Friday 3 June 2011

Shale gas puts trick in magic trick.

1000 years of supply, 10000 years of supply, who knows. Some of the claims that are being banded about about the big shale gas plays would make the return of Christ seem unexciting by comparison. It is not often mentioned that the energy return on investment for shale gas is so negligibly positive at best, that you'd have to reinvest equivalent to say 95% of the resource just in getting it all out of the ground; and that's if there is any "ground" left after you have blown it to smithereens and polluted it to hell with the extraction process.

Hydraulic fracturing, the literally explosive process by which gas can be extracted from tight shale bed rock has been available since the 60s, as have all of the companies that you would regard as "big oil"- household names like BP, Exxon, Shell, Total, and so on. Proponents of shale gas claim that "new technology" has opened up shale bed gas as a new resource, which is nonsense. The big oil companies new how to do it all along, the just didn't want to do it, it doesn't make money.

The "frack job" of almost sexually inappropriate proportions by drilling company "Caudrilla" in Blackpool, England, has been revealed as the cause of two EARTHQUAKES last week, and has been put on hold (no surprise). Shale gas is already the culprit of (severe) groundwater toxic pollution- which occurs when the chemicals in the fracking solution permeate through porous rock into underground groundwater aquifiers - and is thought to cause as much as 2.5 times as much greenhouse gas pollution than coal, but now it causes earthquakes as well, whatever next! No wonder big oil has avoided it like the plague.

Shale gas "discoveries" allowed the IEA (International Energy Agency) to double it's numbers for global gas reserves, not that the shale gas had magically appeared, it had just been declared recoverable due to the entry of shale gas drilling firms into the market. To outside observers, it might have seemed as if the IEA had some sort of magic wand when it came to gas reserves, how could a finite resource always increase in size?

The oil as gas companies are responsible for the reserve growth miracle. It's not that they discover the oil/gas, it was nearly all discovered decades ago, they just keep enough of it in their back pocket to declare in the future, that way they can always (appear to) offset production with new discoveries. The word discoveries should be substituted for "revelations"; more appropriate for the conjuring trick style business they get up to with the numbers. You don't have to look far to find the oil companies boasting about the miracle of reserve growth, each year their annual reports are plastered with factoids explain that they have more than last year, despite production, without explaining how the magic trick works.

It's common sense that if shale gas was profitable, big oil would have got in the game years ago, their geologists knew about the reserves and they had the technology. The fact that the shale gas boom has minions such as Caudrilla in the UK and Chesapeak Energy in the US at the helm is testament to the equally magical nature of the modern business system. I muse that these companies only need the "prospect" that shale gas delivers to convince the gullible banksters to lend them some money. Before long, governments will hopefully make the sensible decision to ban shale gas drilling and avoid runaway climate change (if that is still possible). In doing so, they'll crash the boom and destroy a hefty chunk of those loans that Caudrilla and Chesapeak won't be able to repay, unless they really can do magic.

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