Europe Goes Unconventional

The Nubucco Pipeline, the Middle East, N Africa and now shale gas. Russia, Yugoslavia - you guys better work out your differences, or Europe is going to leave you out in the cold (link).

Exxon Mobil Corp. is now exporting expertise and technology it developed in North America to gas markets in Europe. In Germany, for example, drilling and testing activity on licenses covering 1.3 million acres of the Lower Saxony Basin started in 2008.

The company also has a joint exploration program with MOL Hungarian Oil & Gas PLC in the Mako Trough in southeast Hungary. It will evaluate its findings for two to three years before deciding whether production would be commercially viable, the company said.

Meanwhile, the U.K.'s biggest gas supplier, Centrica PLC is moving beyond its traditional emphasis on searching for gas under the sea by looking to former mines to tap coal-bed methane.

It plans to drill two exploration wells in 2010, rising to eight by 2014. It has three onshore U.K. licenses in South Wales. Centrica cautions there is still a long lead period before coal bed methane, or CBM, can be produced on any commercial scale.

[...]

The volume of unconventional gas isn't yet significant on a U.K.-wide scale, supplying enough electricity for only 1,200 homes, but the potential is there, analysts say. Some forecasts suggest unconventional gas could make up 10% of U.K. supplies by 2020.

A recent report by energy consultancy Wood Mackenzie said production of CBM in the U.K. is commercially feasible at the current gas price as well as under longer-term projections. The report estimated there could be as much as four trillion cubic feet of gas available in the Cheshire Basin, at the heart of the U.K. gas market.

Another independent, 3Legs Resources from the Isle of Man, has licenses covering more than a million acres in the Baltic Basin region of Poland, where it is targeting shale gas. Company Director Kamlesh Parmar said that 3Legs has started field work to obtain seismic data in the region and plans to drill its first exploration well in early 2010.

Despite uncertainty over the scope of European resources, Wood Mackenzie's manager of unconventional gas research, Rhodri Thomas, said "there could be a material impact on European markets in 10 years plus if unconventional gases do take off."

- Brewskie

EU Biodiesel Production Increased 35% in 2008

Mind you, I find some of the current biofuel-derived sources controversial; I'm much more optimistic of future-generation biofuels, such as cellulosic ethanol or algae biofuel. Never the less, Ghawar Guzzler reports the news; no bias, no bull (link to article).

In Belgium, the European Biodiesel Board (EBB) said that European biodiesel production increased 35 percent in 2008 over 2007, despite reductions in production in Germany and Austria. The group said that production increased to 7.76 million tonnes, or 65 percent of global market share, but added that half of the biodiesel pants in Europe have been idled by poor demand.

- Brewskie

Breaking Russia's Gas Stranglehold

In regards to an earlier post, six countries have agreed to build a US-backed gas pipeline, the Nabucco, to break Russia's gas export monopoly to Europe:

Officials from six countries gathered Monday in Turkey and signed a deal to build a U.S.-backed pipeline, aimed at breaking Russia's near-monopoly on natural gas supplies to Europe.

The proposed Nabucco pipeline would run from Turkey's eastern border, through Bulgaria, Romania and Hungary, to a key gas terminal in Baumgarten, Austria.

Germany is also a partner in the deal, which is being signed in the Turkish capital, Ankara.Russia controls the current network of pipelines that supply Europe with natural gas.

To challenge the Nabucco proposal, Russia has proposed a competing natural gas pipeline to southeastern Europe. The South Stream pipeline would pass under the Black Sea and connect with Bulgaria. Russia and Italy would each control half of that pipeline.

[...]

Gas from Azerbaijan's Shah Deniz 2 field will be a crucial component of the project. European officials have raised hopes that other gas producers, such as Iraq and Turkmenistan, also might contribute to the pipeline.

Big hurdles remain for the pipeline project named after an opera by Verdi.

Consortium members must raise billions of dollars for the Nabucco project. Construction has not begun, and gas is not projected to be pumped through until 2014.Still, industry analysts called Monday's intergovernmental agreement a significant development.

"It's one of those steps that moves Nabucco out of the possible column and into the probable column," said John Roberts, an energy security specialist with Platts.

"My own guess is roughly by the end of the year, it will be pretty clear that Nabucco will be built."

- Brewskie

Recruiting for Europe's Super Grid

The European Renewables Grid Initiative is seeking to recruit additional members for a pan-European super grid:

The group was formally launched last week with a goal of promoting the adoption of regulations and policies to support the development of a pan-European super-smart grid, capable of transmitting renewable energy from remote locations such as offshore wind farms and North African solar farms, and automatically managing energy generated from distributed micro-generation technologies.

Lucile Barras, project manager at German thinktank Thema1, said that the group was looking to sign up more companies to join the founding members: WWF and NGO group Germanwatch, and grid operators Vattenfall Europe Transmission and Tennet.

"We are absolutely looking to expand the group and the initiative is open to all transmission operators, energy suppliers, renewable energy producer and green NGOs," she said.

Barras added that the goal of the new group was to lobby at a national and EU level for the wider adoption of the policy and legislative framework that will be needed to support the upgrading and expansion of existing transmission lines and the development of a pan-European super-grid.

The new group was welcomed by Antonella Battaglini, senior scientist at the Potsdam Institute for Climate Impact Research (PIK) and a leading expert in grid technologies, who argued that the roll out of a cross-border energy grid will be essential if the EU is to meet its long-term emission reduction targets.

"A clear framework for tailored investments in grid expansion will enable simultaneously large renewable expansion projects, which substantially contribute to the 2020 and 2050 targets, while stimulating the economy," she said.

- Brewskie

EU Tires of Russian Recalcitrance

Europe is getting fed up with Russia. After being left to freeze during the annual Russian-Ukrainian gas spat, the Eurozone has decided its had enough of the schizophrenic gasbag, and the trailer-trash instigator. Europe is looking to take matter into its own hands, and secure its gas future.

This won't be easy. Europe is experiencing declining production in the midst of increasing demand - consumption has risen 70% since 1990! Still, Europe is cradled in an enviable part of the world where others, bloated with gas, are willing to deal for "developed" currency: Africa, the Middle East, and Central Asia. Importing from a variety of sources could induce Russia and Ukraine to straighten out their act.

According to Businessweek, Europe's key banks and the EU presidency have reached an informal agreement to financial and political backing for the Nabucco pipeline. If constructed, this 2,050 mile winding snake will sip up gas from Azerbaijan and Turkmenistan, cut through Turkey and the Balkans, and make delivery in Central Europe - cutting out the Jerry Springer sparring partners.

Europe has also taken note to America's recent success with shale gas. GASH, an interdisciplinary shale gas research program, has recently begun a six-year initiative to map possible shale gas sites in Europe. Western Europe may possess 510 Tcf of shale gas (Canada is also looking into the same game).

Additional Russian-European pipelines that bypass Ukraine are also being considered.

- Brewskie