China Backs Shale Revolution

Writing in the Financial Post, Peter Foster writes that Encana Corp’s announcement on Wednesday of a proposed $5.4-billion investment by PetroChina in its shale gas operations confirms the soaring importance of a resource that 10 years ago was hardly on the commercial map.

Foster says that PetroChina's move certainly seems to confirm China’s long-term orientation, coming at a time when the North American market is awash with gas,

Advances in fracking and horizontal drilling by North American companies such as Encana have opened up shale gas potential around the world. It has been suggested that PetroChina made this investment partly to gain access to technology, with an eye to its own domestic shale gas potential, but this seems an awfully expensive way to purchase expertise.

Shale gas is in its ascendency: ExxonMobil — which has spent more than $25 billion buying up shale gas assets — recently projected that natural gas will surpass coal as a global energy source by 2030.

The chief economist of the International Energy Agency, Fatih Birol, has suggested that shale gas — with its low emissions and hundreds of years of supply potential — was about to rain on the government-promoted renewables parade.

Poland, Germany, France and the U.K. are among European countries with large potential shale gas deposits. Their development could be important in freeing Europe from the threat of disruptions from its main natural gas supplier, Russia, which has already used the “gas weapon.”

Foster continues that while the shale gas revolution is in its infancy, and technical and environmental issues certainly remain, PetroChina’s proposed investment is another strong vote of confidence.

Read the full article at the Financial Post  HERE