Posted on 10/19/2011 4:00:20 AM PDT by abb
The successful development of the Tuscaloosa Marine Shale will have “huge implications” for Baton Rouge and the surrounding parishes, a Devon Energy executive said Tuesday.
One can get an idea of an oil shale’s impact by looking at the Eagle Ford formation in Texas, said Harry Livingstone, exploration manager, new ventures for Devon’s Southern region.
The first Eagle Ford well was drilled there in 2008, and there are now 241 rigs drilling in the formation, Livingstone said. The shale has generated 13,000 full-time jobs and more than $500 million in salaries.
By 2020, the Eagle Ford Shale will have contributed an estimated $11.6 billion to the Texas economy and created nearly 68,000 jobs, Livingstone said. The formation is already the biggest oil boom in Texas history.
Livingstone was one of the speakers at the LSU Center for Energy Studies’ annual Energy Summit. This year’s theme was unconventional plays. Around 70 people attended.
So far Devon has drilled a vertical well and a horizontal well in the shale, Livingstone said. Work on a third well should begin shortly.
He described the first efforts as “science wells,” which will provide information that will help Devon productively drill the shale.
“These early wells we are doing are not economic by any stretch of the imagination. But we figure that 50 wells into the program, costs will be such that the economics are good,” Livingstone said. “The scale of the operation will bring the costs down.”
Livingstone said one of the advantages of shale formations is their sheer size. A 1997 LSU report estimated the Tuscaloosa Marine Shale, which stretches through the midsection of Louisiana, contains 7 billion barrels of oil.
Livingstone said Devon has 250,000 acres under lease in Louisiana and is still adding to its acreage.
“We do think it’s an exciting play. We’re in there for the long term, we hope,” Livingstone said.
Livingstone and other speakers said shale plays and the hydraulic fracturing technology that allow production in the formations have radically altered the energy supply of the United States and the world.
In hydraulic fracturing, chemicals, water and sand are injected into the ground under enormous pressure, cracking the rock and propping it open. The oil or natural gas escapes through those openings.
Livingstone said the industry has known about the Tuscaloosa Marine Shale for decades, but the formation was waiting for the technology to catch up.
Fracking and horizontal drilling, which boosts a well’s recovery area, have made shale production possible.
“This is a U.S.-driven industry. The U.S. is way ahead of the rest of the planet, the recognition of the value, the asset size, the technology for fracking these wells, is all based here in the U.S.,” Livingstone said.
When the international shales take off, the equipment and expertise will come from the United States, Livingstone said. The industry should be cashing in on the demand for those services.
Allan Pulsipher, LSU Center for Energy Studies executive director, cited a National Petroleum Council report that shows the United States is now the top natural gas producer in the world.
In addition, the shales and oil sands in Canada have made North America the largest producer of oil in the world, ahead of Russia and Saudi Arabia, Pulsipher said.
The energy supply picture has completely changed in the past few years, he said.
Mike Power, manager of unconventional resources, drilling and completion for Chevron, said five years ago, U.S. production of natural gas was expected to decline steadily through 2050.
The 2010 forecast shows that by 2035, U.S. gas production will increase by 44 percent, Power said. Shale gas now accounts for 25 percent of the country’s production and will account for half of it by 2035.
The Louisiana Oil and Gas Association estimated that the economic impact of the Haynesville Shale’s, a natural gas play that crosses northwest Louisiana was some $22 billion in 2008 and 2009.
And more than a dozen similar formations have been found throughout the world, Power said.
Chevron is positioning itself to take advantage of shale plays in Poland, Bulgaria and Romania, Power said. The company expects to drill its first well in Poland by the end of the year.
But production in Europe, which imports most of its natural gas, is expected to grow much more slowly, Power said. Many of the areas lack the roads, pipelines and service companies needed to produce the gas.
Cheniere Energy hopes to capitalize on that delay by exporting liquefied natural gas from its Cameron Parish facility to markets in Europe and Asia, said Patricia Outtrim, the company’s vice president, governmental and regulatory affairs.
Cheniere has secured a U.S. Department of Energy permit to export LNG and expects to secure the others needed for the $6 billion facility in the next few months, Outtrim said. The company’s plan calls for it to secure the three additional major permits, including an order from the Federal Energy Regulatory Commission, by the end of the year.
With the permits in place, the company will move to secure long-term contracts from suppliers and then use those contracts to obtain the financing for the project, she said.
Cheniere has already spent $1.5 billion on the facility, which was planned in the 1990s, to handle imports of liquefied natural gas. At the time, domestic natural gas prices were double and triple the current price of around $4 per thousand cubic feet.
“I can’t tell you what the future’s going to bring, but we feel this facility definitely has at least a 20-year life, maybe longer than that,” Outtrim said.
In today’s Baton Rouge paper. I’ll see if I can find more stuff on that confab.
Mike
http://online.wsj.com/article/SB10001424052970203658804576637392455424656.html?ru=yahoo&mod=yahoo_hs
Shale is rocking the U.S. energy industry to its core.
The technique of cracking open shale rock to release oil and natural gas has spurred hundreds of billions of dollars worth of deals, including Monday’s $4.4 billion proposed purchase of Brigham Exploration Co. by Norway’s Statoil ASA. And it has delivered enormous profits and revenues to those in its midst, including Halliburton Co., which reported a record $6.5 billion in third quarter revenue.
Shale discoveries have reinvigorated U.S. oil and gas production that just half a dozen years ago was widely seen as in terminal decline. Today, there is a glut of cheap natural gas, and domestic oil production is rising for the first time in decades. Shale development is even spreading to other countries, such as Poland and Argentina.
The shale boom has already minted a half-dozen new billionaires comparable to the riches brought by the Internet.
“You certainly have to record the discovery and the exploitation of resources from both oil and gas shales as one of the great wealth creators in American history,” said Ralph Eads, vice-chairman of investment bank Jefferies & Co., which has advised on more than $75 billion worth of shale deals over the last three years. “It looks to be the economic equivalent to any of the big technology innovations.”
snip
http://www.lsureveille.com/news/summit-addresses-energy-resources-1.2654677
Summit addresses energy resources
By Andrea Gallo
Staff Writer
Published: Tuesday, October 18, 2011
Updated: Tuesday, October 18, 2011 22:10
Energy experts flooded the University on Tuesday as the country’s leading energy policymakers pinpointed unconventional energy opportunities in Louisiana as part of the University’s Center for Energy Studies’ 2011 Energy Summit.
This year’s summit was titled “Unconventional Louisiana: Shales, Sands, and Other Opportunities” and featured six speakers from across the country from prominent companies like Chevron, Cheniere Energy and the American Chemistry Council.
David Dismukes, associate executive director for the Center for Energy Studies, said the summit offered hope on the energy industry that was perceived to be in a plight amid the country’s economic crisis. While the United States generally turned to Saudi Arabia and the Persian Gulf area for its energy needs in the past, Dismukes said, North America is now where unconventional energy sources loom.
“There’s amazing opportunities in all aspects of this unconventional business,” Dismukes said. “North America is the Saudi Arabia of unconventional resources.”
These unconventional resources include shale, a type of sedimentary rock, which opens doors for innovative drilling opportunities, Dismukes said. Shale’s takeoff has resonated at national and international levels, with foreign companies swooping into the U.S., trying to gain shale properties, according to the Wall Street Journal.
The Wall Street Journal cites Devon Energy Corp. as a company whose success skyrocketed from shale acquisitions. Harry Livingstone, exploration manager for Devon’s Southern region, discussed shale at Tuesday’s conference.
As America emerges from its economic crisis, unconventional energy resources will pave the way for the energy industry’s future, Dismukes said.
Dismukes called this “the only time in the last 10 years that you could say something positive about the energy business.”
Energy has become integral to Louisiana’s economy due to the state’s large petrochemical makeup, Dismukes said.
“What happens in the energy business can have significant impacts on all aspects of the state,” he said.
This concept was echoed in retired University professor emeritus Loren Scott’s recently released Louisiana Economic Outlook, which showed the state’s main revenue sources as coming from its petrochemical industries.
“The No. 1 thing is that Baton Rouge has a very large petrochemical base to its economy,” Scott said. “The chemical industry, in particular, is doing very well right now.”
This industry will expand as Cheniere Energy and Sasol Synfuels invest into Louisiana’s economy. Their representatives discussed shale gas production through exports and contracting unconventional resources in the long-term at the summit.
The University’s Center for Energy Studies holds an energy summit annually to discuss pressing energy issues that affect Louisiana and its surrounding areas. The Center for Energy Studies provides research for the Legislature, public agencies and business and civic groups.
Contact Andrea Gallo at agallo@lsureveille.com
Never fear, some Enviro-Wacko Group from California will file lawsuits to shut this all down.
I was told by a engineer type who is plugged in on shale development that talk about “environmental issues” from local governments tends to quiet down once the royalty checks begin to flow.
I couldn’t agree with you more. With more oil and gas exploration, taking full advantage of the huge amount of coal we have in the continental USA (we’ve barely begun to exploit the coal in the Appalachian region and at the Powder River region of Wyoming and Montana), and soon taking full advantage of that 440,000 tons of thorium that can now be used as nuclear reactor fuel, the USA could become effectively independent of oil and gas imports within ten years, especially now with modern oil and gas extraction technologies.
I think that this has moved too fast, and is too large. In principle, of course, you are right.
But the enviroweenies have been too busy talking about wind and renewables to notice this. One of the problems of actually believing that fossil fuels are in decline.
I think that this is one area where we are really, really winning....
http://www.rigzone.com/news/article.asp?a_id=108178
The Tuscaloosa Marine shale play, which covers 2.7 million acres across central Louisiana and southwest Mississippi, could emerge as the next big shale oil play.
Devon Energy first reported in early May its activity in the play, which is similar in geology to the Eagle Ford, and is believed to have the same potential for development and production. Devon holds 250,000 acres in the play; Devon spokesperson Chip Minty said it is still too early to quantify the liquids content of this acreage. The company plans to drill two horizontal wells this year on its Tuscaloosa shale acreage. Last month, Devon spud the Lane 64-1 well, in East Feliciana Parish, La., the first of these two wells, which was drilling at 15,134 feet as of June 14, nearly at total depth.
Tuscaloosa Marine Shale
The Significance of Resistivity
http://www.ameliaresources.com/documents/tuscaloosatrend/Amelia%20Resources%20LLC%20WEBSITE%20Tuscaloosa%20Marine%20Shale%20RESISTIVITY%20DISCUSSION%20Mar%202011.pdf
Out of curiosity, how does having foreign companies owning leases here, doing the drilling and selling of our oil back to us make us energy independent?
Mike
Geeesh! When I first read this headline (I just woke up) I thought Tuscaloosa Marine was somebody’s FR screen name...Need coffee.
Things to ponder. I’m still wondering about it. As far as “leverage” goes that would only work if we had the power to manipulate the company that owned the lease and was doing the drilling. That would take govt power over a private enterprise and I don’t like that at all.
Not to hijack the thread...but...
Go here: http://www.freerepublic.com/focus/f-news/2793115/posts n
Click on the link and listen to Alex Alexiev on how he feels we could be energy independent in 2 years...
Also read an article @ the dentist office in a business magazine, an interview with the CEO of Royal Dutch Shell. He hinted in he next 40 years of more Natural Gas and spoke of their LPG self contained Processing and tankering Ship they are working on that is bigger than one of our Carriers. I have researched this is is an amazing vessel, still in the design phase, and and even gone through scale model hydro-tunnel testing.
The eco-weenies can't stop this Gaseous and re-drilling revolution here in the US, as much as they will try. People are waking up....
Here in Michigan we sit right on top of the 3rd largest single shale plays but if you say the words “Antrim play”, most people will give you a blank stare.
There is some production here but its mostly along the shallower northern edge.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.