By Phaedra Friend Troy
Junior explorer Linc Energy has discovered oil shale in the Arckaringa Basin of South Australia. The Arck 1 well was drilled into the Stuart Range formation, transecting an oil shale reservoir that measures between 406 feet and 124 feet deep and spans some 284,000 acres.
This is a major discovery, and will likely prove extremely profitable for Linc and South Australia.
Initial estimates as to the size of the discovery position the shale to hold more than 200 billion tonnes of unconventional oil.
"This is the first time shale oil has been specifically targeted in South Australia's Arckaringa Basin, which has historically been the focus of coal exploration," said Minister for Mineral Resources Development Tom Koutsantonis. "The discovery at Linc's Arck 1 stratigraphic well in PEL 122 reinforces the prospectivity for shale oil and the Arckaringa Basin."
Shale drilling and development was just made possible in the last decade with the combination of horizontal drilling and hydraulic fracturing. Shale development began in the natural gas shale formations of the Marcellus, Barnett, Haynesville and others in the US.
Operators have now perfected the drilling and development of liquids-rich shale formations, shifting interest to oil and condensate. Rigs are actively drilling the Bakken Shale of North Dakota and Eagle Ford Shale of South Texas, as well as the emerging Niobrara, Utica, Woodford, Wolfcamp and Monterrey Shales.
Other nations are trying to create shale booms of their own, with China, India, Poland and Argentina actively pursuing shale developments.
Nonetheless, this is the first announced shale oil discovery outside of the US, and the positive affect it will have on the economy in South Australia will be major – just look at the jobs forecast in North Dakota and South Texas. (Most hotels and real estate are full, and small towns are booming with oilfield workers and engineers.)
This shale discovery, alongside Western Australia's mega LNG projects and Queensland's innovative coal-seam-gas-to-LNG (CSG-to-LNG) projects may very well catapult the nation to a new high. Certainly, Australia is worth a second look for investments both in the energy industry and all the markets that would support the swelling workforce there.
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Phaedra
Friend Troy is the content director for PennEnergy.com, an all-energy website that
provides oil and gas, power and infrastructure news, analysis, reports and more.
Sign up for a free
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Thursday, September 29, 2011
Thursday, September 22, 2011
Trucking Industry to Oil & Gas: 'Find more domestic supply'
Most oil and gas professionals are watching oil prices. We're aware of fundamentals and what's driving the current price, whether that’s supply and demand, or economic factors or an edgy market.
Oil prices are important because they determine the success of any given project. As investment decisions and development (and even re-development) projects are undertaken, there is a certain price point that makes any upstream project commercial. Everything over that is just icing on the cake.
Beyond the oil field, the price at the pump can affect demand, as well. American families drive less when gasoline reaches about $4 a gallon, but some consumers cannot afford to simply drive less.
The North American trucking industry is dependent on the oil and gas industry, from upstream to midstream to downstream and marketing. I got a chance to chat with Charles Wilson, the editor of Bulk Transporter, a trade publication that covers the tank truck and storage terminal operations in the US and Canada, about his take on the relationship between our industries.
The implications of increased domestic production are very present in the trucking industry. More oil and gas will help keep prices down, and that will help to keep the North American trucker profitable.
"The number one top question for the trucking industry is: What will diesel cost in coming years?" Wilson revealed.
He explained that trucking fleets are not as concerned with availability, but that the cost of fuel is paramount.
"North America is pretty much awash in diesel," Wilson said. "Fleets are reluctant to consider a switch to different fuels that are not comparable to diesel. Biodiesel is seen as transparent. Natural gas can be used in a diesel engine with relatively minimal modification. It all comes down to cost of the fuel."
While the trucking industry will be required to comply with new EPA regulations starting in 2014 that will call for a reduction in fuel consumption by up to 20 percent, the new trucks will cost more, which simply adds to the industry’s focus on fuel prices moving forward.
"How can the oil and gas industry help?" Wilson said. "Find more domestic supply that will help hold down prices and ensure adequate supply."
With an abundance of natural gas from prolific shale gas developments across North America, natural gas may prove to be the answer -- or at least one of them.
Various projects are under way to build natural gas and LNG fueling stations, and South American petrochemical company Sasol (NYSE:SSL) has just announced that it is looking to build a gas-to-liquids (GTL) plant in Louisiana based on its proprietary technology.
"Natural gas and GTL both hold considerable promise for trucking," Wilson said. "These fuels would make it much easier to meet the GHG reductions. LNG and CNG also are attractive because they offer the potential for much lower fuel costs, which would boost ROI for truck fleets."
While natural gas fleets require a costly upgrade to trucks, the GTL fuel can be distributed using existing infrastructure and used in existing engines.
The oil and gas industry is diligently working to increase domestic production and improve distribution (think Keystone XL pipeline). From the deepwaters of the Gulf of Mexico to Canada's oil sands, from oil shale developments to the potential offshore the East Coast, oil and gas abounds in North America. Now the question is: Will we be able to tap it?
...........................................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Oil prices are important because they determine the success of any given project. As investment decisions and development (and even re-development) projects are undertaken, there is a certain price point that makes any upstream project commercial. Everything over that is just icing on the cake.
Beyond the oil field, the price at the pump can affect demand, as well. American families drive less when gasoline reaches about $4 a gallon, but some consumers cannot afford to simply drive less.
The North American trucking industry is dependent on the oil and gas industry, from upstream to midstream to downstream and marketing. I got a chance to chat with Charles Wilson, the editor of Bulk Transporter, a trade publication that covers the tank truck and storage terminal operations in the US and Canada, about his take on the relationship between our industries.
The implications of increased domestic production are very present in the trucking industry. More oil and gas will help keep prices down, and that will help to keep the North American trucker profitable.
"The number one top question for the trucking industry is: What will diesel cost in coming years?" Wilson revealed.
He explained that trucking fleets are not as concerned with availability, but that the cost of fuel is paramount.
"North America is pretty much awash in diesel," Wilson said. "Fleets are reluctant to consider a switch to different fuels that are not comparable to diesel. Biodiesel is seen as transparent. Natural gas can be used in a diesel engine with relatively minimal modification. It all comes down to cost of the fuel."
While the trucking industry will be required to comply with new EPA regulations starting in 2014 that will call for a reduction in fuel consumption by up to 20 percent, the new trucks will cost more, which simply adds to the industry’s focus on fuel prices moving forward.
"How can the oil and gas industry help?" Wilson said. "Find more domestic supply that will help hold down prices and ensure adequate supply."
With an abundance of natural gas from prolific shale gas developments across North America, natural gas may prove to be the answer -- or at least one of them.
Various projects are under way to build natural gas and LNG fueling stations, and South American petrochemical company Sasol (NYSE:SSL) has just announced that it is looking to build a gas-to-liquids (GTL) plant in Louisiana based on its proprietary technology.
"Natural gas and GTL both hold considerable promise for trucking," Wilson said. "These fuels would make it much easier to meet the GHG reductions. LNG and CNG also are attractive because they offer the potential for much lower fuel costs, which would boost ROI for truck fleets."
While natural gas fleets require a costly upgrade to trucks, the GTL fuel can be distributed using existing infrastructure and used in existing engines.
"We see considerable interest in natural gas
among tank truck fleets," Wilson said. "They like the fact that natural gas costs at
least the price of diesel on a per-gallon basis, and they see natural gas
as a potential cargo, since it will be distributed outside the existing
pipeline infrastructure in many parts of the country. LNG probably holds the
biggest potential as a cargo for the future."
The oil and gas industry is diligently working to increase domestic production and improve distribution (think Keystone XL pipeline). From the deepwaters of the Gulf of Mexico to Canada's oil sands, from oil shale developments to the potential offshore the East Coast, oil and gas abounds in North America. Now the question is: Will we be able to tap it?
...........................................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, September 15, 2011
Downstream solutions offer new opportunities for upstream developments
Natural gas has typically been a domestic product. Due to its gaseous state, natural gas is usually transported by pipeline, which limits the reach of the production in comparison to crude or other liquids.
Billion-dollar pipelines have been built to transport natural gas resources in the Caspian, Middle East and Russia to hungry markets nearby.
Liquefied Natural Gas
Enter: liquefied natural gas. LNG opened up myriad markets for stranded production or glutted natural gas markets. For decades, countries like Malaysia and Qatar have been transporting natural gas to under-served markets.
Up until very recently, the US was an LNG importer.
By combining horizontal drilling and hydraulic fracturing, prolific shale gas formations across North America have dramatically ramped up production in the US. Not only do US markets not require LNG imports, the country now has too much natural gas, causing the price to drop and some production to be shut-in.
Nonetheless, markets in South America, Europe and Asia are still hungry for natural gas, and many operations worldwide are increasing LNG production to fill that growing need.
A number of companies in the US and Canada are also jumping for downstream solutions to upstream production overloads. Various companies are attempting to reverse LNG import facilities and pipelines to allow Gulf Coast operations to liquefy and export LNG, and there are projects on Canada's west coast to build new LNG liquefaction and export facilities to deliver Horn River Shale production to eager Asian markets.
Gas-To-Liquids
On the other hand, new technologies may help North American markets to better use existing domestic production, rather than export excess natural gas.
This week, South African petrochemical firm Sasol (NYSE:SSL) announced that the company is planning to build a gas-to-liquids (GTL) plant on Louisiana's Gulf Coast. Sasol is presently sturying the feasibility of the downstream project, which would convert natural gas to transportation fuels.
Using a proprietary Sasol technology successfully deployed in other GTL facilities, the Louisiana GTL plant would create GTL transportation fuel that is cleaner-burning than conventional diesel and does not require modifications to be used in existing vehicles and fuel delivery infrastructure.
The GTL solution would offer a new market for area shale production and could possibly offset some crude oil imports.
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Billion-dollar pipelines have been built to transport natural gas resources in the Caspian, Middle East and Russia to hungry markets nearby.
Liquefied Natural Gas
Enter: liquefied natural gas. LNG opened up myriad markets for stranded production or glutted natural gas markets. For decades, countries like Malaysia and Qatar have been transporting natural gas to under-served markets.
Up until very recently, the US was an LNG importer.
By combining horizontal drilling and hydraulic fracturing, prolific shale gas formations across North America have dramatically ramped up production in the US. Not only do US markets not require LNG imports, the country now has too much natural gas, causing the price to drop and some production to be shut-in.
Nonetheless, markets in South America, Europe and Asia are still hungry for natural gas, and many operations worldwide are increasing LNG production to fill that growing need.
A number of companies in the US and Canada are also jumping for downstream solutions to upstream production overloads. Various companies are attempting to reverse LNG import facilities and pipelines to allow Gulf Coast operations to liquefy and export LNG, and there are projects on Canada's west coast to build new LNG liquefaction and export facilities to deliver Horn River Shale production to eager Asian markets.
Gas-To-Liquids
On the other hand, new technologies may help North American markets to better use existing domestic production, rather than export excess natural gas.
This week, South African petrochemical firm Sasol (NYSE:SSL) announced that the company is planning to build a gas-to-liquids (GTL) plant on Louisiana's Gulf Coast. Sasol is presently sturying the feasibility of the downstream project, which would convert natural gas to transportation fuels.
Using a proprietary Sasol technology successfully deployed in other GTL facilities, the Louisiana GTL plant would create GTL transportation fuel that is cleaner-burning than conventional diesel and does not require modifications to be used in existing vehicles and fuel delivery infrastructure.
The GTL solution would offer a new market for area shale production and could possibly offset some crude oil imports.
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, September 1, 2011
Oil and gas industry fights negative PR
Did you read that actress Daryl Hannah got arrested in front of the White House, protesting the Keystone XL pipeline?
Ugh.
Although a few years have passed since Hannah was thought of as an American Sweetheart, she still holds that spot for many a mermaid lover. Lately she's been kicking up some negative dust around the Keystone XL pipeline.
Proposed by TransCanada (NYSE:TRP) (TSX:TRP) in 2008, the Keystone XL pipeline will transport up to 830,000 barrels of oil a day from Canada to markets in the US, all the way to the Texas Gulf Coast. The $7 billion pipeline project is expected to create some 20,000 American jobs, as well as offer the US much-needed energy security.
Nonetheless, people like Daryl Hannah oppose the pipeline because the source of the energy independence is Canada's oil sands.
Asia, on the other hand, does not have the same aversion to Canada's black gold, and has commercially supported Enbridge's (NYSE:ENB) (TSX:ENB) proposed $5.5 billion Northern Gateway Pipelines, which are also slated to export Canada's oil -- but this time to Asia.
Poor shale also can't seem to get a fair shake. A documentary comes out, and everyone believes it. Now, with drilling and development reaching new highs, shale gas and oil are expected to become the life-saver for growing demand in the country.
Again, negative PR comes in to ruin the day. Instead of news agencies heralding the new technologies that are allowing operators to produce ever-increasing amounts of unconventional natural gas, condensate and oil, they continue to focus on a misrepresentation of the truth.
I even saw that CSI did an episode on hydraulic fracturing. Really?
Where's the Hollywood endorsement for oil and gas? Who's going to step up and support the thousands upon thousands of Americans who earn their livelihoods from the upstream, downstream and midstream segments?
No, oil and gas is not necessarily pretty. It takes hard work, dedication, sweat and risk to develop our nation's natural resources. We've been doing it successfully for more than a century.
Thinking about it: Maybe the industry doesn't need a movie star to publicly support oil and gas -- we've got hard-working Americans, quietly toiling to ensure that US families can afford gasoline, electricity and heat.
Thank you.
............................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Ugh.
Although a few years have passed since Hannah was thought of as an American Sweetheart, she still holds that spot for many a mermaid lover. Lately she's been kicking up some negative dust around the Keystone XL pipeline.
Proposed by TransCanada (NYSE:TRP) (TSX:TRP) in 2008, the Keystone XL pipeline will transport up to 830,000 barrels of oil a day from Canada to markets in the US, all the way to the Texas Gulf Coast. The $7 billion pipeline project is expected to create some 20,000 American jobs, as well as offer the US much-needed energy security.
Nonetheless, people like Daryl Hannah oppose the pipeline because the source of the energy independence is Canada's oil sands.
Asia, on the other hand, does not have the same aversion to Canada's black gold, and has commercially supported Enbridge's (NYSE:ENB) (TSX:ENB) proposed $5.5 billion Northern Gateway Pipelines, which are also slated to export Canada's oil -- but this time to Asia.
Poor shale also can't seem to get a fair shake. A documentary comes out, and everyone believes it. Now, with drilling and development reaching new highs, shale gas and oil are expected to become the life-saver for growing demand in the country.
Again, negative PR comes in to ruin the day. Instead of news agencies heralding the new technologies that are allowing operators to produce ever-increasing amounts of unconventional natural gas, condensate and oil, they continue to focus on a misrepresentation of the truth.
I even saw that CSI did an episode on hydraulic fracturing. Really?
Where's the Hollywood endorsement for oil and gas? Who's going to step up and support the thousands upon thousands of Americans who earn their livelihoods from the upstream, downstream and midstream segments?
No, oil and gas is not necessarily pretty. It takes hard work, dedication, sweat and risk to develop our nation's natural resources. We've been doing it successfully for more than a century.
Thinking about it: Maybe the industry doesn't need a movie star to publicly support oil and gas -- we've got hard-working Americans, quietly toiling to ensure that US families can afford gasoline, electricity and heat.
Thank you.
............................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
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