When is Horizontal Drilling not Trespass?

Despite what I said the other day about the seeming lack of a "shale gas revolution" the recent announcement by HMG about potential changes to legislation to allow drilling beneath land owned by others does demonstate that some parts of government are trying to push exploration for shale hydrocarbons forward. Currently it seems that legal precedent gives ownership rights as far down as one can define "strata" as this briefing from the Hugh James practice explains. As the HJ piece says - the final balance between land-owners' rights and energy exploration is an interesting one.

Localism?

I missed this when it first hit the singing wire but thought it worth highlighting as it is yet more evidence of Planet Pickles' grasp of the principles of localism. According to edie the gravitational pull of Planet Pickles has pulled in 33 wind projects, or 93% of wind capacity currently at appeal. It's worth reading Dale Vince's comments in this piece: "We've worked diligently through the entire planning process, passed every test, including a public enquiry - only to have our application refused by a man that knows nothing on the subject". Quite.

Russia - Ukraine - Gas

There's been quite a lot of chatter recently about the potential effect of the Ukraine crisis on imports of Russian gas. According to a recent report from the Oxford Institute for Energy Studies about 30% of Europe's gas demand is supplied by Russia and about half of this comes via Ukraine. In a speech he made on 21 March 2014 Russian Prime Minister Medvedev suggested that Ukraine might owe Russia some $16bn. Of this, about $2bn is owed to Gazprom. The Institute paper argues that this sort of debt led to Gazprom cutting off deliveries to Ukrainian customers previously and the subsequent diversion of transit gas bound for Europe to Ukrainian consumers caused a severe tightening in European supplies. It is the threat of similar action this time around that is exercising many minds.

The Institue paper points out that the situation is less severe than in the past because the Nord Stream pipeline (Russia - Germany via a sub-Baltic Sea route) is now complete. The paper also makes soothing comments about other pipeline projects which it suggests would make transit of Russian gas through Ukraine unnecessary post 2020.

Of course, none of this alleviates the fundamental problem of over-dependence on Russia. As Nick Butler has pointed out in a recent blog post, by 2030 under certain scenarios European dependence on Russian gas could be a staggering 75%. The Russians may be desperate for foreign currency (aka dollars) but just how desperate?

If you believe George Osborne we don't have to worry: "We need to cut our energy costs. We're going to do this by investing in new sources of energy: new nuclear power, renewables, and a shale gas revolution" (my italics). One wonders whether he has been captured by the gravitational field of Planet Pickles. Someone needs to tell George that nuclear ain't cheap and it takes an inordinately long time to build; that renewables ain't cheap and many suffer from intermittency, seasonal fluctuation and diurnal fluctuation; and that there is little sign of any shale gas revolution and virtually no sign of the government trying to start one.

'Tis time for some sensible energy planning, coupled with the guts to deliver what will inevitably be a difficult policy.

The BBC and Peaches

Yesterday evening the BBC ran the death of Peaches Geldorf as its number one story on the 10 o'clock evening television news. Sure, it's a sad event...but the prime story? Come on BBC, treat us with a little respect and get serious. It's no wonder so many are gunning for the licence fee.

Fair and Balanced

I recently had a blog post by Dana Nuccitelli pointed out to me - criticising the way the BBC interprets its perceived need to be "fair and balanced". It's worth a read. I won't copy it here - I suggest you just follow the link.

Russia, Ukraine, Europe > Oil and Gas

I have heard a number of people recently warning that Russia could cut off Europe's oil and gas (a third of total Russian gas production goes to Europe) at any time. Well, I guess physically that is true but economically it would be nuts. Russia is heavily dependent upon those sales which is why, I believe, we've not seen any curtailment of the flow and are very unlikely to do so in the near future. Equally, Ukraine appears to understand that the delivery pipes passing through its territory should be left well alone.

What the current furore has pointed up, however, is a rather uncomfortable longer term outlook. Oil and gas currently represent some 70% of Russian exports and account for 50% of all state revenue. But Europe is (slowly - too slowly for some) weaning itself off fossil fuels. If Russia doesn't get other sectors of its economy revved up then in the longer term it really is going to look like a badly wounded bear - and the thought of it acting like one is not a happy one.

A New CCS Strategy

Habitues of Random Thoughts will know that I have slightly more than a passing interest in CCS. Well, now I note that the Advanced Power Generation Technology Forum has recently launched what it claims to be a new strategy for CCS development in the UK. I won't claim to have read all 104 pages - I'm not that much of a geek - but I think it's worth pointing any interested reader to the list of some 150 (yes, 150) RD&D recommendations contained within the document.

The major thrust, as one might expect, is to remove uncertanties to make CCS an economically viable process. With this in sight the strategy has as one of its 3 time-specific goals to have 30 C-capture projects across a wide variety of industryial sectors by 2020. This seems to me to be fantastically ambitious considering that we are only just at the FEED stage of the two government-sponsored projects at White Rose and Peterhead. But I guess ambition is a good thing. At least this goal is specific. The other 2 talk in terms of CCS being "routinely used" to different degrees in 2030 and 2050. Hogwash.

To my mind the big issue with CCS is managing the expectations and interfaces between different industrial players across what is always going to be a complicated process chain. This becomes even more complicated if the chain is extended (as I think is very likely) to routinely incorporate EOR. Different players have different appetites for risk, and varying understanding of the risks inherent in other parts of the chain. Apportioning the cross-chain risks will always be one major headache.