China invests 83.7 Billion in WV Energy

[Stewy]

(11-26-2017, 01:39 AM)NATI BENGALS Wrote: Commies who wrecked their country coming to rape our land.

Sounds like a sweet deal...

No but for real.. What is China getting rights to for 80 some billion? WV natural resources for 20 years?

Invest in clean water and those popular Beijing dust masks. Or just move.

Congrats on the hopeful payday. I remember when some things were priceless and people had pride. Selling WV to China doesnt really excite me.

#1 - Most mineral rights in WV are not owned by the government,  They are owned by corporations or land owners like Synric.  So the gov't isn't giving away anything.  They have essentially paved the way for investment, which is why people like Synric will get a nice payday.  
#2 - Even if someone doesn't own the minerals, if they own the surface than they will get paid for the use of their surface to make roads and be paid for any property damage while a well is in production.
#3 - While is appears clear that China wants to invest in several aspects of energy, they will have to compete with the current entities that dominate the energy market in the upstream (finding producing) and the downstream (processing and delivering to the consumer), namely Dominion which is a 100+ year old publicly traded utility.  There's nothing WV can do to push them out or others like them.
#4 - Also there is Marathon Production Company (Valvoline/Speedway), which dominates refining and the retail gasoline market in Central Appalachia out of Russell Kentucky.
#5 - It sounds like what this company plans to invest in all aspects of energy, which will be GOOD for the people of WV, not bad.


What can the state do, you ask, to be attractive if they have no rights to well, anything?  The state can pass laws and regulations. to smooth the path between land owners and China Energy.  These could be tax cuts to encourage investment, laws requiring greater monetary incentives paid to land owners by China Energy for land use, breaks on taxes associated with invest or lower or better tax deals on  hydrocarbon production.  Deals with CE to build infrastructure (roads, bridges, temporary or permanent town with housing for workers which can be bought by the employees in the future, etc.  The list of potential benefits is legion, mostly having to do with removing taxes and regulations to encourage investment.


With that said, having gone to school in Appalachia, and having worked Appalachian Petroleum Geology in school and with Ashland Exploration for 5 years, i am HIGHLY skeptical of the Drill Deeper concept of get rich quick.  This in my mind is a fallacy.  There are multitudes of wells in the Appalachian Basin that are "Drilled Deep" and mostly in the 70's.  There are some very famous wells, that were cored for almost their entire length and have a complete record of the rock section.  These wells were drilled into the cratonic rift basement.  They found gas shows and beautiful Cambrian aged sands, but no hydrocarbon accumulations.


What studies have generally found after these deep wells were drilled is that the current day thermal maturity of the source rocks, do not match the burial depths.  The rocks are far too hot for their burial in other words.  What happened was the rocks were buried in the Paleozoic by the building of the Appalachians during the collision of Gondwana down to 30000 to 40000 feet depth, which cooked the deep source rocks, then eroded, and then uplifted 10 million years ago during a regional isostatic rebound event and eroded even more.  To simplify, rocks that were buried at over 40,000' are now at 8,000 to 15,000 across the basin due to erosion over the 400-600 million years since the North American craton was built by rifting and mountain building.  This early deep burial not only cooked off the deep source rocks but also cracked and cooked off whatever deep hydrocarbons happened to be trapped early on in the history of the basin.


As a matter of fact, in the early 1900's WV was a major producer of CO2 for the Coca Cola bottling company, because CO2 was readily available in deep wells where the methane had been cooked off below ~8,000'.  See this link - http://www.roadarch.com/beverage/wv.html


Most current production in the basin is sourced from or produced within the Devonian Shale and higher in the section.  Thus since the deeper source rocks have been cooked and hydrocarbons do not migrate down, then drilling below the Devonian into the Silurian and deeper, has been mostly unsuccessful in Appalachia.

https://pubs.usgs.gov/pp/1708/ - USGS Extensive Document on Appalachian HC potential from 2015

With the above said, I am sure there are areas where one could drill deeper, but one has to remember that the Appalachian basin is NOT under explored.  It has been explored and produced since the early 1900's.  So while I would not be surprised the State gov'ts enthusiasm and the 2015 USGS report on Appalachian HC potential could get a foreign company excited to drill, I am skeptical of their ability to out smart and out think intelligent good ole boys who have been drilling in the basin for nearly 100 years.  Having worked with many of these types of individuals at Ashland Exploration, I can tell you they weren't dumb and knew the basin coming and going.


Synric I wish you good fortune and I hope you make a bundle, but I wouldn't count my millionaire chickens before they're hatched.  hehe  Just be sure you get compensated well for any land use ANY oil and gas company pays to use your land.  Definitely consult with an O&G lawyer before singing any deals.