Wednesday, August 24, 2011

Junk Science Strikes Again: US Geologic Service Raises Hugely Marcellus Gas Estimates

It's a big junk science conspiracy and getting bigger.  First, as Governor Perry confidently states, a world wide conspiracy by scientists to perpetrate a climate science hoax is underway.  And now the continuing shale gas Ponzi scheme to defraud simple investors like Exxon in which again the US government is part and parcel.

The scientists at the US Geologic service are joining the shale gas conspiracy  by raising its estimate of  Marcellus recoverable reserves 42 times to 84 trillion cubic feet. How could that be? 

Read all about it in the NYT.

Ok the foregoing is snarky and as about as ridiculous as the Ponzi scheme nonsense broadly thrown at the gas industry. 

But what is sad, even dangerous, is that both climate science denial and the shale gas Ponzi scheme conspiracies are taken seriously by far too many people, though they tend to be different groups.

The US Geologic service is a highly reputable, cautious organization that had estimated the Marcellus recoverable gas reserves in 2002 at 2 trillion cubic feet.  The odds are not small that the 84 trillion cubic feet estimate will prove low.

19 comments:

  1. Concerned ScientistAugust 24, 2011 at 8:01 AM

    I'd agree with you that the USGS is too conservative in their estimates. There are still some significant unknowns but here is a good back of the envelope way to figure out the recoverable reserves.

    In the better areas:
    Each well drains 80 acres
    Each well should produce 2-20 billion cubic feet with an average of around 6 BCF (this will probably go up as fracking techniques improve)
    There are 640 acres in a square mile which is 8 wells so 8x6=48 BCF per square mile. Round that up to 50 BCF/square mile to keep things simple.
    Calculate the square miles that are outlined by the current wells and estimate for NY.

    NY looks like about 1000 square miles = 1000*50BCF=50TCF
    PA looks like it has about 3000 square miles of better acreage and another 5000 of lesser acreage where the Marcellus won't produce as well (driven by the geology). If only the better 3000 square miles is included that would be 150 TCF. Add in 25BCF/sq mile for the lesser areas and that is another 125 TCF.

    Add another 50TCF for WV.

    Add them together 50+150+125+50 = 375 TCF. And that is with current technology and a very broad brush. Fracking technology will only improve and get progressively more gas out with each well. I wouldn't be surprised if they really do get 500TCF before its over.

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  2. In the interest of full explication and gotcha blogging:
    -----------------------------------------
    "Shale reserve estimate slashed"

    "The formation, which stretches from New York to Tennessee, contains about 84 trillion cubic feet of gas, the U.S. Geological Survey said on Tuesday in its first update in nine years. That supersedes an Energy Department projection of 410 trillion cubic feet, said Philip Budzik, an operations research analyst with the Energy Information Administration."

    Read more: Shale reserve estimate slashed - Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/business/s_753018.html#ixzz1VwpvUzYH
    =====================

    Always somebody throwing cold water on things. Now we cant even believe the Government - oh, wait.

    I cant recall what Professor Engelger's estimate was.

    Stanley R Scobie, Ph.D., Binghamton, NY

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  3. The United States will slash its estimate of undiscovered Marcellus shale natural gas by nearly 80 percent after an updated assessment by government geologists.

    The formation, which stretches from New York to Tennessee, contains about 84 trillion cubic feet of gas, the U.S. Geological Survey said on Tuesday in its first update in nine years. That supersedes an Energy Department projection of 410 trillion cubic feet, said Philip Budzik, an operations research analyst with the Energy Information Administration.

    "We consider the USGS to be the experts in this matter," Budzik said. "They're geologists, we're not. We're going to be taking this number and using it in our model."

    Read more: Shale reserve estimate slashed - Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/business/s_753018.html#ixzz1Vx1LPxrI

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  4. There's a whole new batch of conspiracy theorists out there now: those questioning whether or not fracking caused our little seismic shake up yesterday. It's all over twitter and social media. Why? In my humble opinion, sensationalist headlines and a lazy (or attention span impaired) populace.

    For instance, yesterday one of the Philly newspapers ran a story with the headline: "Are Marcellus shale companies sucking streams dry?" That headline was then trotted out by anti-gas drilling proponents and "green groups" on twitter, social media, and the blog-o-sphere, without much (if any) mention of the actual content of the article. Had one went on to read the article, they would have found a very well written piece saying "no, they aren't". It documented the safeguards in place, quoted just how little the Marcellus industry takes compared to other industries and for public uses, and even interviewed SRBC (or maybe it was DRBC) field investigators who said they were all ready to go out and catch violators, but there haven't been any and the industry does a fantastic job of self-policing.

    But that misleading, sensationalist headline has left the majority of those who read it with an image in their head of fish flopping around in a dry creek bed, with water trucks speeding away from the scene of the crime.

    Same with the earthquake nonsense. Articles asking the question: "Did the earthquake happen because of fracking?" Even though the answer is a resounding NO, the seed has been planted. The seeds are adding up, and they're starting to grow.

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  5. Mike:

    Do you have a link for the Philly Inquirer story you mentioned?

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  6. Here's a link to the story Mike mentions:

    http://m.philly.com/phillycom/pm_21408/contentdetail.htm?contentguid=h3QR4xf4

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  7. The glass-half-empty story Scobie and Anonymous prefer to cite refers to the fact that the EIA has over the last year or so maintained much, much higher estimates of Marcellus gas content than the more conservative USGS.

    Did the Pittsburgh reporter receive from the EIA confirmation that it would "slash" its estimates, based on the USGS's new estimates? Or did the EIA simply say it would take a look, and the rest was all wishful inference and wool-gathering on the part of non-expert wordsmiths?

    This is the sort of precision for which modern media are no longer reliable.

    Their gleeful hopefulness -- and the wishful, gleeful hopefulness of Scobie and Anonymous -- is what's writing these headlines, and what's getting the facts constantly wrong.

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  8. Concerned ScientistAugust 24, 2011 at 12:34 PM

    It is a 42-fold increase over their previous estimate, but it is a 5-fold decrease from the 410 TCF that the EIA estimated from earlier this year.

    Here is a link to that: http://www.eia.gov/analysis/studies/usshalegas/

    I'd like to find out where they differed in their assumptions from the EIA.

    84 TCF is enough to supply the nation for 3.5 years. The gross value of 84TCF at $5/mcf is $420 billion which is not chump change.

    I imagine the USGS will be facing some tough questions on this today

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  9. My "wishful, gleeful hopefulness" is actually just my concern that EIA hasn't done due diligence and that Congress and the rest of the nation are relying on overly optimistic projections at the potential future expense of the public. You can call it a cup half empty or half full, but from a science perspective, one half of the cup has liquid, the other half doesn't.

    The USGS study is designed to account for heterogeneity across the play and more realistic assumptions that the EIA did not make because the economist that run the national energy model don't have a complete grasp of Quantification of Geologic Risk in the Conventional and Unconventional Realm and Understanding heterogeneity in US Shale
    plays. Luckily for the public, the USGS does have an understanding of those topics. Their estimates will almost certainly be revised upwards as the play develops, but by 4-5 times? Not betting my money on it. If EIA over estimated by even 2 times (much less 4), does that mean all of its other basin level analysis are off by a factor of 2 as well? Who knows? Not me

    I don't know about you, but I'd rather base US energy policy on reality instead of wishful thinking and talking points.

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  10. Mr Leahy,

    You say:

    "Their gleeful hopefulness -- and the wishful, gleeful hopefulness of Scobie and Anonymous -- is what's writing these headlines, and what's getting the facts constantly wrong."



    I dont usually see the point in blog banter, but could you explain how the USGS "facts" are any wronger or righter than the EIA "facts"?

    Stanley R Scobie, Ph.D., Binghamton, NY

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  11. Andy,
    PS
    Math problem for you...
    If natural gas is our "bridge fuel" and we count on that bridge carrying us 50 years into the future, but it only carries us a portion of the way at a higher cost that we expected, what good does a bridge do if it doesn't get us to the other side?
    Well, that's really not a math problem (aside from the whole "bridge may be shorter and more expensive than we initially thought it would be" thing), but I hope that turns your cogs at least for a moment.

    "drill as much as we can now" isn't an energy policy (neither is the "green revolution"); I'm not sure where this leaves the younger generations. Probably in the same aimless boat that they started in, drifting at the mercy of the fossil fueled current into uncharted and treacherous waters.

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  12. This is wonderful comment string. It causes me to think and ask questions. Thank you to everyone who contributed.

    A few thoughts to add. The upper end of the US Geologic Service range is 140 trillion cubic feet. Based on the production we are seeing in 2011 I would be genuinely shocked if the ultimate Marcellus production is not at least at the high end of the US Geologic Service range. My own judgment is that it will exceed the high range number by a lot. PA has 1600 producing Marcellus Wells and they are producing about 800 billion cubic feet in 12 months. There are more than 3500 Pa Marcellus wells drilled already. There will be many more. Based on the actual production numbers already on the scoreboard, the US geologic numbers are very conservative.

    I do believe that a US Energy Policy must include natural gas but be much more than just natural gas or fossil fuels. Efficiency must be the foundation. There has been too little recognition of the two increases of CAFE by President Obama and the automakers. Diversification must be another core principle and the US is making major progress on diversification with national wind capacity doubling in the last 3 years and solar capacity jumping 4 times in the last 3 years. I am also a supporter of biofuels, including corn ethanol, though it too is far from perfect and biofuels are increasing their market share. Biofuels is part of the diversification.

    At the end of the day if shale lasts 10 or 20 or 30 years or 50 years, it will be an important contribution if we use it wisely to stop operating 40 plus year old coal plants with no pollution controls and black smoke belching diesel trucks and buses. It already is helping to reduce pollution from the way electricity is made.

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  13. I know this is slightly off topic, but another study came out today questioning Howarth's Cornell study.

    Here is the link to www.thehill.com website which broke the story. If you scroll down past the article, Bob Howarth showed up and posted in the comments section to defend his study and bash the one released today. Amazing how his tune has changed!

    Please take a look at this video which shows Bob and Tony discussing the study in a room of their peers, just prior to releasing their "findings" to the public:

    "We do not intend for you to accept what we reported on today as the definitive scientific study in regards to this question...it's clearly not. We've pointed out as many times as we could that we're basing this study on in some cases questionable data...

    "A lot of the data we used are REALLY LOW QUALITY"

    Please, pretty please, with sugar on top, take a few minutes to watch this video. The change in their stance on their own report since it gained a whirlwind of publicity has changed in a STAGGERING fashion.

    http://www.youtube.com/watch?v=EHg6Ueb2t-E&feature=player_detailpage#t=2286s

    -Mike Knapp

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  14. May I throw in a vote for a very hard look at the highly inappropriate subsidies for the hydrocarbon industry. As we all know fracking has been going on for 60 years or more; welding pipelines, that's also a mature industry.

    There is often much discussion about a level playing field, without any clarity about how unlevel it is right now and for how long has it been so.

    The only thing that will quickly provide cheap and secure and reliable energy is the sophisticated use of the well-known variety of efficiency measures.

    Not just driving Priuses and turning down thermostats, but using co-generation techniques wayy more widely, serious green construction, and so on.

    It is fairly likely that the economic doldrums this country and indeed the entire world is in now (and I am pretty sure that Obama is not responsible for a flat economy in Japan, troubles in Greece, etc) is that the true cost of energy has been inexorably increasing to the point where business as usual is no longer working.

    Unconventional/shale gas, tar sands oil, imported oil - they have all been getting more and more expensive. All the cheap energy has been harvested, unless you want to stay with coal.

    There may or may not be plenty of shale gas but it is quite clear that that fuel will become relatively more and more expensive - new and badly needed regulations that will reduce safety, health and environmental impacts are clearly on the way. The cost of gas right now is low because of the economic slump and because there is lots of drilling done to hold very cheap leases by production. If and when demand for gas goes up so will the price - that's basic Econ 101.

    All of the economic analyses I have seen show that energy gained by efficiency improvements is by far cheaper than any other form - even coal.

    Stanley R Scobie, Ph.D., Binghamton, NY

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  15. Concerned ScientistAugust 25, 2011 at 8:53 AM

    This has been a good and informative thread.

    John- for the first time I can remember, I have to strongly disagree with you on an energy issue. Corn ethanol is an absolute disaster. By some analysis it uses more energy than it produces. It directly links the cost of food and the cost of oil. It probably generates more CO2 per unit of energy than gasoline. Loads of fertilizer, pesticides and soil tilling also further foul the environment. And the taxpayers get to pay for it! We can't get rid of it because it is so important to Iowa where the presidential primaries begin.

    Stanley, you are right about conservation and I am with you on that. I walk to work, try to eat vegetarian as much as possible, and have a hybrid car. But you are wrong about the Marcellus. The Marcellus Shale actually has much better economics than most conventional reservoirs. Why else do you think Shell, ExxonMobil and Chevron have moved into the basin? Those companies only are interested in oil and gas plays where they can support their enormous overhead and still make money. Even with all of the opposition to shale gas and the costs that will add, it is still worth it for them. Drilling shale gas wells is actually getting more and more efficient and cheaper when calculated on a cost per mcf produced. This will continue. The amount of gas produced from each well will also improve as frack jobs become more efficient and effective and companies devise new ways of drilling and completing the wells.

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  16. Gasoline has a negative energy balance, requiring 1 unit of energy to get back 0.8. Corn ethanol has a modest positive energy balance. Oil is imported up to 70%. corn ethanol is 100% domestic. Corn ethanol costs about one dollar less per gallon when oil is at $80. We have fought three wars in oil lands in last 20 years but no wars for ethanol. Iraq alone cost $1 trillion and taxpayers will pay the bill. Much worse are the tens of thousands dead and wounded members of our military. The flag at the state Capitol in Pa was regularly at half-staff to mourn a Pennsylvanian killed in action. FYI. The newest empirical study looking at indirect land use impacts due to biofuels finds little. Corn ethanol is our most successful du Shiite for oil in transportation so far. It is not perfect but better than gasoline. Bottom line is how bad oil is forbour economy, atonal security, and environment.

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  17. Concerned ScientistAugust 25, 2011 at 2:13 PM

    Ok these are some interesting points. I guess the next thing to do is compare the footprints of refineries, which are likely to be significant, to the whole corn ethanol footprint

    Don't we have to use the imported oil to produce the ethanol? We also use coal-fired electricity in a lot of those plants

    Can we do away with the subsidy for ethanol at this point then?

    No one would fight a war for corn ethanol, that's for sure.

    I think you could argue that ethanol is worse for the environment with all of the tilling, fertilizing and pesticide spraying. the fertilizer leads to algal blooms and dead zones

    Corn ethanol uses about ~1000 times more water per unit of energy than shale gas and ~100 times more than oil (according to Chesapeake Energy anyway)- it is very water intensive no matter who does the calculation

    Apparently ethanol and blends of ethanol and gasoline causes more air pollution than gasoline alone

    1/3 of the corn grown in the US is now for ethanol. If there is more money to be made on ethanol as the price of oil goes up, farmers will switch from food crops to corn for ethanol driving up the cost of food

    It is also causing a lot of problems with peoples engines where it is blended with gasoline. Our chainsaw died and the repair guy says it was due to ethanol in gas and he sees it all the time.

    I don't think corn ethanol is the way to go. Electricity from wind, solar, tidal, hydro, waves is the way of the future

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  18. On policy, since ethanol is lower cost than gasoline when oil is above about $60 per barrel and because the US ethanol industry now is up and running, I do support ending the subsidy payments for corn ethanol. They are ending too. I also would support ending the ethanol tariff that penalizes sugar cane ethanol.

    I support the biofuel standard that also includes a cellulosic ethanol requirement.

    I agree that corn ethanol has some environmental negatives, with the biggest probably being nitrogen run-off to water. But its impact from production is less than the impact of oil from its production, transportation, and storage. There are constant spills, leaks, and so on involving oil. It causes massive damages to water.

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  19. Here's the story behind all the spun headlines on the "slashed" shale gas reserves estimates:

    http://www.washingtonpost.com/blogs/ezra-klein/post/hold-off-on-those-marcellus-shale-obituaries/2011/08/25/gIQAyP83fJ_blog.html

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