78- www. world- petroleum. org 5.5- Technology: pushing boundaries to secure for the gas. For now, drilling activ-ity has slowed down, because of the sharp drop in gas prices since mid- 2008, threaten-ing the economics of some developments. Yet, despite the temporary lull in drilling, North America's shale- gas resources are of great strategic value: they are an indig-enous source of production, lessening reli-ance on imports. And when recovering de-mand pushes prices high enough, explora-tion activity will accelerate - keeping a cap on the cost of imports. Gas from coal seams Shales aren't the only source of uncon-ventional gas. The US is also a world leader in exploiting gas held in seams of coal ( see box). Indeed, the coal- seam gas industry is the most developed of the unconventional gas businesses. But shales have greater potential: the volume of gas that can be pro-duced by each well tends to be large, which is important because the economic value of the gas is more likely to justify the expense of investing in pipelines. Whereas a coal- seam gas well would typi-cally produce something in the order of 6,000 cubic metres a day of gas, some horizon-tal wells in the Marcellus Shale have been coming on stream at 184,000 cubic metres a day and in the Haynesville Shale at almost 480,000 cubic metres a day, says Chew. There's also considerable reserves up-side in the shale- gas sector, in which ulti-mate recovery rates are generally low. You might expect to recover 60- 70% of the gas in place in a conventional well, but in gas-shale reservoirs the figure might typically be 10- 20%. " You're leaving a lot of gas in place, which nobody likes to do," says Kleinberg. And while the US may be driving devel-opment at the moment, there is plenty of potential elsewhere. The enterprising tech-niques being developed in North America are likely to be replicated around the world - possibly significantly increasing the gas resources that are available worldwide. ?? Coal- seam gas: another unconventional story Unconventional gas comes from differ-ent types of geology. One of the most highly developed segments of the busi-ness is coal- seam gas ( CSG - also known as coal- bed methane or coal- bed gas). Natural gas adsorbed onto the sur-face of coal seams, CSG is extracted from coal seams too deep or too thin to have been mined. There are numerous CSG develop-ments in North America and Australia. Indeed, such is their prospective value that competition for control of Australia's CSG deposits has become intense; sev-eral ventures have recently been set up with the aim of liquefying gas produced from these deposits for export to buyers in Asia and South America. Difficult to tap CSG is the least prospective source of unconventional gas, however - largely because the seams in which the gas is contained are so thin. That not only means that they contain less gas, but also that it is technically more difficult to keep the well in the right part of the formation. It's a lot harder to drill a horizontal well through a formation that's 1 metre thick than through one that's 10 metres thick - go a few cen-timetres too high and the drillbit could break out of the coal seam. Finding it again could be difficult. Another problem is that initial flow rates from coal beds tend to be low. As a re-sult, operators struggle to achieve suffi-cient production to pay for pipelines to take the gas to market. The deposits are also at shallow depths, so the gas is under less pressure. That means expensive compres-sion equipment is necessary to get the gas flowing properly. CSG is better suited to ar-eas where gas pipeline infrastructure al-ready exists or to being converted to elec-tricity at the point of production. ??
79- www. energy- future. com 5.6- Technology: pushing boundaries Invasion of the algae- heads It's green and unglamorous, but it could become . green and glamorous Needing just sunlight, water and carbon dioxide ( CO2), algae - pond scum, if you prefer - have the potential to con-vert solar energy into fuel for cars, homes, planes and power generators, as well as chemical feedstocks for plastics and pharmaceuticals. Algae are the holy grail of the world's fuel- supply problems, say algae- heads: they grow very rapidly, they're rich in veg-etable oil and they don't need fertile land or fresh water - so large- scale cultivation won't necessarily have a negative impact on food and water supply. Algae - of which there are more than 100,000 strains - can double their mass several times a day and produce at least 15 times more oil per hectare than alternatives such as rape, palm, soya or jatropha, says Shell, which is working on various advanced biofuels schemes, including algae. Byrne and Company, a US renewable- en-ergy firm, says the average yearly yield per acre can produce almost 5,000 US gallons of biodiesel, compared with 70 US gallons per acre in the case of soybeans and 420 US gallons of ethanol per acre from maize ( known as corn in the US). Byrne and Company says the sunny US state of Arizona alone has the potential to produce up to 40- 60 billion gallons of liquid fuels a year - a large chunk of the 200 bil-lion US gallons of gasoline and diesel the US consumes every 12 months. There are plenty of cattle in Arizona too: dung and wastewater from the livestock industry is a handy source of fertilizer and water for the algae business. That's another big plus - algae don't need clean water. Aquaflow Bionomics, for example, produces biodiesel from wild mi-cro- algae sourced from sewage ponds in Algae, the holy grail of the world's fuel- supply problems: green and ugly, but fast growing and rich in vegetable oil