EDITOR: | August 29th, 2013 | 3 Comments

Shale marches on to market power; New graphene breakthrough; New oil supply worry

| August 29, 2013 | 3 Comments

Time for another update on the fast-moving story of shale. And this week it contained some good news for Europe’s energy future, some bad news for the nuclear industry.

London’s Daily Telegraph reports that Estonia has become the world’s first country to meet all its power needs from shale oil. Not only that, the state oil company is planning to replicate its success elsewhere, starting in Jordan. As the newspaper points out, Estonia’s shale oil industry employs a quarter of the working population, directly or indirectly. Now the state energy company, Eesti Energia, is building a project in Jordan to produce 38,000 barrels of oil a day, and then plans to develop similar schemes in Morocco, Israel and Ethiopia, thus targeting countries which are now heavily reliant on oil imports. It is also eyeing Sicily.

“We know where the world’s oil shale reserves are, we know the quality of them and we know how to access them,” the newspaper quotes Sandor Liive, Eesti Energia’s chief executive, as saying. “Oil shale doesn’t have the exploration risk of conventional oil and its reserves are at least four times larger than all crude oil reserves.”

In fact, Estonia has been digging oil shale for almost a century. When the country was part of the Soviet Union its oil shale-fired power stations sent electricity to what was then Leningrad.

Meanwhile in Poland, ConocoPhillips is now extracting 8,000 cubic metres a day of shale gas from its test well in the north of that country. As Reuters notes, this is “an amount unseen in Europe to date”. Poland is anxious to get shale gas production because it needs to reduce its reliance on Russian supplies, but three other companies (ExxonMobil, Marathon Oil and Talisman Energy) have already quit the hunt due to disappointing results. Poland consumes 15 billion cubic metres of gas a year and has estimated its shale resource at about 768 billion cubic metres, says Reuters. So far 100 exploration licences have been issued and 48 wells so far drilled.

And shale’s impact in the U.S. continues to grow, as we saw this week as Entergy announced it would close its Vermont Yankee reactor citing low energy prices triggered by the shale boom. However, this decision was just hastening a commitment already made: the Yankee reactor dates back to 1972. Also, with capacity of 650 megawatts, it doesn’t have the economies of scale that larger, more modern reactors possess. Having just one reactor at the power station means that fixed costs cannot be spread.

GRAPHITE: Meet “soft” graphene. Chi Cheng of Melbourne, Australia’s, Monash University says he and his colleagues have found a breakthrough to make much, much smaller storage batteries for mobile phones and other portable devices. It involves manipulating the single layer of carbon atoms known as graphene.

As the Chi Cheng points out, a common material used in energy storage devices is porous carbon; however, once made, traditional porous carbon has a set volume with fixed pores randomly scattered inside and out and it is not possible to jam more porous carbon into the same amount of space.

Graphene, though, is the great conductive material.

As described by Cheng on the Australian website Science Alert, the answer when using graphene is not to pack two pieces closely together. “Like magnets, when placed closer that a critical distance, graphene sheets will irreversibly adhere to each other, diminishing their surface area and, as a result, lose their capacity for energy storage”.

But he and his colleagues came up with an answer: they used liquids as a mediator between graphene sheets and managed to adjust the packing of graphene into continuous films, which they call “soft” graphene. They managed to end up with energy densities approaching 60 Watt-hours per litre which he says approaches that found in acid-lead batteries found in automobiles.

His conclusion: “We believe that implementation of this technology will revolutionise many energy sections such as fast-charging personal electronics as well as affordable, long-distance electric vehicles”.

OIL: The continuing fighting in Syria has seen that country’s oil output drop from 370,000 barrels a day to something closer to 70,000 b/d. But that is not the real worry in the oil business, it seems. The other factor is that no major pipelines cross Syria. The Financial Times reports that Libya’s oil and gas sector has been hard hit by strikes and protests. The country was almost back to production levels before the uprising which ousted Muammer Gaddafi; earlier this year, Libya got its daily output up to 1.3 million barrels a day but now is averaging 500,000 b/d. This is likely to have a greater affect on oil prices than disruptions in Syria.



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  • Robin Bromby

    Shortly after I posted this item, I saw this report from The Wall Street Journal:

    Libya’s oil production plunged Tuesday to its lowest level since 2011 after an armed group closed the country’s largest western oilfields operated by Eni SpA and Repsol SA, deputy oil minister Omar Shakmak said.

    The member of the Organization of the Petroleum Exporting Countries is currently producing 320,000 barrels per day, compared with the pre-war levels of around 1.6 million barrels, Mr. Shakmak told the Wall Street Journal.

    “Both El Feel and Sharara fields are closed which is hitting our production badly. The group behind the shutdown of the fields and the pipeline linking them to the port, were not oil workers or Petroleum Facilities Guard members and it is the defence ministry that should protect the fields and fix this problem,” he said.

    El Feel oilfield is operated by Mellitah–a joint venture between Libya’s state energy firm, the National Oil Corporation, or NOC and Italy’s Eni, while Sharara is run by Akakus–a joint venture between NOC and Spain’s Repsol.

    Mr. Shakmak said it is unclear what the armed group, which he described as “third party”, wanted or when the oilfields will resume production.

    Striking workers have recently hit eastern and central Libyan ports and effectively shut down shipments from terminals there, which account for more than half of Libya’s $60 billion of oil exports annually. The workers, who had already slashed the country’s output by more than half earlier this month, are demanding the payment of wages, as well as higher salaries or more jobs. However, officials said the situation was more precarious, with armed guards trying to sell oil without government approval.

    August 29, 2013 - 2:26 AM

    • Tracy Weslosky

      Thank you Robin for the update. Just in: quarterly banking results here in Canada top earnings yet again…the impact on Libya’s plunging oil production — will impact the North American oil & gas market positively. It is unfortunate that one man’s conflict is a catalyst for another one’s prosperity. Good update -.

      August 29, 2013 - 8:54 AM

  • Tim Ainsworth

    Thnx Robin, good to get some Eu perspective on shale oil development. Given the rapid development of shale oil what would be interesting is to get a perspective on the impact of RE use in FCC. As shale oil tends to be heavier it suggests a greater use of RE as per:

    Can’t find any info that even attempts to quantify increased La demand in FCC due to greater use of heavier shale oil but it would appear a direct relationship. Lynas data suggests FCC represent circa 16% total RE demand, second largest demand segment, so impact could be significant.

    August 30, 2013 - 6:40 AM

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