Natural gas and the Ukraine
This piece in the New York Times caught my attention <a href=” http://www.nytimes.com/2014/03/06/world/europe/us-seeks-to-reduce-ukraines-reliance-on-russia-for-natural-gas.html?nl=todaysheadlines&emc=edit_th_20140306″>US seeks to reduce Ukraine’s reliance on Russia for natural gas</a>. It is a puff piece, but points to current conversation.
From my reading it seems we would be shipping LNG to Germany and Europe? There is only one facility able to do that in the US currently. So anyone know how this might be possible?
The article also implies the Europeans stored extra natural gas as a result of urging from a US agency…one would think they could have addressed the issue on their own especially after the troubles in Georgia rather rely on the US for advice. Are we always this self-absorbed?
i’m puzzled why your link didnt take, dan, and since us non-subscribers cant read it without the direct link. i’m going to try it here.
US seeks to reduce Ukraine’s reliance on Russia for natural gas
clicking that, i get a not found at angry bear, which is even more puzzling, because if anything i should have got a 404 at NYT….
i’ll try my own link that i got from googling the article…
U.S. Hopes Boom in Natural Gas Can Curb Putin – NYTimes.com
ok, that worked….in answer to your questions, here’s a pdf from the Congressional Research Service about exactly that:
Europe’s Energy Security: Options and Challenges to Natural Gas Supply Diversification
great inforgraphics… http://www.fas.org/sgp/crs/row/R42405.pdf
It sounds like a good play for US natural gas interests and I don’t mean just producers. Haven’t big financial companies been reported to have taken huge commodities positions? It may also be a means of increasing support for “fracking” for natural gas. I can see the head lines, “Stop the Russian Bear. Put Putin His Place. Frack or Attack? The Choice Is Ours.”
Tjs, the 2nd attempt worked.
Anyway, this political fiasco should add impetus to W. Europe opening its own gas fields via fracking. That would add gas and even oil faster than developing our export facilities which is years away.
It is past being studied in the UK and E Europe, so with these pressures the need should be obvious.
Poland — http://rt.com/business/poland-shale-gas-fracking-europe-154/
“Lane Energy Poland, controlled by ConocoPhillips, is now extracting some 8,000 cubic metres of shale gas per day at a test well in the northern city of Lebork in Poland, Reuters quotes a polish newspaper. Although the productivity of the site is lower than at gas fields in the US or Canada, it is still a breakthrough and marks the first positive result for shale gas extraction in Europe, according to the Poland’s Chief Geologist Piotr Wozniak.
Poland imports up to 70 percent of its gas from Russia and is eager to reduce its energy reliance on its neighbor. The country issued more than 100 shale gas exploration licenses to local and international firms which have drilled 48 wells so far. ”
UK — http://www.naturalgaseurope.com/fracking-uk-shale-gas-industry-2014
In it gives a good picture of the preliminary steps already underway, purchases of drilling licenses and a few sample wells being drilled. The Govt has lowered the tax levy on local Govts so that they get more revenue from the finds.
There is activity in Romania and several other EU countries.
The US administration: http://fracking.einnews.com/article/193753406
” Today – 02:30 GMT
WASHINGTON — The crisis in Crimea is heralding the rise of a new era of American energy diplomacy, as the Obama administration tries to deploy the vast new supply of natural gas in the United States as a weapon to undercut the influence of the Russian … ” (Registration required)
Finally, IIRC, know oil & gas reserves in the US were just very recently raised by 50%.
There are three unusual factors about natural gas:
1. The price differences are huge, e.g. twice as high in Europe and three times higher in Japan.
2. It has to be converted into liquefied natural gas for export, which seems to be expensive.
3. It’s a “residual good” for many oil producers, which implies supply is relatively inelastic, i.e. a higher price may not increase supply much.
“Costs of liquefaction can range from $1.50 to $2.00 per mcf…Shipping costs can vary from $0.30 to $0.90 per mcf.
Regasification…converting LNG from a liquid back to a gas so that it can be moved through the domestic natural gas pipeline transportation network…can add $0.30 per mcf to the cost of LNG. Thermal energy (heat) is required to regasify the LNG.
Total costs of liquefaction, shipping and regasification could add up to $2.10 per mcf on the low end to $3.20 per mcf on the high end. Add to this the base cost of the natural gas commodity, currently around $3.00 per mcf in the US. Bringing the total cost of delivering US produced LNG to Europe or Asia to $5.00 to $6.00 per mcf.
To put this in perspective, natural gas in the UK is currently trading around $8.00 per mcf and in excess of $15.00 per mcf in Japan.”