America's Shale Revolution
Two major deals happened yesterday in the shale oil and gas industry. France's Total SA invested $2.3 billion in Chesapeake Energy Corp. assets to explore the Utica shale formations in Ohio while China Petrochemical Corp. announced a $2.5 billion joint venture with Devon Energy to explore shale projects in five prospective new exploration areas in the US.
“These investments continue the trend of global energy dollars returning to the U.S. as the shale revolution continues,” an editorial in The Wall Street Journal argues. “Once-small (now big) U.S. companies like Chesapeake led the way, U.S. majors like Exxon and Chevron have joined the party, and now foreigners are following.”
Other international companies have joined the race for shale in recent months. Last week, SandRidge Energy sold $1 billion worth of its acreage to Spain's Repsol and Aussie giant BHP Billiton picked up an additional $15 billion of Petrohawk's shale. It makes sense—companies are investing in acreage in the US while natural gas is low ($3 per mcf) and the value of dollar is high.
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According to the Journal, most drilling booms are associated with spikes in prices, which ultimately leads to a washout. However, “the shale boom may be a paradigm shift that remakes the US energy industry.”
Today, shale gas now accounts for 34 percent of total US natural gas output, has created hundreds of thousands of jobs and will significantly lower imports of fossil fuels. However, let us not forget the potential environmental impact of a technology still arguably in its infancy. Hydraulic fracturing or “fracking” has generated mass debate in regards to safety, its impact on local water supplies and potential cause of disruptive seismic activity.
The economic benefits and energy security gained from foreign investments in America's shale industry are obvious now, but at what price will we be paying for them in the future?
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.