Posted on 01/27/2010 5:04:35 AM PST by thackney
Russian energy giant Gazprom is concerned about losing markets due to a surprise surge in U.S. gas production driven by new extraction techniques, the Kommersant daily reported Tuesday.
The state-controlled firm is reconsidering its strategy in light of the U.S. “revolution” in shale gas extraction, Kommersant said, citing a company document due to be presented at a board meeting Tuesday.
“The situation is aggravated by the so-called revolution in gas extraction from non-traditional sources in the United States,” said the document, a speech by Gazprom deputy chairman Alexander Medvedev, quoted by Kommersant.
“If several years ago, not a single organization known to us was forecasting the rapid growth of gas extraction in the United States; today, practically all companies are discussing the prospects of shale gas extraction, which could fundamentally reshape the whole world gas market.”
The surge in U.S. gas production has already “led to the redirection of liquefied natural gas on the markets of EU countries,” said the document.
Gazprom has long made most of its profits by exporting gas to the European Union, but fears of Russian control over EU energy supplies have led the bloc to seek out new sources of gas.
Russian gas production declined last year, while U.S. gas production grew 3.7 per cent, according to U.S. Department of Energy estimates, largely due to improvements in extraction techniques.
The improvements have opened reserves of gas embedded in shale rock that were previously too costly to extract, leading energy companies to snap up drilling rights in unlikely places such as New York state.
Parts of Europe are also believed to have significant untapped reserves of shale gas.
A source close to Gazprom’s board told Kommersant the company may reconsider plans to invest heavily in the Shtokman field, a project originally aimed at serving the United States and Canada, due to the rise in U.S. production.
Obamao will get right on it and halt US gas production.
He had better hurry. You can’t spit without hitting a gas-drilling rig around Ft. Worth and throughout Central Texas.
Good. American ingenuity at work.
Yeah, an old ranch family I knew around Glen Rose/Granbury is now rich. I hope they include me in their wills. :>)
So, gas turns out to be fungible.
Shale gas is LNG is Russian gas
Within economic limitations.
At $8 a therm, About any supply can compete in any market.
At $4 a therm, most markets need to be pipeline connected.
In between, some are and some are not.
Russia is now saying they can NOT compete by developing a new field and using LNG.
I apologize in advance for my comment, but “F*** the Russians!” I’ll never forget how Putin, Chirac and Schroeder (who now works for a Russian energy company) trashed Bush endlessly and did everything they could to oppose him at every corner. America, keep drilling!
Finally some good news on the energy front. We should be exploiting every last molecule of natural gas we have on American soil. Every unit we produce is money we aren’t sending to Arabs. I just hope no one tells the BO administration. They will halt this development in its tracks so we can continue to be dependent on foreign energy sources. Excellent post.
Does Europe have sufficient quantities of Natural Gas in Shale to meet all their supply needs?
I have not seen that, only that they had some.
At this time, natural gas and oil mostly serve different markets. Becoming Natural Gas independent does not mean stopping oil imports without a massive conversion of our vehicles to run on Natural Gas.
That’s a key point. We have a huge abundance of natural gas in this country. Even in the East with the gas distribution network, we have difficulty moving all of the gas that’s available.
Pipeline distribution companies have been going to higher pressures for years in an effort to increase capacity. Locally owners of gas wells have seen their royalty checks plummet because there wasn’t sufficient pipeline capacity to take their gas. Larger sources farther up the line took priority.
We’re sitting on the resources to effectively undercut the price of oil by building multi-fuel vehicles that can cut gasoline demand. The last manufacturer, Ford, gave up years ago. Why buy a multi-fuel vehicle when gasoline is cheap. We need to do it anyway.
We never learned our lesson from the early 70’s. We’ll be gotchaed over and over again. The sad part is the oil dollars that flow into countries such as Iran are so vast that even if a infinitesimal amount is diverted to support terrorism, we are financing our own demise.
Congress has always had a relatively easy solution to impacting our demand for imported oil. I talked to a congressional staffer a few months ago about this. I was dumbfounded by how far up his neither regions, the man had his head parked.
I have been reading about using natural gas to fuel vehicles, in fact, where I live a number of the buses and commercial vehicles run on natural gas. Also, can’t natural gas be used to generate electricity? But I agree with you, basically, the we need to be drilling for our own oil, offshore, in Alaska, elsewhere.
“Yes, there are huge shale deposits throughout Europe, not all may be productive but some are bound to be good.”
Like most of the rest of the world, Europe does indeed have shale deposits.
However, unlike the rest of the world, the fiscal terms available to oil and gas investors in the US are attractive enough to make technologically difficult ventures like shale gas drilling commercially viable.
In a nutshell it means that there will have to be different terms offered to investors to do the same things in Europe or elsewhere that are being done here in shale drilling. Countries have a difficult time swallowing lower stakes in ventures given companies.
You will not see a headlong rush to those places for shale gas in the near term.
Beware Salazar, his Interior Secretary.
The potential exist for Europe to free it self from imported Russian gas, that is something that Gazprom and Russia don’t want. A better questions is does Europe want to free itself from Russian supplied gas?
Electricity is generated using Natural Gas; about 21% of our electrical power is made that way.
But very little electricity is made from oil. Much that does use petroleum is using refinery “leftovers” of residual oil and coke. These are products left after crude has fuels like gasoline and diesel removed.
I say this only to show generating more electricity from Natural Gas will do little if anything to reduce oil demand.
More Nat Gas vehicles would do more to reduce petroleum imports.
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