Some final thoughts: Natural gas has taken back CERAWeek

Last year, with US natural gas down in the $2/MMBtu dumps, no one wanted to talk about gas. No one.

Tight oil! Shale oil! Metallurgical coal exports! Steam coal exports! Solar! Anything but natural gas.

But these last few days — even on IHS CERAWeek’s day one “Oil Day” — the Houston industry conference was all about gas.

The irony: because gas is so cheap.

Thus, it is ubiquitously desired: Arctic gas as LNG for Asian markets, natural gas vehicles, LNG locomotives, coal displacement by gas in power generation, gas as a petrochemical feedstock, gas replacing coal in steelmaking, and so on.

At the end of day two — the official Gas Day — an executive in the elevator to the parking garage turned around and said: “Today was crazy crowded. And I thought this was Gas Day! I didn’t think people were interested any more. Guess it’s back.”

You are correct, sir. Gas is back.

Just as gas has become the constant of all energy dialogues, what used to be considered unconventional oil and gas resource development is the new normal. It’s not even called unconventional anymore. Call it “uncooperative conventional,” said Thane Gustafson, senior director, Russian and Caspian energy for IHS.

He chaired a panel discussion on oil, in which industry execs extolled the benefits of multi-stage fracking to pull more oil and gas from Siberian fields. Gazprom Neft is fracking brownfields to reach pockets of reservoirs instead of resorting to extensive workovers.

“We are beneficiaries of technology developed in the US for shale gas,” Sergey Vakulenko, head of strategy for Gazprom Neft, said. “Suddenly, a lot of…oil and gas that was considered stranded becomes economical.”

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Horizontal drilling (another mainstay of unconventional development) will help boost tight oil production, said Boris Zilbermints, senior vice president, international projects and new business development for TNK-BP. “West Siberia will be producing at substantial rates for years to come,” Zilbermints said.

And, countries that have been loathe to get on the shale train are being remiss, said Jacek Krawiec, president and CEO of PKN ORLEN, which has shale gas concessions in Poland. Much of the rest of Europe has been too slow to take up the shale possibilities, he said, speaking on a different panel than the Russia experts. “Too much time has already been wasted,” Krawiec said.

Shale resources have come so much to the forefront that a new company formed around an existing 330,000 b/d refinery, Philadelphia Energy Solutions, chose that name, in lieu of say something with the word refinery, because Marcellus Shale gas and unconventional “is so much the future of this company,” CEO Phil Rinaldi said during a downstream panel discussion.

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  1. Ron Wagner at March 9, 2013 11:21 am

    Natural gas is the future of energy. It is replacing dirty old coal plants, and dangerous expensive nuclear plants. It will fuel cars, trucks, vans, buses, locomotives, aircraft, ships, tractors, engines of all kinds. It costs far less. It will help keep us out of more useless wars, where we shed our blood and money. It is used to make many products. It will bring jobs and boost our economy. It lowers CO2 emissions, and pollution. Over 5,300 select natural gas story links on my free blog. An annotated and illustrated bibliography of live links, updated daily. The worldwide picture of natural gas. Read in 75 nations. ronwagnersrants . blogspot . com

    • Rocket Surgeon at March 10, 2013 3:07 pm

      How do you think gas will fuel aircraft?

      Gas can contribute to aviation by replacing liquid fuels in ground transportation and saving it for aviation. It is possible to produce liquid fuels from gas, but that will not be economically viable as long as other liquids can be harvested.


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