TPT July 2011

G lobal M arketplace

take this dollar-denominated commodity, transform it to a higher value, and export it to countries whose currencies are rising.” › Currently there is only one US facility for the training of pipeline inspectors, in Oklahoma City. With the huge boom in Marcellus Shale gas drilling, much of it in the southwestern part of Pennsylvania, construction of a new training facility for natural gas pipeline inspectors is being discussed for that area. As reported by the Pittsburgh Post-Gazette (11 April), the state’s Public Utility Commission told the governor’s Marcellus Shale Advisory Commission that the PUC needs more than the eight inspectors now monitoring thousands of miles of underground natural gas pipeline. Tom Barnes of the Post-Gazette noted that the PUC also conducts inspections for the federal Pipeline and Hazardous Materials Safety Administration, a division of the US Department of Transportation that has only 132 inspectors to cover the entire country. Of related interest . . . › The 19 April meeting of Idaho’s Oil and Gas Conservation Commission ― its second in two months ― was also the second to be held in 18 years. As noted by George Prentice in the Boise Weekly , the accelerated schedule and the standing-room-only attendance reflect a burgeoning interest in natural gas exploration in the Pacific Northwest state. The session considered the application of Bridge Resources (Denver, Colorado) to conduct what it calls “mini-fracking,” a process of shooting liquids and sand down its wells at high pressures to enhance natural gas flows. The commission, which until recently had little to say about well treatments, voted unanimously to adopt temporary rules for the process, using Wyoming’s regulations as a base model. Mr Prentice reported that Bridge, whose wholly-owned UK subsidiary is Bridge North Sea Limited, “is planning a busy summer in the wake of [the] vote.” › Exxon Mobil Corp (Houston, Texas) said its first-quarter earnings surged 69% as a benefit of high oil prices, stronger refining margins, and a rise in natural gas production. The results posted by the world’s largest publicly traded oil company reflected the recovery from recession of the broader American energy sector, which seems poised for a return to boom conditions. Other US oil companies also reported soaring profits. › As their spending on exploration and production rises by more than half over the next three years, US drilling companies such as Nabors Industries, Helmerich & Payne, and Patterson-UTI Energy will also see demand for their services go up. This is the expectation of analysts with the Australian financial services company Macquarie Capital, as outlined in an 8 April report. The analysts also look for the number of onshore horizontal rigs to rise by more than half. High oil prices are spurring demand in the US for oil produced offshore and overseas, tending to confirm Macquarie’s bright outlook for diversified oil services companies such as Halliburton. As the recovering American economy boosts the demand for gasoline, energy companies will be seeking to extract more fossil fuels ― good news for companies that own the rigs needed to reach domestic oil and gas. Dorothy Fabian , Features Editor (USA)

As reported by Business News Americas (1 April), domestic energy costs have nearly doubled over the last six years, making the cost of electric power in Brazil the third most expensive in the world. Mr Spalding said, “That hinders investment. And, if nothing is done over the next 10 years, the cost of power for industries will increase by another 20%.” The ABAL executive noted that, in 2003, energy represented 33% of Brazilian aluminium production costs of $1,069 per ton. In 2008, energy accounted for 44% of production costs totalling $1,991 per ton.

Oil and gas

Shale has offered an unexpected source of gas to the US market

After a slow period for American chemicals producers, shale gas extraction is proving a boon

“Shale gas has transformed the US energy market in the last four years, unleashing a huge supply of cheap, relatively clean fuel on the North American market at precisely the time many people thought we’d be importing liquefied natural gas from overseas.” Writing in Forbes , senior editor Daniel Fisher noted that the new gas supply has disrupted the renewable-energy market and provided a comforting ceiling to electricity prices. He also identified a beneficiary that has largely escaped notice: the US chemicals industry, whose fortunes had been dim for the better part of a decade. (“Shale Quietly Enables US Chemicals Renaissance,” 9 April) Defying the expectations of all but a handful of exponents of unconventional technologies, two of the world’s three largest gas fields ― the Marcellus Shale spanning Pennsylvania and New York, and the Barnett Shale in Texas ― have come on line since 2008, and shale gas is expected to supply 45% of the US market by 2025. Already, improvements in the technology of shale gas extraction (directional or horizontal drilling; and “fracking,” fracturing dense rocks and drilling vertical wells that turn and run horizontally underground) have gas supplies growing faster than storage capacity. As a result, one high-ranking chemicals executive told Forbes, the outlook is now surprisingly rosy for his notoriously low-margin business. Mr Fisher explained: “With a steady supply of raw materials, whether it’s NGL [n atural gas liquids] feedstocks or simply gas as a heat source for industrial processes, manufacturers can

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