BG Spends $950 Million Adding U.S. Shale-Gas Assets

May 10 (Bloomberg) -- BG Group Plc, working with Exco Resources Inc. in a U.S. shale-gas venture, agreed to pay $950 million for further assets in the Appalachian basin.

BG will get a 50 percent interest in companies that hold Exco’s assets, giving it access to 654,000 acres, mostly in Pennsylvania and West Virginia, the company said today in a statement. The transaction will raise BG’s estimated net gas resources by 2.4 trillion standard cubic feet, it said.

The U.K. company entered into its first U.S. shale-gas project last June and subsequently agreed with Dallas-based Exco to invest about $2.8 billion through 2012 in east Texas and northern Louisiana. Shale is a rock comprising layers of sediment from which oil and gas can be extracted.

Last month BG and Exco agreed to buy Common Resources LLC for about $446 million to add holdings in east Texas.

In the latest transaction, BG and Exco will set up a 50-50 joint company to operate the exploration and production assets and a similar venture to invest in gathering and transportation, according to the statement. BG, based in Reading, England, will also acquire about 5,900 shallow producing wells owned and operated by Exco, pumping 35 million cubic feet a day, it said.

http://www.bloomberg.com/apps/news?pid=20601072&sid=atKPIfBAhZbg

Makes Fischer-Tropsch look clean by comparison.

Not sure I like the idea of BP getting big into this market.

although not as much as shale oil. Or coal.

My main concern with NG is that the cheap initial cost, combined with its domestic availability, combined with the fact that it's better than coal, is going to cause a mass migration. After which, it's going to collapse even faster than oil, and fuck us all over.

I think we saw the beta release of this in GB recently. The fact that GB apparently has learned absolutely nothing from that experience is interesting to me.

The only good thing about NG is half the CO2 per kWh. If we see a massive migration from coal/oil to NG over say next 20 years along with rollouts of low carbon sources of power that could significantly reduce CO2 emissions. As NG dries up and prices rise renewable forms of energy should be much cheaper in 2030 allowing a second migration to an even lower carbon source. Kinda a stairstep pattern to CO2 emissions.

We need to start getting realistic about choices. Even the 100% renewable fantasies don't project 100% renewable to happen until 2050. So we need to accept that some form of fossil fuel will be used in next 40 years. The amount of fossil fuels and the steepness of the usage decline can be debated but some fossil fuels will be used. Given that I would favor using the one with lowest CO2 intensity otherwise even 100% renewable by 2050 won't really matter. 40 years of coal (even is slowing declining amounts) will kill the planet.

Also I think CO2 sequestering with NG makes a lot more sense than coal because it is less CO2 to sequester and the non-carbon pollution from NG is a tiny fraction compared to coal.

Lastly:
GB?