Shale Gas Discovered in Poland

photo : Energy Tribune

According to Polskie Radio's website,  PKN Orlen, the Polish refining and petrochemicals group, has discovered large quantities of shale gas in the Lublin area in the East of Poland.

The find is significant, as experts have estimated that Poland may have up to 3 trillion m3 of shale gas. Currently, Poland is reliant on Russian imports for much of its gas.

The news will also be a major boost for Poland's chemical industries, with fertiliser producers and petrochemicals manufacturers potentially set to benefit from this new gas source.

This blog has watched the development of the shale gas business with interest. There have already been significant developments in North America. It has been suggested for some time that Europe could be a rich source of shale gas. Discoveries such as that in Poland, show that the future of energy and chemical feedstock supply in Europe could be set to take a new course.

New Economic Fears Highlight Need for Manufacturing Excellence

Back in September 2009, this blog highlighted the 'new reality' faced by chemicals manufacurers.

As stated at the time "If our view is correct, we are in for a sustained period of lower volumes and reduced margins but punctuated by periods of high volatility caused by oil and currency markets. This will certainly mean that the pressure that has been experienced by the manufacturing sites during the downturn will continue."

With the current EU financial difficulties and the tightening fiscal controls in China, it appears that this statement was spot on. Although things have been generally better for manufacturers over the last 6-9 months,we are heading into very turbulent times once again, particularly in Europe and in Asia.

As I mentioned back in September, chemical manufactureres need to once again think very hard about the actions they need to take in order to survive the coming storm and to come out in good shape at the other end.

• There must be a clear focus on what has to be done to survive but this absolutely must not affect the ability to be flexible .
• A focus on cost effectiveness and value for money is essential.
• Wastes of all types must be identified and systematically eliminated using approaches such as Lean Manufacturing.
• Organisational effectiveness is a must. Staffing levels must be reviewed critically to ensure that organisations are as effective as possible and staff should be trained and ready to play their part by being able to safely and effectively start-up, shut-down, change grade and increase production rates at very short notice.
• Simply cutting numbers is not smart enough - skills must be retained but have sufficient flexibility to be available and ready, as and when required

Deepwater Horizon Incident Leads to Regulatory Reforms

photo : Upstream Today

As efforts continue to stop the flow of oil and manage the environmental impacts of the Deepwater Horizon disaster, the US Government has indicated that it will implement a series of regulatory reforms to minimise the risk of such an incident happening again.

Secretary of the Interior, Ken Salazar, has announced a series of reforms that will provide federal inspectors more tools, more resources, more independence, and greater authority to enforce laws and regulations that apply to oil and gas companies operating in US offshore areas.

Meanwhile, the question of blame is making the headlines. It was reported this week that US oil industry regulator the Minerals Management Service did not enforce the installation of a secondary shutdown system to give back up in the case of failure of the blow out valve. It is also reported that the various parties involved in the incident are already pointing the finger at each other in apportioning blame.

The immediate issues must be resolved by all parties working together to stop the leak and to address the environmental situation in the most effective manner possible. Detailed investigations and apportionment of blame will undoubtedly follow.

A technically sound and proven back up safety system has to be designed and implemented on similar offshore patforms. This is, in my view, essential in order to avoid a major loss of public and government support for the offshore oil and gas industry. With a significant proportion of the world's offshore reserves being located offshore, failure to do something different is not an option.

Shell Singapore Fully On-Line

photo : Hydrocarbons processing

Shell has announced that its integrated refinery and petrochemicals complex in Singapore is now fully on line.

Shell has long talked of highly efficient, integrated supersites being the company's blueprint for the future. The Singapore Site certainly ticks all the boxes with the following features

• Complex refinery with capability to process a wide range of crudes
• Flexible cracker using latest technology and with capability to process heavier raw materials from refinery
• World scale downstream plants with latest technologies
• Fully integrated site infrastructure
• Optimisation models to maximise margins depending on feedstock prices and availability

The site can process 500,000 bbl/day of crude and the cracker has a capacity of 800kT. All of the downstream plants are of large capacity.

According to the press release, the investment is Shell's largest ever in chemicals. As the blog noted back in November, at International eChem, we have long argued that the critical success factors for petrochemical operations are integration, size, technology, global reach and location. The SEPC complex scores top marks on all of these points.

Australia Invests in Carbon Capture and Use

photo : bp.blogspot.com

Sticking my my previous themes of Australia and environmental issues, I was interested to read that the Australian government has committed $40M to a project to capture CO2 and transform it into building materials.

The project is being run by the Calera Corporation, a company which specialises in this technology. Construction work is due to start construction this year and the facility will use carbon dioxide captured from TRUenergy's Yallourn power station.

Following the initial demonstration phase, Calera plans to capture more than 300,000 tonnes of carbon dioxide and convert it into more than 1 million tonnes of building material a year.

Calera believes that the solution is more financially attractive than any alternative carbon capture solution.

If the economics are sound, this has to be an excellent solution, with less uncertainty than carbon capture and storage. The world will undoubtedly continue to need high quanities of cement and if CO2 can be used a feedstock, rather than being released to the atmosphere as a perceived threat to climate, then this has to be a win-win solution to satisfy all parties.

Austraila Delays Emissions Trading Scheme

Australia has postponed the implementation of its proposed emissions trading scheme until 2012 at the earliest, according to news reports.

In justifying the postponment, Prime Minister Kevin Rudd said that by 2012, when the current Kyoto deal expires, governments around the world would need to make clear their new carbon reduction commitments.

Kevin Rudd has been under significant pressure from within Australia and in particular from Tony Abbott, the leader of the opposition Liberal Party.

Australia's move follows on from the uncertainties over the Cap and Trade bill in the US, which has slipped down the political agenda in recent months. These moves leave Europe increasingly isolated on the issue and has led to some member states questioning the wisdom of unilateral action on climate change. Other member states have suggested the imposition of carbon taxes at Europe's borders, to protect the competitiveness of Europe's industries.

This blog continues to argue that all manufacturing industries need a strong sustainability agenda, with increased use of renewables and a strong focus on new technologies to reduce energy consumption and waste. Government support should be for the development and implementation of such technologies, rather than trying to implement regional schemes which will do little to drive a global improvement in energy efficiency but which will lead to relocation of manufacturing plants and jobs.

As for carbon taxes, they are highly complex to implement, given the range of products to which they will need to be applied. They are virtually impossible to link back to energy efficiency and will be ultimately passed on to the consumer, thereby driving inflation.