"Peak oilers have become almost extinct, destroyed by the arrival of new technologies with the U.S. leading the oil supply change," said David Hufton of oil brokerage PVM.And yet, in the same week I received another newsletter from Go Haynesville Shale predicting (from Seeking Alpha) that 2013 will see the decline in Hanesville production. Go Haynesville Shale ) Now there are a variety of reasons for the decline, a significant one being that the number of wells being drilled has fallen dramatically, as the article recognizes. But that is itself, in part, a recognition of the current economics of the business. I had a discussion, just this past week, with the daughter of an investor who had “lost his shirt” over a natural gas well investment. The difference between the hype and the reality is disturbing, and does not bode well for a stable future. Which poses the question as to what the reality of that future might be? I live in Missouri, and a number of years ago colleagues of mine evaluated the potential benefits of renewable energy and were left severely unimpressed with the potential for wind and solar in this state. At the time I was not sure what the answer for our state was. The campus where I worked until I retired, (Missouri University of Science and Technology – the new UMR) had been quite revolutionary some decades ago in starting to burn wood with coal, both as a way of controlling emissions and costs. Now those benefits were disappearing and the campus faced the prospect of finding about $25 million for a new boiler, at a time when state funds are not likely to be available, and which philanthropist wants to fund a boiler? So the campus had to be creative. And it was! approved in remarkable time and over the past summer drilling crews moved in for the initial drilling of the wells. Unfortunately (but realistically) the greatest amount of open space around campus that can be used are the parking lots. And so s number of drilling rigs appeared as the students left for the summer, and proceeded to drill a series of roughly 600 wells, each around 400 ft deep. The last was completed last month, and the wells were then lined with piping and are currently being connected into a triad of networks. Ball State was beginning their project. That project has just been dedicated and anticipates, being larger than ours, that it will save that campus around $2 million a year. It also includes some 3,600 wells by the time that the second phase of the program is completed. The idea is beginning to catch on, and there are a small but growing number of campuses now that are in the throes of the same type of effort, though in each case tailored to the individual needs of the different campuses. Hampton University in Virginia is heating their Multi-Purpose Building, Indiana Tech has restored and powered a Civil War era building, Montana Tech will use the heat from mine waters underneath the campus. In Boise, ID the ground water temperature is a little higher (around 170 degrees) and the city has used geothermal energy since 1983, and now Boise State is joining in with its own plant. As with the Montana project, so the program at New Mexico Tech has also been funded as part of the Recovery Act. Some of the potential benefits of that program have been described by the Department of Energy. However that presentation also illustrates the transience of the funding opportunity. DOE) Given that drop in funding, it is yet still possible, given the savings projected not only here but elsewhere, that this technology may still catch on and become more widely adopted. I’ll keep you posted (among other things with more technical details).
Friday, November 2, 2012
The election is now less than a week away, with two entirely different paths possible for our future as we move past the election into next year. The two approaches to energy are particularly different, but it is pointless to do any further comparison, since the airwaves have (on the rare occasion that these differences are explored) discussed these from all points on the spectrum. But nevertheless it gives an occasion to step aside from Iran, for a week, and to draw your attention to something you may have missed in all this debate, and yet is starting to happen on University campuses that are scrambling to meet that ever rising fuel bill. In the current debate both sides seem to anticipate that the energy future is rosy. As an illustration, I was struck by a comment just this last week: