The Rising Influence of Rising Affluence

[OakesCS]

Gas and oil: when people see those words alone people don't seem to have a problem discerning a difference yet when the word shale is thrown in front of gas some folks start thinking about another oil source.

In the US most oil is consumed as transportation fuel (gasoline, diesel, jet A) while most natural gas is used in electrical power generation. I suspect fertilizer, urethane, and plastics production, and reforming for refining consume most of the remainder (DOE and other US agencies regularly produce reports detailing these things if you want to check). I suspect China would or has a similar pattern of consumption and consequently shale gas development could only affect their coal consumption. Since china's coal reserves aren't particularly large, a domestic gas resource would be important. How much it will affect their air pollution problem is a different matter. I suspect the best that could be hoped for is that the rate of growth in atmospheric particulate matter, NOx and SOx will slow (no diminishment) since I think they'll still need an enormous number of coal-fired plants.

Some shales do contain liquids but I'm guessing that of those that can be produced > 99% of the hydrocarbons are < C8 (generally called condensates or 'gas liquids' - terms which are sometimes inaccurate or ridiculous, respectively). Liquid transportation fuels contain mostly C8 and higher hydrocarbons.

I'd be wary of EIA estimates in general but as the article points out, having the resource doesn't guarantee supply. The part of the article attributed to the Washington Post is good. The part starting with the Bloomberg attribution is superficial crap - particularly the backhanded claim of groundwater pollution and methane release as problems which 'dog' US projects.

I'm very skeptical of china's ability to develop and produce their oil and gas resources in an efficient manner. I've heard stories of oil reservoirs ruined by typical 3rd world practices. I don't think their shale gas development will be any better.

http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2011/STAGING/local_assets/pdf/statistical_review_of_world_energy_full_report_2012.pdf

http://www.bp.com/sectiongenericarticle800.do?categoryId=9037157&contentId=7068604

http://www.eia.gov/countries/country-data.cfm?fips=CH#ng

http://www.theoildrum.com/node/9455
Note the comments about relative expense for developing resources. Ignore the gibberish about alternative energy and theories about consumptive strategies. tic-tac-toe involves more strategy.

You should also note the lack of growth in reserves/production and compare to growth in consumption.

I'm happy being in the oil and gas business. It has a marvelous future in spite of our current president.