Shale gas

Production, import and export of oil and gas to the United States

Main article: Production, import and export of oil and gas to the United States

Shale companies

2021: Risk of $1.1 billion loss due to failed price hedge

As of August 2021, shale companies face almost $12 billion in losses this year due to an unsuccessful oil hedge. Some companies recorded oil prices at $42 per barrel.

US shale revolution

In the early 1980s, George Mitchell's Father of the Shale Revolution company Mitchell Energy & Development began drilling the Barnett Shale Formation in North Texas (USA), which was considered impenetrable by oil workers. Engineers said that Mitchell was wasting time and money, but he persistently continued what he had begun.

The businessman's company used hydraulic fracturing ("fracking," or fracking) technology for drilling, which was first used back in the late 1940s. Its essence is contentedly simple: a well is drilled, then water with sand and chemicals is pumped under enormous pressure; as a result, the formation "cracks" and releases the template ^[1] inside the gas^[1]

Simple technology seems only in words, in fact, frac is a complex and very costly process. For these reasons, "fracking" for more than 30 years did not bring significant dividends to American industry.

It was George Mitchell who changed everything. He began experimenting with the composition of the injected liquid, and also applied the technique of drilling horizontal wells. The businessman spent ten years and six million dollars until he finally managed to find a drilling method that made it profitable to extract fuel from shale. After that, the Barnett field became one of the most productive in the United States.

Subsequently, other American companies began to take Mitchell's innovative approach. Shale gas production became profitable, and production volumes increased many times. The boom has pushed fuel prices to historic lows.

In 2013, the United States predicts a sustainable first place in the world in gas production. Over the next decade, the country plans to start exporting fuel, resulting in another major player in the global energy market.

Of course, not everything is going smoothly in the industry. The price downturn that so pleases consumers has had a disastrous effect on producers. In addition, industrialists have to fight off the claims of environmentalists.

Shale gas in Europe

December 7, 2011, Doha: Shale gas has dramatically changed the outlook for the US energy market, but its impact on the European energy market will be more evolutionary. This conclusion is contained in the report "Shale Gas in Europe: Revolution or Evolution?" (Shale gas in Europe: Revolution or Evolution), which is produced today by Ernst & Young.

John Avaldsnes, Head of Ernst & Young's Oil and Gas Services Practice in EMEIA (Europe, Middle East, India and Africa) notes:

"Despite the fact that in a number of countries, in particular, Austria, Germany, Hungary, Ireland, Poland, Sweden and Great Britain, exploration work is already underway, none of the gas-bearing complexes in Europe has yet been put into commercial operation, and only a small share of these resources may be profitable in the future for industrial production purposes. In addition, more than half of all estimated shale gas reserves in Europe, which account for almost 10% of the global reserves, are concentrated in two countries - Poland and France. "

shale gas sector faces a number of challenging challenges," says John Avaldsnes. "There is no unity among European countries on the issue of shale gas development, and the attitude of governments towards it is different, sometimes radically. Public opinion on this topic also diverges sharply, and the requirements for active action in order to support or limit the development of shale gas only increase pressure on governments that in most countries adhere to a "wait and see" policy.

The influence of shale gas on energy markets in different countries will vary greatly and will be determined by a number of factors: the country's national energy strategy, the degree of its dependence on energy imports, the forecast of rising gas demand, the cost of alternative competing energy supplies and the attitude of the population towards them. However, this impact may prove decisive for small and medium-sized independent companies whose business is focused on the emerging shale gas sector in Europe.

John Avaldsnes believes that good prospects are opening up for service companies that can receive new sources of income and in the early stages occupy a strong position in the shale gas sector in Europe. Research continues, and therefore new technologies may appear, thanks to which the cost of production will decrease and the efficiency of development and operation of shale gas fields will increase.

John Avaldsnes concludes that "the pace and feasibility of the development of shale gas fields in Europe will depend on a number of factors, including environmental and social, energy prices, gas demand, as well as taxation and regulation. Clearly, the debate over the future of shale gas is growing fiercer; but at the same time, one cannot but recognize that individual European countries can gain economic advantages as a result of the evolution of the shale gas sector in Europe. "

Price dynamics

The "shale revolution" eventually led to a decline in the cost of gas in the American spot market below two dollars per million British thermal units (about $72 per thousand cubic meters). George Mitchell When Barnett began development, the fuel was sold at five times the price. After prices reached a low in 2012, producers reduced production volumes, and in July 2013 the price stabilized at the level of 3-4. dollar

The cost of fuel could rise even further if America starts actively exporting gas. The current situation, when the oversupply keeps prices quite low, suits consumers, and they intend to defend their interests. In January 2013, several large American companies formed an alliance to fight for restrictions on gas exports. Industrialists believe that active foreign sales will lead to a shortage and increase in fuel prices. Any success of the alliance has not yet been reported.

Environmentalists against shale mining

2023

Shale gas is very harmful to the climate and environment, the Estonian Green Movement (Eesti Roheline Liikumine) notes on its website in February 2023.

The consequence of shale gas production is water pollution, the introduction of a large amount of poisonous substances into the environment, and sometimes even radioactive pollution. Shale gas is banned in many EU member states due to related environmental issues.

One production project takes 4-30 million liters of water and about 151 thousand liters of chemicals. The latter contain carcinogens and toxins such as lead, uranium, mercury, radium, methanol, hydrochloric acid and formaldehyde or methanal. This whole process stimulates the release of significant amounts of methane into the atmosphere.

2017: Shale gas production sparks Pennsylvania disaster

Scientists from the United States have shown that the effluents of purified water, previously used for fracking, in particular, for the extraction of shale gas, pollute the environment in Pennsylvania. The corresponding study was published in the journal Environmental Science & Technology, briefly reported by the American Chemical Society^[2][3].

Experts have found that even after purification, water previously used for fracking, entering the local ecosystem, leads to its contamination with radioactive compounds and other substances.

Maximum concentrations of radium, alkaline earth metals, salts and organic chemicals appeared in the same sediment layer. Two major classes of organic pollutants included nonylphenol ethoxylates (animal endocrine-disrupting chemicals) and polycyclic aromatic hydrocarbons (which are carcinogens). Elevated levels of radium were also detected 19 kilometers downstream of the treatment plant. The researchers do not yet know the potential risks associated with this pollution.

In 2015, the development of about ten thousand oil and gas wells operating in Pennsylvania led to the production of about 6.5 billion liters of wastewater. Only a part of these waters was treated (before descending into local reservoirs). The study conducted by the researchers allows you to assess the damage that has been done to nature from the introduction of untreated water into local ecosystems.

Fracking, or hydraulic fracturing, is a method of extracting oil or gas from shale rock by introducing a high pressure mixture into underground wells, causing gas or oil to rise to the surface.

The injected fluid usually consists of water and chemicals that affect the physics and chemistry of the process. Due to the frequent concealment of the chemical composition of the substances used by oil companies, discussions arise between the latter and ecologists.

2013

In 2013, the main claim of environmental advocates to hydraulic fracturing was pollution of wastewater. By this time, about four dozen cases of water pollution near shale deposits are known in the United States. Nevertheless, the connection between the actions of gas workers and water pollution has not yet been reliably established. When assessing the harmfulness of frac, it should also be borne in mind that the technology indirectly had a positive impact on the environment, since against the background of the shale boom in the United States, coal consumption and, accordingly, greenhouse gas emissions sharply decreased.

There is no comprehensive objective study on the environmental consequences of "fracking" yet. The situation with the impact of frac on the environment should become clearer by 2014, when the US Environmental Protection Agency publishes a draft report on the relevant topic.

Environmentalists do not want to wait for the results of the study. The anti-frac movement spread to the whole world, and in some countries the authorities passed laws banning the new technology (France, Bulgaria). However, as the experience of Great Britain shows, the laws can be canceled - in December 2012, the kingdom's government lifted the ban on the use of frac technology. Only the most ardent opponents of the technology want to completely ban "fracking." Many activists are in favor of strengthening control over the industry, raising taxes and spending the funds received on the environment.

Opponents of fracking are an organized and rather influential force. They skillfully use regional features (for example, the desire of the American Indians to preserve nature in its original form) and organize mass strikes.

Notes