July 23, 2014 By Jonathan Deal in @royaldutchshell, Breaking news on shale gas mining, Government news South Africa, Oil & Gas Company News Tags: @royaldutchshell, @shell_natgas, African National Congress, AFRIFORUM, ANC, Bonang Mohale, Challenger Energy, chevron, Chris Nissen, Energy, Fracking, hydraulic fracturing, Jacob Zuma, Jan-Willem Eggink, JONATHAN DEAL, Karoo, Rob Davies, Royal Dutch Shell, shale gas, South Africa, TKAG
17 July 2014
AfriForum and TKAG will reveal the contents and nature of an engagement with the State concerning shale gas mining (fracking) and specifically the recent announcements of President Jacob Zuma in this regard.
This will take place at a press conference at Sandton Convention Centre, 161 Maude Street Sandton, 2196 at 10h30 on Tuesday July 22nd. Press packs will be distributed after questions from the media and this will be followed by refreshments.
If you wish to attend the briefing please respond to email@example.com with the words ‘Will attend 22 July’ in the subject line. If you require an embargoed copy of the press statement and supporting documents please write to firstname.lastname@example.org.
For more detail or to request a copy of the release and supporting documents after the press conference is concluded, please contact Jeanie Le Roux on 072-959-1818 or email@example.com
Jonathan Deal CEO: Treasure the Karoo Action Group | Landline: 023-358-9903 | Cell 076-838-5150 |
An online article July 8, by oil and gas industry mouthpiece RIGZONE proclaims “SOUTH AFRICA EDGES CLOSER TO KAROO SHALE GAS DEVELOPMENT” Peppered with inaccuracies, and drawing on phrases like ‘rolling blackouts in South Africa in May of this year’, the article regurgitates the industry speculation that we have heard in this country since January 2011. Here is the article. My reply to RIGZONE on their own online comment section may not be published, and is set out underneath the RIGZONE article.
I believe that the article is poorly researched, and as one would expect biased towards the oil and gas industry that supports your publication. As proof, I mention just one point that jumps out of the text. ‘300 000 to 700 000 jobs over 25 years. (485tcf)’ Anyone who has done their homework knows that South African scientists long ago reduced that figure from 485 to 40tcf – so any estimates based on 485 are irrelevant – much like the industry hype and speculation over Monterey. No Sir, those backing shale mining in SA may feel that it is edging closer, but actually the news on shale gas globally is not good and is building a strong body of evidence against SA moving ahead under the current circumstances. Jonathan Deal, CEO, Treasure Karoo Action Group, South Africa.
Odds mounting against fracking in South Africa and elsewhere
This article is the first in a series of timelines detailing global developments in and around shale gas mining – the links will address media reports and occurrences in 2014. Separate and dynamic posts on 2013, 2012 and 2011 will follow. The current year will be updated regularly. Comment is welcomed, and submissions considered for addition to the table. AFTER VIEWING A LINK, USE YOUR BROWSER ‘BACK TO’ OPTION TO RETURN TO THIS POST
AfriForum & Treasure the Karoo Action Group
26 May 2014
SOUTH AFRICAN INSURERS POLLED OVER FRACKING RISK
Treasure the Karoo Action Group (TKAG) and AfriForum have formally approached South African Insurers and the South African Insurance Association to clarify their policy on the unique risks presented by shale gas mining and ancillary activities.
With the advent of new technology and shale gas mining spreading at a rapid pace in the United States, insurance providers are scrambling to review their polices and adjust accordingly.
For many companies, such as Nationwide, one of the largest insurance companies in the United States, a thorough review of the damages that can arise due to fracking and other drilling activities, has led to the conclusion that it is better for the company to refuse coverage altogether for any damages related to fracking.
According to an internal memo outlining the company’s policy, “After months of research and discussion, we have determined that the exposures presented by hydraulic fracturing are too great to ignore. Risks involved with hydraulic fracturing are now prohibited for General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage.” Unsurprisingly, this information has raised legal questions and valid concerns for many US home and property owners.
TKAG CEO, Jonathan Deal is of the opinion that the issue of liability for and indemnity from likely claims is something that communities, homeowners and farmers must be informed about. “The potential for loss here – as a result of an accident – or simply accumulated and unanticipated impacts over a period of time – is enormous, and anyone exposed to these risks – even road users, and people with occasional passing exposure to the activity has an undeniable right to be properly informed by their insurer ahead of time.”
A copy of the letter of enquiry in PDF format addressed to the South African Insurance Association and the specific companies is available on request from firstname.lastname@example.org
CEO: Treasure the Karoo Action Group
Julius Kleynhans Esmarie Prinsloo
Head: Environmental Affairs Head: Media Liaison
Cell: 082 829 9182 Cell: 072 332 9824
E-mail: email@example.com Email: firstname.lastname@example.org
Write-down of two-thirds of US shale oil explodes fracking myth
Industry’s over-inflated reserve estimates are unravelling, and with it the ‘American dream’ of oil independence
Next month, the US Energy Information Administration (EIA) will publish a new estimate of US shale deposits set to deal a death-blow to industry hype about a new golden era of US energy independence by fracking unconventional oil and gas.
EIA officials told the Los Angeles Times that previous estimates of recoverable oil in the Monterey shale reserves in California of about 15.4 billion barrels were vastly overstated. The revised estimate, they said, will slash this amount by 96% to a puny 600 million barrels of oil.
The Monterey formation, previously believed to contain more than double the amount of oil estimated at the Bakken shale in North Dakota, and five times larger than the Eagle Ford shale in South Texas, was slated to add up to 2.8 million jobs by 2020 and boost government tax revenues by $24.6 billion a year.
Industry lobbyists have for long highlighted the Monterey shale reserves as the big game-changer for US oil and gas production. Nick Grealy, who runs the consultancy No Hot Air which is funded by “gas and associated companies”, and includes the UK’s most high-profile shale gas fracker Cuadrilla among its clients, predicted last year that:
“… the star of the North American show is barely on most people’s radar screens. California shale will… reinvigorate the Golden State’s economy over the next two to three years.”
This sort of hype triggered “a speculation boom among oil companies” according to the LA Times. The EIA’s original survey for the US Department of Energy published in 2011 had been contracted out to Intek Inc. That report found that the Monterey shale constituted “64 percent of the total shale oil resources” in the US.
The EIA’s revised estimate was based partly on analysis of actual output from wells where new fracking techniques had been applied. According to EIA petroleum analyst John Staub:
“From the information we’ve been able to gather, we’ve not seen evidence that oil extraction in this area is very productive using techniques like fracking… Our oil production estimates combined with a dearth of knowledge about geological differences among the oil fields led to erroneous predictions and estimates.”
The Intek Inc study for the EIA had relied largely on oil industry claims, rather than proper data. Hitesh Mohan, who authored the Intek study for the EIA, reportedly conceded that “his figures were derived from technical reports and presentations from oil companies, including Occidental Petroleum, which owns the lion’s share of oil leases in the Monterey Shale, at 1.6 million acres.” Mohan had even lifted his original estimate for the EIA to 17 billion barrels.
Geoscientist David Hughes, who worked for the Geological Survey of Canada for 32 years, said:
“The oil had always been a statistical fantasy. Left out of all the hoopla was the fact that the EIA’s estimate was little more than a back-of-the-envelope calculation.”
Last year, the Post Carbon Institute (PCI) published Hughes’ study,Drilling California: A Reality Check on the Monterey Shale, which conducted an empirical analysis of oil production data using a widely used industry database also relied on by the EIA. The report concluded that the original EIA estimate was “highly overstated,” and unlikely to lead to a “statewide economic boom…. California should consider its economic and energy future in the absence of an oil production boom.”
A spokesman for the Institute, Tod Brilliant, told me:
“Given the incredible difference between initial projections of 15 billion barrels and revisions to 600 million, does this not call into account all such global projections for tight oil?”
As I’d reported earlier in June last year, a wider PCI study by Hughes had come to similar conclusions about bullish estimates of US shale oil and gas potential, concluding that “light tight oil production in the USA will peak between 2015 and 2017, followed by a steep decline”, while shale gas production would likely peak next year. In that post, I’d pointed out previous well-documented, and alarmingly common, cases of industry over-estimates of reserve sizes which later had been questioned.
Analysts like Jeremy Leggett have said, citing exaggerated oil industry estimates, that if reserve and production reality are indeed significantly lower than industry forecasts, we could be at risk of an oil shock as early as within the next five years.
The latest revelations follow a spate of bad news for industry reassurances about the fracking boom. New research published this month has found that measured methane leaks from fracking operations were three times larger than forecasted. The US Environment Protection Agency therefore “significantly underestimates” methane emissions from fracking, by as much as a 100 to a 1,000 times according to a new Proceedings of the National Academy of Sciences study published in April.
The Associated Press also reported, citing a Government Accountability Office investigation, that the US Interior Department’s Bureau of Land Management had failed to adequately inspect thousands of oil and gas wells that are potentially high risk for water and environmental damage.
Despite the mounting evidence that the shale gas boom is heading for a bust, both economically and environmentally, both governments and industry are together pouring their eggs into a rather flimsy basket.
According to a secret trade memo obtained by the Huffington Post, the Obama administration and the European Union are pushing ahead with efforts to “expand US fracking, offshore oil drilling and natural gas exploration”, as well as exports to the EU, under the prospective Transatlantic Trade and Investment Partnership (TTIP) agreement.
Dr. Nafeez Ahmed is an international security journalist and academic. He is the author of A User’s Guide to the Crisis of Civilization: And How to Save It, and the forthcoming science fiction thriller, Zero Point. Follow him on Facebook and Twitter @nafeezahmed.
Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California’s vast Monterey Shale deposits, deflating its potential as a national “black gold mine” of petroleum.
Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said.
The new estimate, expected to be released publicly next month, is a blow to the nation’s oil future and to projections that an oil boom would bring as many as 2.8 million new jobs to California and boost tax revenue by $24.6 billion annually.
The Monterey Shale formation contains about two-thirds of the nation’s shale oil reserves. It had been seen as an enormous bonanza, reducing the nation’s need for foreign oil imports through the use of the latest in extraction techniques, including acid treatments, horizontal drilling and fracking.
The energy agency said the earlier estimate of recoverable oil, issued in 2011 by an independent firm under contract with the government, broadly assumed that deposits in the Monterey Shale formation were as easily recoverable as those found in shale formations elsewhere.
The estimate touched off a speculation boom among oil companies. The new findings seem certain to dampen that enthusiasm.
Kern County in particular has seen a flurry of oil activity since 2011, with most of the test wells drilled by independent exploratory companies. Major oil companies have expressed doubts for years about recovering much of the oil.
The problem lies with the geology of the Monterey Shale, a 1,750-mile formation running down the center of California roughly from Sacramento to the Los Angeles basin and including some coastal regions.
Unlike heavily fracked shale deposits in North Dakota and Texas, which are relatively even and layered like a cake, Monterey Shale has been folded and shattered by seismic activity, with the oil found at deeper strata.
Geologists have long known that the rich deposits existed but they were not thought recoverable until the price of oil rose and the industry developed acidization, which eats away rocks, and fracking, the process of injecting millions of gallons of water laced with sand and chemicals deep underground to crack shale formations.
The new analysis from the Energy Information Administration was based, in part, on a review of the output from wells where the new techniques were used.
“From the information we’ve been able to gather, we’ve not seen evidence that oil extraction in this area is very productive using techniques like fracking,” said John Staub, a petroleum exploration and production analyst who led the energy agency’s research.
“Our oil production estimates combined with a dearth of knowledge about geological differences among the oil fields led to erroneous predictions and estimates,” Staub said.
Compared with oil production from the Bakken Shale in North Dakota and the Eagle Ford Shale in Texas, “the Monterey formation is stagnant,” Staub said. He added that the potential for recovering the oil could rise if new technology is developed.
A spokesman for the oil industry expressed optimism that new techniques will eventually open up the Monterey formation.
“We have a lot of confidence in the intelligence and skill of our engineers and geologists to find ways to adapt,” said Tupper Hull, spokesman for the Western States Petroleum Assn. “As the technologies change, the production rates could also change dramatically.”
Rock Zierman, chief executive of the trade group California Independent Petroleum Assn., which represents many independent exploration companies, also sounded hopeful.
“The smart money is still investing in California oil and gas,” Zierman said.
“The oil is there,” Zierman said. “But this is a tough business.”
Environmental organizations welcomed the news as a turning point in what had been a rush to frack for oil in the Monterey formation.
“The narrative of fracking in the Monterey Shale as necessary for energy independence just had a big hole blown in it,” said Seth B. Shonkoff, executive director of the nonprofit Physicians Scientists & Engineers for Healthy Energy.
J. David Hughes, a geoscientist and spokesman for the nonprofit Post Carbon Institute, said the Monterey formation “was always mythical mother lode puffed up by the oil industry — it never existed.”
Hughes wrote in a report last year that “California should consider its economic and energy future in the absence of an oil production boom from the Monterey Shale.”
The 2011 estimate was done by the Virginia engineering firm Intek Inc.
Christopher Dean, senior associate at Intek, said Tuesday that the firm’s work “was very broad, giving the federal government its first shot at an estimate of recoverable oil in the Monterey Shale. They got more data over time and refined the estimate.”
For California, the analysis throws cold water on economic projections built upon Intek’s projections.
In 2013, a USC analysis, funded in part by the Western States Petroleum Assn., predicted that the Monterey Shale formation could, by 2020, boost California’s gross domestic product by 14%, add $24.6 billion per year in tax revenue and generate 2.8 million new jobs.