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by James Burgess of Oilprice.com
In the world of a constantly changing oil and gas environment, the Montney shale basin is the sleeping giant that holds the key to accelerating Canada’s shale oil and gas boom, but the real treasure within this giant is a tight liquids-rich zone (approximately 15-20 miles wide) that has big and small players alike narrowing their focus for the potential of a giant payout.
A pervasive hydrocarbon system in the Western Canada Sedimentary Basin (WCSB) in Alberta and British Columbia, the Montney is estimated to hold 2,200 trillion cubic feet of gas, almost 29 billion barrels of natural gas liquids and over 136 billion barrels of oil. But it is the tight liquids rich fairway (approximately 15-20 miles wide) that contains high concentrations of both free condensate and natural gas liquids that everyone is pursuing in what may very soon be one of the largest commercially viable plays in the world.
Investors aren’t exactly shying away from the challenge, and the overall trend within this large basin is a shift towards liquids-rich areas, which is what the Middle Montney (the middle portion of the Montney resource) is all about.
Initially, companies targeted the Upper Montney, and the entire formation was viewed more as a dry gas play with high productivity and immense gas in place. Through the technological advances that have begun to move up to Canada and a general de-risking of the play, the Middle Montney is proving that there is a very large liquids-rich fairway available with a potential for incredible returns and economics.
Canadian supermajor Encana—a Montney shale heavyweight—is focusing its drilling to the east of the formation. Last year, Encana announced it would spend more than 25 percent of its capex for 2014 on the Montney, and the liquids-rich plays in the eastern area will get the lion’s share of this, with 80-85 new wells planned for this year alone.
There are also a number of growing mid-cap players and one micro-cap honing in on this liquids-rich scene and benefitting from supermajor drilling, including mid-cap NuVista (NVA.TO) and micro-cap Blackbird Energy (BBI.V).
Earlier this month, NuVista signed a deal to purchase another 12.5 gross sections of undeveloped land in the Montney’s liquids-rich zone, which puts its total at over 220 gross sections, while Blackbird has 117 sections of multi-zone Montney rights—again, with a focus on the liquids-rich zone.
It’s a very fast-paced game of follow the leader.
When Encana drilled a well in a previously unproven Middle Montney area and came up with two very economic middle Montney wells that both had condensate gas ratios of approximately 100 barrels of oil per million feet of gas, Navistar responded by immediately buying up land in the vicinity, driving prices up over $2.9 million per section. Blackbird followed suit, capturing a 36-section land position right between Shell and Encana and next to NuVista, which drilled a well with 2,195 boe/d.
And while there is still land available here, prices are rising fast, which makes the situation interesting for the small player like Blackbird Energy, which finds that its land value alone is higher than its current market cap.
Explorers and producers are surrounding the Middle Montney in a pincer movement, and liquids-rich sweet spots are shaping up to be the key to unlocking this next North American treasure chest. And the end of the day, the amount of shale gas under Montney’s surface would be enough to supply Canada’s needs for 145 years, making it one of the top basins in the world, outdone only by Qatar.
The California Air Resources Board and the Québec Ministry of Sustainable Development, Environment and the Fight against Climate Change announced their first joint cap-and-trade auction will take place 19 November 2014.
The two jurisdictions have worked together for several years to ensure their cap-and-trade regulations are equally stringent and can be integrated. The two programs officially linked on 1 January 2014, and have been working toward a joint auction. California held its first cap-and-trade auction in November 2012 and Quebec held its first auction in December 2013.
The November joint-auction will be held in the same online platform both parties have used for their individual cap-and-trade auctions. The platform was tested by stakeholders during a joint practice auction in August of this year. Carbon allowances sold in the auction may be used in either the California or Québec cap-and-trade programs. All participants must be registered in the Compliance Instrument Tracking System Service (CITSS) and the auction platform.
California and Québec have each committed to action to reduce emissions of greenhouse gases (GHGs). To achieve these emission reductions, each jurisdiction is implementing a portfolio of programs, including linked cap-and-trade programs.
One of the more affordable ways to cut greenhouse gas emissions is to design cities to give people clean options for using public transportation, walking and cycling and to move away from car-centric development, according to a new report released by the University of California, Davis, and the Institute for Transportation and Development Policy (ITDP).
The study by Michael Replogle, ITDP, and Lewis M. Fulton, UC Davis, examines how major changes in urban transport investments worldwide would affect urban passenger transport emissions as well as mobility by different income groups.
The study considers two main future scenarios: a baseline urban scenario calibrated to the IEA 2012 Energy Technology Perspectives 4° Scenario and the authors’ “High Shift” (HS) scenario, which projects an aggressive shift in global transport investment to far greater urban passenger travel by clean public transport and non-motorized modes, along with a reduction in the rate of growth of private vehicles and the decrease in the rates of road construction, parking garages and other ways in which car ownership is encouraged.
The study found that the High Shift scenario could save more than $100 trillion in public and private capital and operating costs of urban transportation between now and 2050 compared to the baseline scenario.
Overall, the total costs of the baseline between 2010-2050 are roughly $500 trillion ($200T in OECD and $300T in non-OECD countries). The costs of the “High Shift” (HS) are about $400 trillion ($160T in OECD and $240T in non-OECD countries). The HS scenario would also eliminate about 1.7 gigatons of carbon dioxide annually—a 40% reduction of urban passenger transport emissions—by 2050.
Further, an estimated 1.4 million early deaths associated with exposure to vehicle tailpipe emissions could be avoided annually by 2050 if governments require the strongest vehicle pollution controls and ultralow-sulfur fuels, according to a related analysis by the International Council on Clean Transportation included in the report.
Doubling motor vehicle fuel economy requirements could also reduce CO2 emissions by an additional 700 megatons in 2050.
The study shows that getting away from car-centric development, especially in rapidly developing economies, will cut urban CO2 dramatically and also reduce costs. It is also critical to reduce the energy use and carbon emissions of all vehicles.—Lew Fulton, co-director of NextSTEPS Program at the UC Davis Institute of Transportation Studies
Transportation, driven by rapid growth in car use, has been the fastest growing source of CO2 in the world. An affordable but largely overlooked way to cut that pollution is to give people clean options to use public transportation, walking and cycling. This expands mobility options, especially for the poor, and curbs air pollution from traffic.—Michael Replogle, managing director for policy at ITDP
Assumptions in the HS scenario include:
Total urban passenger mobility through 2050 (measured as passenger-kilometers, pkm) is roughly preserved from the baseline scenario in the same year and region. In some areas, such as the US and Canada, lower levels of travel reflect improved urban planning and urban re-agglomeration that lowers trip lengths. Africa experiences a large increase in total mobility in High Shift because a similar increase in transit and NMT (non-motorized transport) as occurs in other regions along with a 50% reduction in LDV travel results in much higher total travel levels than in the baseline.
HS assumes lower private ownership rates, along with lower travel per vehicle and somewhat higher occupancy rates. All of these would need to be achieved through policy and pricing initiatives, since autonomous changes in lifestyle that might affect car ownership are already included in the baseline.
For public transportation modes, the average number and length of systems, as well as the modal capacity, frequency, speeds and load factors are all increased to generate higher pkm estimates. These are all checked against data on existing high-performing systems, with the idea that the future aver- age system would perform closer to today’s best systems.
A key aspect of the projections in the High Shift scenario is growth in urban rapid transit systems—particularly rapid transit such as metro, tram/light-rail (LRT), commuter rail and bus rapid transit (BRT) systems.
Given the assumptions made and scenarios compared, the main finding is that a high- transit, high-non-motorized-vehicle scenario that (at least in the developing world) provides similar total mobility (in passenger kilometers) as a baseline, more car-dominated scenario, is likely to be more equitable, less expensive to construct and operate over the next 40 years, and to sharply reduce CO2 emissions. Unmanaged growth in motor vehicle use threatens to exacerbate growing income inequality and environmental ills, while more sustainable transport delivers access for all, reducing these ills. —Replogle and Fulton
Cutting emissions across the world’s cities.
Transportation in urban areas accounted for about 2,300 megatons of co2 in 2010, almost one quarter of carbon emissions from the transportation sector. Rapid urbanization—especially in fast developing countries like China and India—will cause these emissions to double by 2050 in the business-as-usual scenario. Among the countries examined in the study, three stand out:
United States: Currently the world leader in urban passenger transportation CO2 emissions, the US is projected to lower these emissions from 670 megatons annually to 560 megatons by 2050 because of slowing travel growth combined with sharp improvements in fuel efficiencies. But a high shift to more sustainable transportation options, along with fewer and shorter car trips related to communication technologies substituting for transportation, could further drop those emissions to about 280 megatons.
China: CO2 emissions from transportation are expected to mushroom from 190 megatons annually to more than 1,100 megatons, due in large part to the explosive growth of China’s urban areas, the growing wealth of Chinese consumers, and their dependence on automobiles. But this increase can be slashed to 650 megatons under the High Shift scenario, in which cities develop extensive clean bus and metro systems. The latest data show China is already sharply increasing investments in public transport.
India: CO2 emissions are projected to leap from about 70 megatons today to 540 megatons by 2050, also because of growing wealth and urban populations. But this increase can be moderated to only 350 megatons under the High Shift scenario by addressing crucial deficiencies in India’s public transport.
Under the High Shift scenario, mass transit access worldwide is projected to more than triple for the lowest income groups and more than double for the second lowest groups. This would provide the poor with better access to employment and services that can improve their livelihoods.
The study was funded by the Ford Foundation, ClimateWorks Foundation and Hewlett Foundation.
Michael A. Replogle and Lewis M. Fulton (2014) “A Global High Shift Scenario: Impacts And Potential For More Public Transport, Walking, And Cycling With Lower Car Use”
Gevo, Inc. has begun to produce and to ship isobutanol in railcar volumes. In the beginning of June, Gevo commenced the co-production of isobutanol and ethanol, with one fermenter dedicated to isobutanol production and three fermenters dedicated to ethanol production (Side-by-Side operational mode (SBS)).
In its 2nd quarter earnings release, Gevo reported that it would be installing distillation equipment at the plant, representing the final phase of capital for the SBS. This equipment facilitates the extraction of isobutanol from the plant, which should enable Gevo to boost production levels of isobutanol by debottlenecking the downstream side of the plant. This distillation equipment was commissioned in early September and is already showing improved results at the plant, such as:
We are on track with the SBS. We completed the installation of our isobutanol distillation column and it operates well. We are continuing to boost isobutanol production levels while simultaneously driving cost out of our production processes. We are pleased to be shipping both ethanol and isobutanol in railcar quantities. This isobutanol is destined for the solvents and specialty gasoline blendstock markets, as well as to supply our demo plant in Silsbee, TX, to convert our isobutanol into hydrocarbons such as bio-jet fuel and isooctane.
By installing the last phase of capital at Luverne, we remain confident that we will be able to achieve production levels of 50-100 thousand gallons of isobutanol per month by the end of 2014. As we continue to learn and optimize the isobutanol production process, we believe we can ultimately increase our production rate to approximately 2-3 million gallons of isobutanol per annum under the SBS, while we are producing ethanol in the other three fermenters—Dr. Patrick Gruber, Gevo CEO
Gevo’s underlying technology uses a combination of synthetic biology, metabolic engineering, chemistry and chemical engineering to focus primarily on the production and sale of isobutanol, as well as related products from renewable feedstocks.
Gevo produces isobutanol, ethanol and high-value animal feed at its first fermentation plant in Luverne, MN. Gevo has also developed technology to produce hydrocarbon products from renewable alcohols.
Gevo currently operates its first biorefinery in Silsbee, TX, in collaboration with South Hampton Resources Inc., to produce renewable jet fuel, octane, and ingredients for plastics like polyester.
Gevo’s partners include The Coca-Cola Company, Toray Industries Inc., Total SA and LANXESS, Inc., an affiliate of LANXESS Corporation, among others.
Peugeot will showcase the plug-in hybrid QUARTZ Concept for the Crossover segment at the 2014 Paris Motor Show. The QUARTZ is based on the same EMP2 platform that underpins the new 308. The composite structure and bonded panels save weight but bring stiffness, enabling the engineers to remove the central B pillar and create scissor doors. A retractable step further eases access.
QUARTZ uses a plug-in “HYbrid” drive system comprising a gasoline engine supplemented by two electric motors. A 1.6-liter THP 270 engine developed by PEUGEOT Sport is mated to a six-speed automatic transmission. The four-cylinder engine delivers 330 N·m (243 lb-ft) of torque, with a specific output of nearly 170 hp per liter.208 HYbrid Air 2L Demonstrator Peugeot is also showcasing its 208 HYbrid Air 2L Demonstrator at next month’s Paris Motor Show. (Earlier post.) The 2L stands for two liters per 100 km, equivalent to 118 mpg US, and is based on a production version of the Peugeot 208 1.2-liter PureTech 82 hp 5-seater Hatchback. Peugeot’s Hybrid Air (earlier post) is a full-hybrid solution combining compressed air and hydraulic power, with no battery required for energy storage. Hybrid Air combines the PureTech gasoline engine; a compressed air energy storage unit located beneath the trunk; a hydraulic pump/motor unit in the engine bay; and and an automatic transmission with an epicyclic gear train.
The front axle is also driven by an 85 kW electric motor with direct drive. This charges the 400V battery during deceleration and assists the combustion engine with gear changes. The rear axle also features an 85 kW electric motor for propulsion and battery charging.
There are three driving modes:
ZEV can cover up to 31 miles (50 km) on a single battery charge using the plug-in battery;
Road mode uses the combustion engine and front electric motor to enhance driving pleasure and maximise battery charging during deceleration;
Race mode harnesses the power of the engine and both electric motors to get the most out of the chassis with a limited-slip differential for increased driver engagement.
The front axle of the QUARTZ employs bespoke MacPherson struts. On the rear there’s a multi-arm suspension arrangement including the on-board electric motor. The pneumatic suspension automatically adjusts ground clearance between 300 and 350 mm. This is controlled by an optical system that uses cameras linked to the satellite navigation to read the road and anticipate changes in its surface.
At 4.5m long and 2.06m wide, the QUARTZ has an athletic stance on the road that’s further emphasized by its long hood and louvres that help improve airflow to the engine.
A glass roof flows towards the rear wings and incorporates two spoilers to further enhance its aerodynamic design. Wheel spokes have been kept to a minimum thanks to the strength of the materials and they’re covered with composite flaps. These optimize aerodynamic flow and help cool the brakes to ensure improved heat resistance.
The QUARTZ Concept is the first vehicle to employ digitally woven textile. This innovative process can create large and complex components that can be used as soon as they come off the machine. No cutting is required meaning no waste. The textile is woven with polyester fibre from recycled plastic water bottles.
The PEUGEOT i-Cockpit keeps everything at the driver’s fingertips. The compact steering wheel is inspired by competition models with controls embedded in it. This allows drivers to use the indicators, change driving modes and shift gears without taking their hands off the wheel. The head-up display provides a large, configurable screen with a central 45-degree polycarbonate strip to show additional information. The instrument panel is on both sides of the small steering wheel and the head-up display is angled towards the driver to ensure easy access to the toggle switches.
Tech CU (Technology Credit Union) is working with Tesla Motors as a preferred financing partner for their Model S, Model X and Roadster electric vehicles, offering up to 100% financing with a competitive annual percentage rate (APR).
Tesla is also a Tech CU Member Company; Tech CU provides Tesla employees with resources that include personal and business banking, commercial lending and comprehensive wealth management services that include investing and financial planning.
Tech CU is among the first credit unions in the country to offer car loans for Tesla vehicles.
Tech CU also stands behind Tesla's Model S resale value guarantee, which ensures the Model S will have the highest residual value of any high-volume, premium sedan (Audi, BMW, Mercedes or Lexus) after three years of ownership.
Founded in 1960 by the employees of Fairchild Camera and Instrument Semiconductor Division, Tech CU has served the high tech workforce in Silicon Valley for more than 50 years. Today, the credit union has more than 70,000 individual, non-profit and business members and $1.8 billion in assets.