Zittel shale gas European-perspective-14-may-2013-2
Upcoming SlideShare
Loading in...5
×
 

Like this? Share it with your network

Share

Zittel shale gas European-perspective-14-may-2013-2

on

  • 1,570 views

Drawing on his 'Fossil and Nuclear Fuels: The Energy Outlook' report for the Energy Watch Group, Werner Zittel explains how shale gas production in Europe will be expensive to extract and not make a ...

Drawing on his 'Fossil and Nuclear Fuels: The Energy Outlook' report for the Energy Watch Group, Werner Zittel explains how shale gas production in Europe will be expensive to extract and not make a significant impact on European gas prices or the import dependency of select EU Member States.

Statistics

Views

Total Views
1,570
Views on SlideShare
1,570
Embed Views
0

Actions

Likes
0
Downloads
25
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

CC Attribution-ShareAlike LicenseCC Attribution-ShareAlike License

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Zittel shale gas European-perspective-14-may-2013-2 Presentation Transcript

  • 1. ludwig bölkowsystemtechnikShale Gas – European PerspectivesDr. Werner ZittelLudwig-Bölkow-Systemtechnik GmbH · OttobrunnZittel@LBST.deEuropean Parliament, Brussels, 14th May 2013
  • 2. ludwig bölkowsystemtechnik• Survey of conventional gas production and demand• Natural gas prices• Unconventional gas resources in Europe• Example Poland• Example - Germany• Summary
  • 3. ludwig bölkowsystemtechnikNatural gas production in Europe
  • 4. ludwig bölkowsystemtechnik010203040506070801950 1960 1970 1980 1990 2000 2010Billion m³/yrData Source: IHS 2006, BP 2012GermanyPolandItalyYearNatural gas production in Italy, Poland and Germany
  • 5. ludwig bölkowsystemtechnik24681012141980 1990 2000 2010Billion m³/yrSource: Department of Energy, Nov 2012Natural gas production in Denmark
  • 6. ludwig bölkowsystemtechnikEach area corresponds to theCombined contribution from allFields developed in one yearYearbillion m³/yrSource: DTI May 2012Natural gas production in UK
  • 7. ludwig bölkowsystemtechnik0204060801001201980 1985 1990 1995 2000 2005 2010NPD, Feb 2013Billion m³/yrTrollSleipner-OstAsgardOrmen-LangeSnoehvitKvitjebornNatural gas production in Norway
  • 8. ludwig bölkowsystemtechnikNatural gas production in the Netherlands and ForecastSource: NL – oil and gas portal 2012GroningenSmall fieldsTo be discoveredKnown undeveloped fields
  • 9. ludwig bölkowsystemtechnik0204060801001201960 1970 1980 1990 2000 2010 2020 2030Billion m³/yrDatenquelle: NL Olje- en Gasportaal 2012Yet to findYet to developOther producing fieldsGroningenOffshore fieldsSmall onshore fieldsNatural gas production in the Netherlands and Forecast
  • 10. ludwig bölkowsystemtechnikNatural gas prices and demand
  • 11. ludwig bölkowsystemtechnik01002003004005006001990 1995 2000 2005 2010Index(1990=100)EU 1990=100US 1990=100BAFA 1990=100Source: BP Statistical Review of World Energy 2012, BAFA 2013Natural gas price in USA, Europe and Germany
  • 12. ludwig bölkowsystemtechnik051015202530351990 1995 2000 2005 2010Source: Import prices: http://www.bmwi.de/BMWi/Navigation/Service/bestellservice,did=53736.htmlIndustry prices: http://www.bmwi.de/Redaktion/Inhalte/Downloads/egasjahr-september-2003,property=pdf.pdf2003 LBST estimate€/MWh (EURO)Natural Gas import priceGermanyhttp://www.bafa.de/1/de/service/statistiken/energieinfo/Natural gas price in Germany
  • 13. ludwig bölkowsystemtechnik0204060801001201965 1975 1985 1995 2005BcmGermany United KingdomFrance Czech RepublicDenmark FinlandGreece HungaryRepublic of Ireland ItalyNetherlands NorwayPoland PortugalSpain AustriaBelgium & Luxembourg SlovakiaNatural Gas consumption in EuropeSource: BP Statistical Review of World Energy 2012, IEA Monthly Natural Gas Survey January 2013
  • 14. ludwig bölkowsystemtechnik0501001502002503003504004505001965 1970 1975 1980 1985 1990 1995 2000 2005 2010BcmSlovakia Belgium & LuxembourgAustria SpainPortugal PolandNorway NetherlandsItaly Republic of IrelandHungary GreeceFinland DenmarkCzech Republic FranceUnited Kingdom GermanyNatural gas consumption in EuropeSource: BP Statistical Review of World Energy 2012, IEA Monthly Natural Gas Survey January 2013
  • 15. ludwig bölkowsystemtechnikShale gas Resources
  • 16. ludwig bölkowsystemtechnikShale gasTight gasCBMSource: Schlumberger 2009Potential gas shales in Europe (2009 view)
  • 17. ludwig bölkowsystemtechnikAssessed Shale gas basinsWith Resource estimateWithout resource estimateSoure: World Shale GasResources: An initial AssessmentOf 14 Regions outside the United States,US-EIA, April 2011Shale gas basins in Europe (2011 view)
  • 18. ludwig bölkowsystemtechnik01000200030004000500060007000 conv.Gas reservesconv. GasreservesNatural gas reserves in Europe ?Source: DENA/BGR 2012Bcm
  • 19. ludwig bölkowsystemtechnik01000200030004000500060007000conv. Resourcesconv. ReservesNatural gas reserves and resources in Europe?Source: DENA/BGR 2012Bcm
  • 20. ludwig bölkowsystemtechnik01000200030004000500060007000CBM - ResourcesShale GasResourcesconv. Resourcesconv. ReservesNatural gas reserves and resources in Europe?Source: DENA/BGR 2012Bcm
  • 21. ludwig bölkowsystemtechnikNatural gas reserves in Europe• Natural gas reserves in Europe are small and in decline• Unconventional natural gas reserves are zero!• Unconventional natural gas resources possibly are large,however the validity of data is uncertain(huge discrepancies betwen different estimates)• The „below ground“ factors are irrelevant,important is the size and speed of possible new well developments
  • 22. ludwig bölkowsystemtechnikBreak Even Costs
  • 23. ludwig bölkowsystemtechnikDeutsche Bank Assessment: Europe (25 Jan 2013)May-13
  • 24. ludwig bölkowsystemtechnikWood Mackienzie Assessment UK 2013• „[…] the commercial viability of the UK’s shaleresources is yet to be proven and will only bepossible if the subsurface is as good as thevery best shale plays in North America.“Niall Rowantree, Wood Mackenzie, Petroleum Review, March 2013May-13
  • 25. ludwig bölkowsystemtechnikZEW Expert Survey• Survey of 200 scientific and industrial experts: „Above whichstable level of wholesale gas prices do you expect a significantincrease in the production of unconventional natural gas in theEU?• Average of answers: 40-50 EUR/MWh (15 – 19 $/mmBtu)May-13Source: ZEW Energiemarktbarometer, Schwerpunkt Energiemarkt, Sonderteil ZEWnews, Januar/Februar 2013EUR/MWhCal 15NBP
  • 26. ludwig bölkowsystemtechnikZEWDeutsche Bank Research:The development of shale gas wells in Europerequires rising natural gas pricesof 40-50 €/MWhin average
  • 27. ludwig bölkowsystemtechnikProduction scenarios
  • 28. ludwig bölkowsystemtechnikHistorical data: OECD 2008,, NPD 2012, BP 2012; Forecast: LBST 2013UK: DTI (2012 aus Jan-Jul extrapoliert);02004006008001960 1980 2000 2020LNG_Imports from North AfricaImports from RussiaNorwayotherDenmarkGermanyItalyNetherlandsUKDemand (WEO 2012)Billion m3/yrDemandWEO 2012Europe: natural gas production (EWG-scenario) and demand (WEO 2012)
  • 29. ludwig bölkowsystemtechnikHistorical data: OECD 2008,, NPD 2012, BP 2012; Forecast: LBST 2013UK: DTI (2012 aus Jan-Jul extrapoliert);02004006008001960 1980 2000 2020LNG_Imports from North AfricaImports from RussiaNorwayotherDenmarkGermanyItalyNetherlandsUKDemand (WEO 2012)Billion m3/yrDemandWEO 2012Import demandEurope: natural gas production (EWG-scenario) and demand (WEO 2012)
  • 30. ludwig bölkowsystemtechnikHistorical data: OECD 2008,, NPD 2012, BP 2012; Forecast: LBST 2013UK: DTI (2012 aus Jan-Jul extrapoliert); WEO 201202004006008001960 1980 2000 2020LNG_Imports from North AfricaImports from RussiaNorwayotherDenmarkGermanyItalyNetherlandsUKWEO 2012 incl. ShalegasDemand (WEO 2012)Billion m3/yr?DemandWEO 2012ProductionWEO 2012Import demandEurope: natural gas production (EWG/WEO 2012) and demand (WEO 2012)
  • 31. ludwig bölkowsystemtechnikHistorical data: OECD 2008,, NPD 2012, BP 2012; Forecast: LBST 2013UK: DTI (2012 aus Jan-Jul extrapoliert); WEO 201202004006008001960 1980 2000 2020LNG_Imports from North AfricaImports from RussiaNorwayotherDenmarkGermanyItalyNetherlandsUKWEO-2012 conventionalWEO 2012 incl. ShalegasDemand (WEO 2012)Billion m3/yr?Shale gas(WEO 2012)ProductionWEO 2012DemandWEO 2012Europe: natural gas production and demand; expected shale gas production(WEO 2012)
  • 32. ludwig bölkowsystemtechnikSource: WEO 2012Unconventional gas production in 2035 as seen by IEA in WEO 2012
  • 33. ludwig bölkowsystemtechnikUSA Austria GermanyProducing gas wells 461,388 206 516Producing oil wells 363,459 689 1128Share of domestic production ~90 % ~ 10% ~ 10%Population density and present oil/gas activity
  • 34. ludwig bölkowsystemtechnik0200400600800100012001400160018002000janaugmrzoktmaidezjulfebsepaprnovjunjanaugmrzoktmaidezjulfebsepaprnovjunjanaugmrzokt2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Mill. m³/monthAssumption:65 new wells per month (=780 wells/yr)For 48 month (=3120 wells)IP 1,5 Million m³/monthEUR= 28 Mio. m³/wellDecline 5.5% per monthWEO 2012 Scenario: required wells to produce 20 billion m³/yr shale gas
  • 35. ludwig bölkowsystemtechnik0200400600800100012001400160018002000janaugmrzoktmaidezjulfebsepaprnovjunjanaugmrzoktmaidezjulfebsepaprnovjunjanaugmrzokt2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Mill. m³/month Assumption:40 new wells per month (=480 wells/yr)For 48 month (=2000 wells)IP 2,5 Million m³/monthEUR= 45 Mio. m³/wellDecline 5.5% per monthWEO 2012 Scenario: required wells to produce 20 billion m³/yr shale gas
  • 36. ludwig bölkowsystemtechnik0200400600800100012001400160018002000janaugmrzoktmaidezjulfebsepaprnovjunjanaugmrzoktmaidezjulfebsepaprnovjunjanaugmrzokt2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Mill. m³/month Assumption:40 new wells per month (=480 wells/yr)For 100 month (=4000 wells)IP 2,5 Million m³/monthEUR= 45 Mio. m³/wellDecline 5.5% per monthWEO 2012 Scenario: required wells to produce 20 billion m³/yr shale gas
  • 37. ludwig bölkowsystemtechnikWEO 2012 Scenario: required wells to produce 20 billion m³/yr• The production of 20 billion m³/yr in 2030 would amount to2-3% of European gas demand• The production of 20 billion m³/yr of shale gas in Europe wouldrequire 500 – 800 new wells per year(Based on EUR of 30 – 45 million m³/well and 5.5% monthly decline rate)• About 140 rigs are operating in Europeof which at least 80 rigs are drilling for oil• Such a senario would require the 5 – 10 fold increase of drilling activity• The European infrastructure is not adapted to such activities(Few rigs, too less educated staff, no regional gas gathering andtransport infrastructure…)
  • 38. ludwig bölkowsystemtechnikExample PolandProduction Net imports Price Import costCoal ~ 80 Mt/yr -4 Mt/yr ~ 100€/t --Oil < 1 Mt/yr ~27 Mt/yr ~ 600 €/t ~16 billion €/yrNaturalGas43 TWh/yr(4.3 bcm/yr)95 TWh/yr(9.5 bcm/yr)~ 30 €/MWh ~ 3 billion €/yrSource: OECD Energy Balances of OECD Countries
  • 39. ludwig bölkowsystemtechnikThe replacement of 50% of Polish gas imports by domestic shale gasproductionwould require the production of 3 billion m³/yr shalegasThis would require the completion ofabout 5-10 new wells per month, or 60 – 120 new wells per year[Assumption: EUR = 30-50 million m³/well; 5.5 % monthly decline rate]WEO 2012:The average EUR per shale gas well amounts to 1 bcf (~27 million m³)Example Poland
  • 40. ludwig bölkowsystemtechnikExample Germany
  • 41. ludwig bölkowsystemtechnikSource:Risikostudie Fracking,Exxon Dialogprozess, May 2012Unconventional gas in Germany
  • 42. ludwig bölkowsystemtechnikkmkmPotential field development in NRW (200 km²; 22 well pads; 14 wells/pad)Well pad (100x100 m²)Village+200mHouse+100mPipelineGas purification plant
  • 43. ludwig bölkowsystemtechnik01.000.0002.000.0003.000.0004.000.0005.000.0001998199920002001200220032004200520062007200820092010TJNatural gas supply (including exports) and consumption in GermanySource: BAFA 2010 (Werte für 2010 aus Jan – Okt extrapoliert)Production in GermanyConsumption100 bill. m³10 bill. m³
  • 44. ludwig bölkowsystemtechnik01.000.0002.000.0003.000.0004.000.0005.000.00019982001200420072010201320162019202220252028TJNatural gas supply (including exports) and consumption in GermanySource: BAFA 2010 (Werte für 2010 aus Jan – Okt extrapoliert)Production in Germany(from 512 gas wells)Consumption100 bill. m³10 bill. m³
  • 45. ludwig bölkowsystemtechnik01.000.0002.000.0003.000.0004.000.0005.000.00019982001200420072010201320162019202220252028TJNatural gas supply (including exports) and consumption in GermanySource: BAFA 2010 (Werte für 2010 aus Jan – Okt extrapoliert)Production in Germany(from 512 gas wells)Consumption100 bill. m³10 bill. m³Scenario calculation with30 new well developments/yrfor 8 years:250 shale gas wells withcumulative production of14 billion m³
  • 46. ludwig bölkowsystemtechnikSummary
  • 47. ludwig bölkowsystemtechnikSummary• Conventional gas production is in steep decline (in Europe)• Gas companies expect rising gas prices• Europe is densely populated, oil and gas drilling activity is low• Drilling sites are close to or in cultivated agricultural areas=> conflicts with interests of rural population are apparent• The contribution of domestic shale gas production to EU gas supplywill be small (~ 2 – 3 % according to WEO 2012)=> domestic shale gas production will not have an influence on gas prices=> unconventional gas production in Europe will not solve anyfuture European energy supply problem,moreover the focus on it may delay investments into adequate technologies
  • 48. ludwig bölkowsystemtechnikThank you!
  • 49. ludwig bölkowsystemtechnikAssumptions:Initial production: 4 mill m³/month/wellDecline rate : 7% per monthcum production: 50 mill. m³ per wellDrilling activity: 30.000 m per yearScenario with 120 new wells within 4 years (cum production: 7 billion m³)
  • 50. ludwig bölkowsystemtechnikScenario with 240 new wells within 8 years (cum. Production: 14.3 billion m³)Assumptions:Initial production: 4 mill m³/month/wellDecline rate : 7% per monthcum production: 50 mill. m³ per wellDrilling activity: 30.000 m per year(depth: 1000 m per well)
  • 51. ludwig bölkowsystemtechnikSource: LBEG, annual reports 1997 - 2010Gas production from „Söhlingen“
  • 52. ludwig bölkowsystemtechnikSource: LBEG Annual Report 2010Proven and Probable Gas Reserves in Germany (conventional)1980 2010Year400100200300Billion m³Proven ReserveProbable Reserve
  • 53. ludwig bölkowsystemtechnikSource: Grünspecht February 2012Possible Production Scenario in „Weinviertel“50 well padswith 25 wells each~5 km
  • 54. ludwig bölkowsystemtechnikAssumptions:Cum production per well: ca. 70 mill. m³Decline rate 6% per monthDrilling activity: 60.000 m/yearAustria: Scenario calculation 70 production wells within 6 years(depth 5,000 m)Gas consumption of AustriaCumulative production until 2030: ~ 6 billion m³