is a commercial alternative to oil-based fuels.


It would cost $1 billion or $2 billion to build a plant that produces synthetic diesel at $40 or $50 a barrel.


But if the price of oil drops dramatically, people won't buy the synthetic product, leaving the owner of the plant unable to get a return on the investment, Mr Wendt said. _ninemsn

There is also debate in Alaska about turning North Slope gas into more lucrative liquid fuels. One of the problems is deciding on the best chemical approach to the transformation of gas to liquid fuel.

For a number of years there has been discussion of the potential to convert North Slope gas to diesel fuel on the North Slope using a process called gas to liquids, or GTL, and then shipping the diesel fuel down the trans-Alaska oil pipeline. The core of the GTL process is the Fischer-Tropsch synthesis, a chemical process first used in Germany in 1936 to produce synthetic liquid fuel. However, a study of the relative costs of the Fischer-Tropsch process and MTG has indicated that it is significantly cheaper to produce a given volume of fuels with MTG than with Fischer-Tropsch, while the gasoline produced from MTG has a higher value and quality than the diesel from GTL, Van Wijk said. _PetroleumNews

The Oxford Catalyst microchannel Fischer Tropsch GTL approach is just getting started, commercially, but is already receiving "buy" recommendations from Charles Stanley -- assuming the investor possesses abundant intestinal fortitude and staying power.

One of the largest driving forces behind the drop in natural gas prices -- and the opportunity to take advantage of the gas-oil price differential -- is the recent advances in horizontal drilling and hydraulic fracking technologies. Gas and oil trapped within shale has existed for eons, only waiting for a species intelligent enough to go in and get it.

Summary of gas-to-liquids technologies

Coal to Liquids 

Synthetic fuels from coal will compose a larger share of the transportation fuels market over the next few decades. This will come about due to more economical processes for coal to liquids (CTL) combined with a long term trend of rising oil prices.

Ambre Coal to LiquidsThe methanol-to-gasoline (MTG) process is the prime competitor to the Fischer Tropsch (FT) process, in the conversion of carbonaceous mass to liquid fuels. Ambre Energy of Australia is involved in the clean conversion of low quality coal to high quality liquid fuels, using the Exxon-Mobil methanol-to-gasoline process (PDF).

Methanol is usually synthesised from syngas, a mixture of H2, CO, CO2, methane, etc. Syngas can be produced via gasification of coal, natural gas, biomass, or any other carbonaceous material.

Methanol is used as a feedstock to produce fuels or other chemicals. Methanol can also be used as a fuel itself, or as a fuel additive. Methanol is also finding greater use in methanol fuel cells -- a market that is expected to grow very rapidly over the next several years.

Ambre CTL process
PDF description of Ambre CTL
Ambre is involved in a technical study agreement with Synthesis Energy Systems to develop an improved coal to liquids project which will produce both synthetic gasoline and LPG from methanol.

Economical Scaling of Fischer Tropsch 

Up until now, putting together a production plant for converting coal to liquids or gas to liquids would cost you around $1 billion. But the North American subsidiary of a UK company has devised a scalable method of converting syngas to liquid hydrocarbon (diesel) in a "shoebox" sized device. The microchannel Fischer-Tropsch (FT) devices can be combined for a capacity to produce as much or as little diesel fuel from gas, biomass, or coal, as a producer wishes to pay for.

...a major exploration and production company is seriously considering the possibility of incorporating microchannel FT reactors into a planned 5,000 -15,000 barrel per day (bpd) GTL facility onshore in North America designed to convert shale gas into finished synthetic fuels...The shortlisted technologies will be subjected to further evaluation as part of a major high-budget engineering study that will last for several months. The results of the study will be used to select the project’s technology providers. _Engineer

Oxford Catalyst's microchannel F-T technology for converting gas-to-liquids (GTL) is one of the frontrunners to be intensively studied for shale gas to liquids operations onshore in North America.

The technology is already being adopted for offshore applications in Brazil.

PDF presentation on Velocys / Oxford Catalyst's microchannel F-T technology

Microchannel FT reactors developed by Velocys and using a new highly active FT catalysts developed by Oxford Catalysts exhibit conversion efficiencies in the range of 70% per pass, according to Jeff McDaniel, Oxford Catalysts director of commercialisation.


“The high efficiency and modular nature of our microchannel FT reactors makes them particularly useful for this type of application because capacity can be easily increased by simply ’numbering up’ or linking together additional FT reactor modules,” said McDaniel. _Engineer

The potential fuels available from unconventional liquids goes far beyond all known petroleum deposits. And of course, proved deposits of oil, gas, coal, kerogens, bitumens, etc. are only going to continue going up over time, as they have done since humans began using hydrocarbons.

It is time for humans to jettison pseudoscientific garbage theories such as anthropogenic climate doom and peak energy scarcity doom, and move forward into a world of abundant energy.

Nuclear energy such as advanced fission and scalable fusion are much preferred to hydrocarbon energy in general, but we need to pay as we go. Hydrocarbons will serve until we can break through to better energy strategies.

Material above taken from previous postings at Al Fin Energy blog

Trading US Gas for Canadian Oil

Energy and Capital
Canada needs US natural gas to help produce its bitumen oil sands. As oil sands production ratchets up from 1.5 million barrels per day to 5 mbpd by 2020, Canada's demand for US gas should continue to rise.

The emergence of shale gas over the last six years has fueled our hopes that we'll be able to safely transition away from our oil addiction.

Not only do we have an abundance of it trapped in the various shale formations across our country, but developing that resource is inevitable, because we're not the only ones counting on that future supply...

You see, it's not just the United States that's depending on U.S. gas production. Remember Canada's trouble with peak natural gas?

It turns out natural gas exports to Canada have doubled in just five years!

We may be relying heavily on an ever-increasing amount of Canadian crude to meet our oil fix, but Canada's natural gas troubles will only worsen as production from the oil sands grows to more than five million barrels per day in the coming decade. (Natural gas plays a vital role in the extraction process of deeply-buried bitumen.)

Remember, more than three-quarters of Alberta's oil production comes from oil sands operations.

As if that weren't enough, Canada isn't the only country crossing her fingers for more U.S. natural gas. South of the border, Mexico is also relying more on our supply.

U.S. exports to Mexico have also jumped significantly. Prior to 2000, we barely exported any natural gas to either Canada or Mexico. Today's a different story.

Just like Canada, Mexico can't get enough of it...

Last year, natural gas production from the Marcellus averaged 1.3 Bcfe/d. By the start of 2011, production was around two billion cubic feet per day. And this is only the beginning.

Within the next eight years, production is expected to jump more than 775% to 17.5 billion cubic feet per day. In the process, it'll add at least 250,000 jobs and tack on over $20 billion in revenue to Pennsylvania's economy.

We're also expecting the drillers to have a field day. Even though natural gas prices have been lackluster since crashing in 2008, drilling more than doubled in 2010. There are more rigs drilling the formation than ever before...

_EnergyandCapital

Canada has plenty of shale gas too, but for now it is more lucrative to produce oil than gas, given current price spreads. Once the nascent gas to liquids (GTL) industry revs up, prices should slowly converge, and gas will become a more lucrative product.

Cross-posted to Al Fin Energy blog

Choking on Green Malthusian Dogma-Prop

From Paul Erlich's warnings of a population bomb to The Club of Rome's "Limits to Growth," contemporary ecological politics have consistently embraced [leftist] green Malthusianism despite the fact that the Malthusian premise has persistently failed for the better part of three centuries. Indeed, the [capitalist agri-tech] revolution was exponentially increasing agricultural yields at the very moment that Erlich was predicting mass starvation and the serial predictions of peak oil and various others resource collapses that have followed have continue to fail. _Breakthrough.org

One good recent example of frustrated Malthusianism is natural gas supply. Peak oil doomers declared an impending "peak natural gas" throughout the first decade of the 2000s. Even now, in the face of a shale gas bonanza sprouting up over the last few years, the doomers are frantic to justify their Malthusian true faith -- resorting to false claims of rampant water pollution from fracking fluids etc.

Within a year, U.S. recoverable shale gas reserves alone rose from 340 trillion cubic feet to 823 tcf, the Energy Department estimates. That’s 36 years’ worth, based on what the USA currently consumes from all gas sources, or the equivalent of 74 years’ of current annual US oil production. The reserves span the continent, from Barnett shale in Texas to Marcellus shale in Eastern and Mid-Atlantic states – to large deposits in western Canada, Colorado, North Dakota, Montana and other states (and around the world).

Instead of importing gas, the United States could become an exporter. The gas can move seamlessly into existing pipeline systems, to fuel homes, factories and electrical generators, serve as a petrochemical feedstock, and replace oil in many applications. States, private citizens and the federal government could reap billions in lease bonuses, rents, royalties and taxes. Millions of high-paying jobs could be “created or saved.” Plentiful gas can also provide essential backup power for wind turbines.

...Environmentalists voiced alarm. HBO aired “Gasland,” a slick propaganda film about alleged impacts of fracking on groundwater. Its claims have been roundly debunked (for instance, methane igniting at a water faucet came from a gas deposit encountered by the homeowner’s water well – not from a fracking operation). A politically motivated Oscar was predicted, but didn’t happen.

The Environmental Protection Agency revealed a multiple personality disorder. Its Drinking Water Protection Division director told Congress there is not a single documented instance of polluted groundwater due to fracking. (Studies by Colorado and Texas regulators drew the same conclusion.)

EPA’s Texas office nevertheless insisted that Range Resources was “endangering” a public aquifer and ordered the company to stop drilling immediately and provide clean water to area homes. EPA officials then failed to show up at the hearing or submit a single page of testimony, to support their claims.

Meanwhile, EPA Administrator Lisa Jackson announced plans to conduct a “life-cycle” or “cradle-to-grave” study of hydraulic fracturing drilling and gas production techniques, to assess possible impacts on groundwater and other ecological values. Depending on whether the study is scientific or politicized, it could lead to national, state-by-state or even city-by-city drilling delays, bans – or booms. _MasterResource_via_OilPrice

While scientists argue whether water wells located within a mile of shale gas wellheads contain higher levels than normal of dissolved methane, there has been no evidence of water contamination or public health hazard from fracking fluids. Given the incredible financial wealth potential of shale gas deposits, it makes far more sense to let individual states regulate shale gas fracking. This is particularly true when the US government is controlled by an administration packing an "energy starvation agenda."

Malthusian lefty-Luddite Greens litter the landscape of European capitals, and under Obama have become a national hazard in the US as well. Their extreme alarmist rhetoric and anti-commerce stance threatens economies across the western world.

Human technology and ingenuity have repeatedly confounded Malthusian predictions yet green ideology continues to cast a suspect eye towards the very technologies that have allowed us to avoid resource and ecological catastrophes. But such solutions will require environmentalists to abandon the "small is beautiful" ethic that has also characterized environmental thought since the 1960's. We, the most secure, affluent, and thoroughly modern human beings to have ever lived upon the planet, must abandon both the dark, zero-sum Malthusian visions and the idealized and nostalgic fantasies for a simpler, more bucolic past in which humans lived in harmony with Nature. _Breakthrough.org

Cross-posted to Al Fin Energy

Bringing Biomass to Liquids and Gas to Liquids Down to Size

The Group's technology makes viable the distributed production of fuels from gas biomass, coal and waste. Microchannel processing is emerging at a time of the discovery and development of vast shale gas reserves in North America, increasing focus on the utilization of stranded and associated gas and the emergence of biomass-to-liquids (BTL) and waste-to-liquids (WTL) as a viable option for the sustainable supply of transportation fuel in the decades ahead. In addition, the growing political, geological and environmental complexity of oil exploration and production has focussed attention on the monetization of associated and stranded gas reserves and cessation of flaring, for which distributed GTL is suited, the company says. _GCC

What you see in the image above is a Velocys / Oxford Catalysts microchannel gas to liquids technology. It is an award-winning technology which promises to turn at least 1 billion boe worth of wasted flared natural gas into valuable liquid fuels, each year. Probably considerably more.

The same technology can turn biomass, coal, or any carbonaceous material or waste into valuable liquid fuels. Better yet, Oxford Catalysts is making progress in turning itself from a research group into a commercial company.

The Oxford Catalysts Group has raised £21 million (US$34 million) before expenses from the conditional placing of 26,250,000 new shares, which will be used to accelerate its ongoing transition from a research and development organization to a commercial product company. In particular, additional staff will be hired to support its commercial and manufacturing operation, the Group’s supply chain capabilities will be bolstered and investments will made in development and testing infrastructure.

This is the latest step in the Oxford Catalysts Group’s drive to commercialize its technology for the production of synthetic fuels from conventional fossil fuels and renewable sources such as biowaste, primarily through its microchannel process technology platform which is able to accelerate chemical reactions by 10- to 1000-fold. As a result, microchannel Fischer Tropsch (FT) processes can operate economically when producing just 500 barrels per day of oil equivalent (boe) from a wide variety of carbon-containing wastes, while achieving greater productivities than for conventional FT reactors (earlier post). _GCC

An extra billion boe per year from otherwise-flared natural gas is nothing to sneeze at. Neither is the potential for on-site gtl, btl, and ctl which small portable microchannel-FT units would provide. The rules for fuels are about to change. Peak oil panic will then go the way of the dinosaurs and Y2K willies.

Don't Fear Peak Oil
As you can see, the world is not exactly running out of oil reserves. In fact with amazing breakthroughs in the refining of bitumens from oil sands, global economically recoverable oil reserves are due for another big jump.

All the same, wise people expand their options as much as they feel they need to and can do. See more developments in energy at Al Fin Energy.

This article was published earlier at Al Fin, the Next Level

The Best Defense Against Propaganda Like "Gasland" is to Learn How Things Are Actually Done

26Feb2011 MORE:New Scientist looks at the questionable tactics and claims of Gasland. The New York Times -- lately more of a tabloid rag than a purveyor of accurate news -- makes some new claims about threats of radioactivity released by wastewater from fracking. Time will tell. Certainly the developed world needs the energy and fuel from unconventional hydrocarbons to allow it to bridge into the era of advanced fission, advanced biofuels, enhanced geothermal, fusion, and other advanced nuclear and exotic particle reactions.

This video provides a brief summary of the oil and gas drilling process. If you pay attention over its few minutes, you will know far more about oil & gas production than most of the faux environmentalists who write propaganda pieces and make propumentary films on the topic, meant to sway public opinion.

The Oscar-nominated film Gasland is a fine example of the genre known as "propumentaries", or propaganda as documentary. Michael Moore is a master of the genre, but Josh Fox is certainly up and coming in the field with this entry.

Here is a website devoted to debunking Gasland

Here is a PDF from Gasland's maker meant to debunk the debunking of Gasland, called Affirming Gasland

A further debunking of Gasland can be found here and here and here

It should be said that for most thinking persons, Gasland debunks itself. But the film is not aimed at thinking persons, it is aimed at members of the Idiocracy, programmed by a failed educational system not to think at all. With that audience, the film has apparently succeeded -- since it is nominated for an Oscar.

President Obama's EPA and Interior Department have succeeded in proclaiming CO2 as a "dangerous pollutant" and in stonewalling offshore oil drilling at all costs. Obama's minions have shut down several coal mines and coal power plants. Obama's NRC is dragging its feet on newer, safer, nuclear plants. All forms of reliable energy have been targeted by Obama's regime. If the regime were able to find any significant pretense to pull the plug on shale gas, they would have done so by now. As it is, they are still looking for anything at all substantial they can use to shut down yet another form of energy. Gasland is certainly not that thing, but is rather in the category of a joke. But they are still looking -- hard.

You can bet a large number of overseas gas producers from Russia to MENA are very interested in seeing Obama take action against shale gas producers. Needless to say, lefty-Luddite greens of the dioff.orgy persuasion are likewise eager to intensify the Obama program of energy starvation in the US.

Shale Gas Promise is Real, "Gasland" Is A Fraud

In the US, unconventional gas is providing a much needed energy boost. Over the next 20 years, shale gas is destined to grow from 15% of US gas production to roughly 50% of production.

Contrary to the blatant falsehoods (PDF) displayed in the Oscar-nominated "documentary" Gasland, production of shale gas is as clean or cleaner than production of any other type of non-nuclear energy or fuel.

Extent of Marcellus Shale Resource
Several nations in Europe are growing more interested in their own shale oil resource, and are beginning to drill test wells.

In countries like Britain, Germany and Poland, exploratory drilling is under way, or about to begin, as engineers try to determine how much shale gas is present and how easy it will be to retrieve. New technologies for extracting natural gas from stone have raised worries about contamination of drinking water while also driving a huge drilling expansion in the United States, helping push prices down by two thirds since 2008 and reducing dependence on imports.

Shale gas production accounted for 14 percent of U.S. natural gas production in 2009 and is expected to reach 45 percent by 2035, the U.S. Energy Information Agency estimates.

“It was an amazing story in the U.S., this very rapid increase in the availability of shale gas,” said Paul Stevens, senior research fellow for energy at Chatham House, a London research institute. European exploration has big potential too, he added... _NYT

More on Marcellus Shale -- just one of several huge US gas deposits, now available for production thanks to improved drilling technologies.

Faux environmentalists inside and outside of the Obama regime have sworn to shut down US energy production -- including shale gas -- no matter what it takes. The Obama agenda of "energy starvation" shines through in the regime's offshore oil de facto drilling moratorium, in the shutting down of coal mines and coal power plants, in the attempts to shut down Canadian oil sands imports, in behind-the-scenes moves to shut down US shale gas, and in the Obama Nuclear Regulatory Commission's blatant dragging of its feet on new nuclear designs and plants. The EPA's decision to regulate CO2 -- a keystone to the chain of life on Earth -- as a "dangerous pollutant" is a clear indication that Obama's interests are not dictated by the welfare of humans in the US or anywhere on Earth.

More: From Master Resource, here are some maps for the three main types of unconventional gas resource for the US.

More from Master Resource here and here.  Methane is a compound found on other planets and moons in significant quantities in the outer solar system.  It has also been found to be generated in Earth's mantle abiotically.  Vast quantities of methane clathrates exist beneath seafloors and in arctic regions.  It is unlikely that humans will ever come close to running out of methane -- particularly when it is so easily produced via anaerobic digestion of waste biomass.

We must have fossil fuel resources such as oil, gas, coal, oil sands, etc. in order to give us time to move to more sustainable energy sources such as advanced fission, fusion, enhanced geothermal, advanced biofuels and bioenergy, orbital solar, and perhaps low energy nuclear reaction reactors.

More on energy topics at Al Fin Energy

Contrary to Peak Oil Orthodoxy, Oil Industry Reacts to Prices

Khaled Al Buraik, executive director of the government-controlled Saudi Aramco, announced that new technology could add as much as 2 trillion barrels of oil to global proved reserves.

Although the current global oil reserves in place are estimated at 14 trillion barrels, only about 1.2 trillion can be recovered, said Khaled Al Buraik, executive director of the government-controlled Saudi Aramco.

Speaking at a seminar in Riyadh, Buraik said the quantity of oil extracted so far worldwide does not exceed one trillion barrels.

"Advanced technology in hydrocarbon production could add around two trillion barrels to the existing proven crude reserves in the near future," he said in his address, published by Saudi newspapers on Monday.

"The real challenge for scientists and engineers is how to access to nearly 11.8 trillion barrels to meet the growing world needs of hydrocarbon in the future...what is needed now is more effort by scientists and specialists in this field to invent new methods and very advanced technology." _Zawya

Higher oil prices are spurring oil companies to increase their spending for exploration and production.

Brazil's rich offshore reserves keep growing larger

Brazil announces ambitious new underwater technologies to provide easier access to its vast undersea oil wealth

Liquified Natural Gas (LNG) is a growing component of national energy budgets from Britain to Japan, as a compensatory move against higher oil prices.

A new and ambitious approach to increasing the value of cheap, abundant natural gas, is being advanced by San Francisco startup Siluria Technologies.

Siluria has decided not to go after gasoline or diesel but instead to produce ethylene, a building block for plastics, fertilizers, pesticides, beverage bottles, tires and lots of other materials that are now made from oil. Ethylene can also be turned into alkanes, a class of hydrocarbons that are a component of gasoline.

A more important difference, though, could be the energy needed for conversion from the natural hydrocarbon molecule, methane, to the synthetic one, ethylene. In Siluria’s process, using a new kind of catalyst, that conversion gives off heat instead of requiring it. _NYT

I will present more information on Siluria in the future.

As you can see, advancing technologies will bring about both new proved oil reserves and production, AND new substitutes for crude oil in both fuels and chemical uses. Gas to liquids and LNG are certain to achieve traction for significant scaleup within the next 2 years.

It will take about 20 years for advanced biofuels and small modular fission reactors to get approved, licensed, and scaled up to provide significant quantities of energy and fuels. In the meantime, unconventional hydrocarbons such as shale gas, oil sands, coal to liquids, and heavy oils will scale up to ease the transition. If needed, oil shales and methane clathrates can provide more hydrocarbon energy than all other resources put together.

Taken from an earlier posting at Al Fin Energy

Humans to Terra: Merry Christmas, and Thanks for All the Gas!

Arguably the biggest story in the United States energy scene, and de facto for the rest of the world, has been the development of shale gas. Natural gas production in the United States was flat from about 1995 to 2005, standing at about 2 Tcf per month. But over the last five years, production started going up (see graph) moving to around 2.3 Tcf per month. The entire increase is because of shale gas, contributing at least 17 percent of domestic production. This is remarkable, considering that shale gas accounted for an estimated 2 percent just a few years ago. _EnergyTribune

GeoffreyStyles
The shale gas revolution has hit US and world energy markets like a massive sledge hammer. But the impact of abundant unconventional hydrocarbons has barely registered on the "energy seismic detectors" up until now. Despite the best efforts of carbon hysterics, energy starvationists, and faux environmentalists to put the djinn back in the bottle, Terra's huge and expanding reserves of natural gas can no longer be denied -- and will not be refused.

Geoffrey Styles looks at some interesting aspects of shale gas economics, and explains why airheaded proponents of unreliable wind power are so resentful of shale gas:

Perhaps one reason the impact of cheap natural gas hasn't sunk in yet is that the main market price for gas, the futures price at the Henry Hub in Louisiana, doesn't have much relevance for the average consumer. Residential gas customers don't buy their gas in the million-BTU (MMBTU) lots in which the futures contract is denominated; we buy gas in therms--one tenth of an MMBTU--and by the time we see it on our bills all sorts of handling and distribution fees and mark-ups have been added on. But when you compare the price of traded gas in barrels of oil equivalent (BOE) to the price of West Texas Intermediate crude, the remarkable divergence of the last two years becomes obvious, as shown in the chart above. Between 2000 and 2006 gas and oil tracked each other closely, allowing for the greater seasonal volatility of the former. There were even periods when a barrel-equivalent of gas was worth more than a barrel of oil. Yet while oil and gas prices fell precipitously when the recession and financial crisis burst the various asset bubbles, they have diverged sharply since then, with oil advancing back up to today's $91/bbl and gas settling in to the $20-25/bbl range in which we were accustomed to see oil prices a decade ago. Adjust that for inflation and you're looking at an average natural gas price for 2010 equivalent to $20/bbl in 2000. _GeoffreyStyles

EnergyTribune

In early December, Argentina’s president Cristina Fernandez de Kirchner announced a huge shale gas find that could supply the country’s gas needs for 50 years. A Moroccan delegation has already called upon U.S. shale expertise to help develop its resources. And, speaking at the World Shale Gas Conference in Dallas-Fort Worth in November 2010, Ukraine Government ministers proudly proclaimed their country had “the biggest shale gas deposits in the world”.

Meanwhile, China and India have been quick to spot the game-changing qualities of domestic shale gas development. China’s deposits could exceed 1000 Tcf (Wang and Economides, Paper SPE 133458, 2010.) Last year, China signed the U.S.-China Shale Gas Resource Initiative, the latter already perceiving the U.S. as the world leader in shale gas technology.

That the global energy landscape is switching in favour of gas is also confirmed by developments at the energy majors. In an interview with Fortune magazine, asked about the future strategy of Big Oil, Shell President Marvin Odum stated that by 2012 Shell would be producing more gas than oil. _EnergyTribune

Shale gas has just begun to touch the world's energy balance -- and shale gas is just the beginning of unconventional hydrocarbons. [Editor: Along with oil sands and heavy oils]

Carbon hysterics, energy starvationists, and faux environmentalists hate shale oil and other unconventionals for what such reliable energy sources will mean for the Green crusade of lefty-Luddite dieoff.orgiasm. Even T. Boone Pickens has abandoned loony wind power in favour of unconventional gas.

Cross-posted to Al Fin Energy

Natural Gas -- The Eternal Flame

The world is swimming in hydrocarbons. One modest sign of the richness of shale gas deposits is this waterfall in western New York state, where a natural methane seep provides an eternal flame for hikers. US shale gas has become an amazing economic and geopolitical phenomenon, with money to be made across large swathes of the lower 48 states. Homeowners who heat their homes with gas have also had a lot of reasons to be happier about their energy bills over the past two years or so.

Waterfall photo credit: Jessica Ball, as lovely as she is tough.

Just one of the amazing "gold rush" shale gas deposits in the US will be highlighted in a television documentary on CNBC November 23 2010.

Oil vs Gas MMBTU
Natural gas is significantly cheaper than oil, per unit of heat energy, as seen in the graph above. Someone who could economically convert gas to liquids (GTL) might be able to take advantage of that price difference and make a lot of money.

Robert Rapier recently highlighted the Shell Oil GTL plant in Malaysia, and made reference to the larger Shell GTL plant to be completed in 2011 in Qatar. If the price of oil continues to be much higher than the price of gas -- in energy units -- such GTL conversion plants could well pay off.

Given the large amount of natural gas which is flared into the atmosphere every year, some intriguing new approaches to on-site conversion of GTL at gas wells -- including offshore wells, may offer a profitable income stream for smaller producers and individual wells.

It has been proven that natural gas is constantly being generated deep beneath the Earth's crust -- inside the hot mantle. We do not yet know how much of that gas penetrates into the crust to the point of economic extraction by humans, but it is likely to prove significant, in the opinion of Al Fin energy analysts.