Fracking watch: Russia figures out what CA hasn’t

April 29, 2013

By Chris Reed

Today, AB 1301, which would halt in-state fracking, comes before the Assembly Natural Resources Committee. As I noted this weekend, fracking has been scrutinized by the Obama administration, which concluded it was just another heavy industry. Groundwater contamination claims are goofy, given that fracking occurs thousands of feet under the water table. But it’s all green groups have to slow down the brown energy revolution.

Starting with Saturday’s post on Germany and continuing Sunday with China, I will blog each day about a nation that sees how fracking threatens to give the U.S. a huge economic advantage — cheaper energy — and wants a piece of the action. What is my point? That sane people making reasoned long-term decisions embrace fracking, whatever California’s Legislature does.

russia-flagFracking sanity chapter No. 3: Russia

Russia has used fracking for decades — as I noted Sunday, the technology has been around for more than 60 years but only drew enviro ire when it became far more efficient. Now Russia is gearing up fracking both to keep oil coming from old wells and to develop its immense shale reserves. This is from a Bloomberg News article last month:

“Fracking isn’t just for shale. In Russia, producers are importing techniques from the U.S. to squeeze billions of dollars of extra oil from Soviet-era fields.

TNK-BP, Russia’s third-largest producer, will use hydraulic fracturing combined with horizontal drilling in almost half the wells it sinks this year, a sixfold increase in just two years, the company said. OAO Rosneft (ROSN), OAO Lukoil (LKOH) and OAO Gazprom Neft have similar plans.

“So-called fracking, the process of blasting oil from rock by injecting a mixture of water, sand and chemicals into wells, has been used for years in Russia’s Siberian oil heartland to stimulate production. What’s new is allying it with horizontal drilling, turning the drill-bit 90 degrees to bore horizontally to reach more oil-bearing rock. The pairing was perfected in the U.S. to get economically viable flows out of shale deposits. Used in Russia, producers are recovering 15 percent more crude from aging deposits.”

And as with China, Russia is teaming in unusual ways with Western energy companies to develop its natural-gas reserves:

“The Bazhenov shale, a layer of rock the size of France that lies underneath Siberia’s producing fields, may hold more oil than Saudi Arabia, according to Russia’s subsoil agency. The geology is similar to North Dakota’s Bakken shale, where production has more than doubled in two years to 700,000 barrels a day, data compiled by Bloomberg show.

Gazprom Neft (SIBN) and partner Royal Dutch Shell Plc (RDSA) will spend $200 million over the next three years in the Salym area of the Bazhenov, according to the Russian company. Exxon Mobil Corp. (XOM) and Rosneft also plan to explore the area.”

Wow — “a layer of rock the size of France.”

As I wrote this weekend, if the state branch of the Sierra Club and the Natural Resources Defense Council get their way, California will see its last manufacturing job exit in less than a decade. Cheaper energy is an immense competitive advantage in the global economy. Nearly the entire world understands this, as my series is showing.

Fracking watch

No. 1: Germany

No. 2: China



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