Via: The Wall Street Journal- Shale Gas Could Fracture Energy Market
Wednesday, June 6, 2012
James Herron recently wrote a blog post on The Wall Street Journal’s website. Herron discusses how the natural gas boom could change the energy landscape of the world. He says that if the United States continues fracturing and if Europe begins the process, it could dethrone the Middle East as the world’s dominate energy exporter.
It can also lower exports, according to Herron:
Lower imports will come largely at the expense of the current established gas exporters. By 2035, gas exports from Russia and the Middle East will both be around a third lower than they would otherwise have been, the IEA estimated.
Herron also offers this warning:
However, if the shale gas industry fails to get off the ground due to growing public opposition, the dominance of existing exporters would only grow, to the detriment of consumers.
With North Carolina recently approving a fracking bill and Shell drilling for natural gas in China , it seems like world natural gas production will only increase in the years to come.
Though public opinion of fracking is mixed, at best, it doesn’t seem to be slowing down production in the short-term.
Read Herron’s entire post here.
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Shale FAQ
What are mineral rights?
Mineral rights are the rights of the owner of the property to mine or produce any resources below the surface of the property. Mineral rights are different from surface rights.
Will I get free natural gas if I allow fracking on my property?
Maybe. It depends on your particular lease agreement. Some companies allow property owners a yearly free gas allowance. But, the process of connecting your property to the gas source may be more complicated. Some companies will provide a hookup, others require the landowner to provide one.
The market realization to both the E&P worker, the E&P Stockholder, the E&P Operaotor and any J.V. Partner, or Financier who has a vested interest in result is this:
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What wells will consistenty supple BBL’s of the highest octane and volatility for the given capital needed as a) Sunk cost of capital and b) the incremental or “variable” costs to bring X Y Z Z+ to market; now speaking of market One must commence a COST BENEFIT ANALYSISIS OF SELLING TO COURNTY A FOR $8.53 HENRY HUB VS. 10.20 ON A FUTURES CONTRACT. WHAT’S THE TAKE-A-WAY capacity and can we deliver on a consistent basis with rail, truck, barge and O.-Liner(s)
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The cost benefit balance of targeting one formation in “A” township vs.”B” formation in another payzone, all comes down to Pipeline TakeAway capacity, water availability along with Frac Crew availability and cost(s). This all has to keep in mind the Henry Hub pricing for the day and where one may best transact their product then taking into account Logistics.
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