Domestic shale – building local markets and attracting European investment
Domestic shale plays are in an interesting position. Because the price of natural gas is very low right now and unconventional gas plays in shale require a higher level of expertise and more equipment than conventional plays, investment is suffering. At the same time there is a significant upswing in European interest in U.S. shale fields. Recently companies from Britain, France and Norway have all made investments in domestic natural gas plays.
Paris-based Total recently took a 50 percent stake in a western Colorado shale oil lease. Yves-Louis Darricarrere, extraction and processing president for Total says, “Given the magnitude of oil shale reserves we believe that this project has an important long-term potential for global energy markets.”
GFZ German Research Centre for Geosciences, a German research firm, is conducting a six-year, $8 million study to create a comprehensive diagram of European shales using Texas’ Barnett Shale as a leading example.
To prepare for shale extraction in Europe the international firms are coming to the U.S. to get a handle on the technology and equipment for the process. Dan Jarvie, a board of advisors member of the Texas Christian University Energy Institute says, “It’s pretty wise of them to [look to the U.S.], and you almost have to go to Fort Worth to understand what the technology is all about.”
Europeans investing in natural gas through domestic shale is a positive for the sector, but at the same time natural gas producers need to seek out local markets through better marketing. Gas producers should work with utilities and product manufacturers to get their product into large metropolitan markets close to the natural gas fields. The benefits in maximizing local markets for natural gas include lower energy costs, greater tax revenue for the area and an increase in the local job market.
Sources for this post include Fort Worth Business Press and Oil Online.
Published Friday, March 20th, 2009 at 6:18 am and filed under Industry News.