Best of the Week
Most Popular
1.Stock Market in DANGER of Strangling the Bears to Death - Nadeem_Walayat
2. Germany Pivoting East, Exit US Dollar, Enter Gold Standard - Jim_Willie_CB
3.Flight MH17 – Kiev Flash Mob's Last False Flag? - Andrew_McKillop
4.Stock Market Crash Nightmare! - Nadeem_Walayat
5.Gold - The Million DOLLAR Question... - Rambus_Chartology
6.Gold And Silver – BRICS And Germany Will Pave The Way - Michael_Noonan
7.The Jewish Selfish Gene, People Chosen by God, Everyone Else is Goyim to Kill - Nadeem_Walayat
8.The Israeli Promised Land Dream - The Criminal Roadmap Towards “Greater Israel”? - Felicity Arbuthnot
9.Which Way is Inflation Blowing? Watch Commodities - Gary_Dorsch
10.U.S. Economy Quarterly Review and Implications for 2014-2015 - Lacy Hunt
Last 5 days
No More School in Gaza Because All the Children are Dead Chant Israel's Jewish Fundementalists - 31st July 14
The Iron Dome Inside The Heads of Israel’s Leaders - 31st July 14
You Know a Politician or Talking Head is Clueless When….. - 31st July 14
Don't Get Married to Your Gold Stocks—It's a Performance-Based Relationship - 31st July 14
Stock Market Parabolic Collapse - Sowing the Seeds of the Next Depression - 30th July 14
How to Profit from the Russia Ukraine Conflict - 30th July 14
Greenspan: U.S. Economy Running Out of Buffer; Stock Market to See Significant Correction - 30th July 14
Rogue States And Loony Tunes - 30th July 14
Anne Elk’s Theory On Brontosauruses - 30th July 14
Our Totalitarian Future - Totalitarianism NOW! - 30th July 14
Stocks Bear Market Formation Revealed - 30th July 14
We Just Found “The Future” - 30th July 14
What the “Steak Bandit” Says About Asset Values - 30th July 14
Designer War By Default - Seven Types of Elite Madness - 30th July 14
Death of the U.S. Dollar? Gold an Inflation Hedge? Really? - 29th July 14
We’re Ready to Profit in the Coming Gold Price Correction—Are You? - 29th July 14
Their Economy Will Collapse, Including Ours - 29th July 14
Silver Prices – Megaphone Patterns - 29th July 14
Real U.S. Interest Rates - Fed Exit a Blue Pill? - 29th July 14
Why Israel Should NOT Exist, Just Like Any Other Rogue State - 29th July 14
Gold Still Looking Good - 29th July 14
Silver Price Set To Star - 29th July 14
Our Population Growth Totalitarian Future - 29th July 14
World War 1 Cause and Consequences - The Planned Destruction of Christendom - 29th July 14
Will Crashing Commodities Crash the Stock Market? - 29th July 14
Ukraine MH17 - Washington Thinks Americans Are Fools - 29th July 14
Stock Market Bubble Warning - 29th July 14
Gold Price and U.S. Dollar’s July Rally - 28th July 14
Second Quarter Corporate Earnings: Marching Toward a Strong Economic Recovery - 28th July 14
Time to Put a New Economic Tool in the Box - 28th July 14
Mossad in Gaza, Ukraine and the Cult Of The All-Powerful Elite - 28th July 14
Elliott Wave Gold Price Projection Since 1970 - 28th July 14
Investors Remain Uncertain As Stock Fluctuate Near Long-Term Highs - Will The Uptrend Extend? - 28th July 14
The Mass Psychology Of Decline - 28th July 14
Will the US Destroy the World? - Don’t Expect to Live Much Longer - 28th July 14
GDM and GDXJ Gold Stocks In-depth Look - 28th July 14
Stock Market One FINAL High? - 28th July 14
What It Means - Paradigm Collapse And Culture Crisis - 27th July 14
Wall Street Shadow Banking: You Can’t Taper a Ponzi Scheme: “Time to Reboot” - 27th July 14
6 Tips for Picking Winning Gold Mining Stocks - 27th July 14
Israel's War on Children, Exterminating the Palestinians Future - 27th July 14
Guilt By Insinuation - How American Propaganda Works - 26th July 14
Surprise Nuclear Attack On Russia To Liberate Ukraine - 26th July 14
Use "Magic" Of Gold/Silver Ratio To Greatly Increase Your Physical Holdings - 26th July 14
Derivatives Market Species Origins - Abuse, Props and Risks - 26th July 14
Stock Market Manipulation and Technical Analysis - 26th July 14
China’s Stock Market Finally Looks Like A Buy - 26th July 14
Ed Milliband Fears Israel Jewish Fundamentalist Gaza War Massacres Backlash - 26th July 14
The Big Energy = Power Battle Is Coming - 25th July 14
USrael - Zionists in Control of America's Goyim Brainwashed Second Coming Slaves - 25th July 14
More Weakness Ahead for Gold Miners - 25th July 14
Gold Price Strong Season Starts - 25th July 14
Geopolitics and Markets Red Flags Raised by the Fed and the BIS on Risk-taking - 25th July 14
Gold Lockdown Until Options Expiry - New Singapore Gold Contract Threatens Price Manipulation - 25th July 14
The Bond Markets, Black Swans, and the Tiny Spirit of Santo - 25th July 14
No Road Map For Avoiding The Future - 25th July 14
Israeli War Machine Concentrating Women and Children into UN Schools Before Killing Them - C4News - 25th July 14
Israeli Government Paying Jewish Fundamentalist Students to Post Facebook Gaza War Propaganda - 25th July 14
Why the Stock Market Is Heading For A Fall - This Time Is Not Different - 25th July 14
An Economic “Nuclear Strike” on Moscow, A “War of Degrees” - 25th July 14
BBC, Western Media Working for Israeli Agenda of Perpetual War to Steal Arab Land - 25th July 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

The Brewing Shale Gas Energy Boom That Nobody is Talking About

Commodities / Natural Gas Nov 27, 2012 - 10:07 AM GMT

By: Money_Morning

Commodities

Dr. Kent Moors writes: While folks back in the U.S. were sitting down to Thanksgiving dinner, I was making my way back to Frankfurt, Germany from Warsaw, Poland.

My discussions in the Polish capital were with the PGNiG, the national state-run gas company and the government's designated partner in all domestic drilling operations.


Unlike my German conversations, there is considerable optimism these days that the energy picture in Poland is about to change in a major way-thanks to shale gas.

Poland must overcome a serious of challenges, which, of course, were the reasons for our meetings. And despite the upbeat tenor of everybody involved, significant concerns have emerged.

On the positive side, Polish officials have committed to a rapid development of unconventional gas. In addition, no domestic opposition to drilling exists, at least not yet.

Unlike back in Germany, nascent environmental movements have neither the political clout nor the apparent interest in making this an issue.

Polish operations are currently in a very early stage, which may be the reason for the lack of opposition. Only a few test wells have been drilled (less than 15 in all), and none are near residential populations.

For that matter, PGNiG is preparing to start its first horizontal drilling operation. The test wells thus far have all been spud by foreign companies.

However, it is now clear that the "rapid" ramp up foreseen by the authorities in the central government is not working out as anticipated back at the well sites.

For one thing, the initial wells have either come in dry or produced disappointing gas flows. For another, the national gas company is under considerable pressure to produce positive results in what is becoming a very challenging technical environment.

The former result is hardly surprising. There remains insufficient geology and preliminary field prospecting. The locations of shale deposits are well known. The country has no less than five very promising basins. But Mother Nature has an irritating habit of indifferently placing hydrocarbons in those basins.

That requires initial evaluations before the expensive proposition of sinking exploratory wells commences. Thus far, the few wells attempted have been positioned with little more than rudimentary data and guesswork. The poor initial results, therefore, reflect such considerations more than anything else.

There seems little doubt that there are considerable reserves, but finding where they are remains a major undertaking.

Here challenges exist that are not a problem back in the United States.

But solving them could lead to huge breakthroughs for companies in the U.S. and energy investors alike.

The Challenges Add Up for PGNiG
For example, successful placement of wells requires early seismic studies. Yet much of the Poland's road infrastructure cannot withstand the weight of the seismic vehicles (better known in the trade as "thumpers"). In addition, much of the support equipment - everything from pressure trucks to water control, fracking, and fluid control systems - is not available.

This means that when the second situation confronting PGNiG is considered, additional pressure is brought to bear. The government has challenged the company to move quickly. And Warsaw is providing some rather significant working capital. But PGNiG needs far more support... and the company needs it immediately.

Normally, that would seem to be a bonanza for outside specialists and providers already seasoned in developing shale gas elsewhere. Unfortunately, matters are frustrated in securing an easy import of technology and expertise. All provisions must be a result of tenders, a laborious bidding process that runs the risk of sacrificing expertise for price.

In addition, both Polish and European Union (EU) regulations make it difficult for outside technology to make its way easily to development inside the county. Even setting up a local subsidiary of a foreign company is not enough, given the need to authenticate the domestic origin of the equipment and support provided. Simply setting up a local affiliate to serve as an importer is not enough.

Yet even before the tender process can be initiated, PGNiG and the authorities must be on the same page about what must be done and what is required to do it.

That remains elusive, virtually assuring further process delays. There are a range of disagreements remaining. These include:

•the type of drilling equipment that will be allowed;
•the chemical composition of the fracking fluid;
•methods for dealing with flow back water (as much as 35% of the water put down hole in the process to blow open the rock comes right back up with the gas flow - with the water now containing a mixture of tailings, chemicals, and hydrocarbons);
•the number of wells allowed per pad;
•maximum frack stages;
•the types of equipment needed on the surface, and
•how to move this equipment to and from the drilling site.

In every basic sense, Poland is at square one in a process that it wants expedited. And at the same time, the nation wants to add another item to the agenda.

Both the government and PGNiG want to tackle the environmental concerns before they become the source of popular opposition to the gas operations.

A Win-Win For Investors
Popular opinion remains decidedly in favor of shale gas development. This mainly stems from the desire to wean the country off its reliance on Russian natural gas imports. There is also the possibility that, should significant extractable volume be discovered, a new Polish exporting capability would emerge to end users elsewhere in Europe (via existing pipeline networks), even serving wider markets as liquefied natural gas (LNG) from a terminal on the Baltic coast.

But this is Europe. As other countries have already witnessed, environmental opposition forms both domestically and regionally. PGNiG, therefore, needs to address problems surfacing at the local level in Poland and from the much larger EU perspective in Brussels.

And to its credit, that is precisely what PGNiG has decided to do.

This is not a public relations ploy.

The company intends to identify and confront the problems plaguing shale gas elsewhere. This is beginning to form, however, indirectly, in questions residents are starting to pose with local governments. Inquiries will become more visible and numerous as the drilling accelerates.

I spent most of my time in Warsaw laying out the environmental difficulties experienced in North America, and proposed a few ways to confront these problems with transparency and innovation.

My belief has always been straightforward enough. I believe that approaching the environmental problems honestly and openly provides the best way for technological advances to confront the downside drilling.

Despite the shortcomings facing Poland as it races into the shale gas age, there may also be a major opportunity here.

Here at the beginning of drilling projects, an environmental commitment may usher in a new generation of advances that enable the emergence of an energy source and introduce an accepted responsibility for the stewardship of nature.

Seems like a win-win to me.

Source :http://moneymorning.com/2012/11/27/the-brewing-shale-gas-energy-boom-that-nobody-is-talking-about/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014