Business | Oil & Gas
US natural gas producers turn to shale to boost supplies
It wasn't long ago that US producers were struggling to find new natural gas supplies to keep up with growing demand, as rapidly depleting onshore and offshore conventional wells stirred fears of supply shortfalls.
- Agencies
- Published: 00:02 October 1, 2008
New York: It wasn't long ago that US producers were struggling to find new natural gas supplies to keep up with growing demand, as rapidly depleting onshore and offshore conventional wells stirred fears of supply shortfalls.
Some even touted a "peak gas theory", predicting domestic gas production was in permanent decline like oil.
But a lot has changed.
After nine years of almost no growth in gas production through 2006, domestic output is booming, up about 8 per cent this year to nearly 60 billion cubic feet per day, with another 4 per cent increase expected next year.
The sharp gains have come primarily from shale gas, or gas trapped in sedimentary shale beds found across North America. While more difficult and costly to extract, shale has become a big factor in growing supplies as conventional wells decline.
"Shale production has been growing on an exponential curve for the last 10 years," said Rick Smead, director at Navigant Consulting in Houston.
For more than a decade, natural gas has been the fuel of choice to heat new homes and businesses and to generate power, but all that new demand helped drive prices up sharply in recent years, at times topping $10 per million Btu (Dh36.7) versus a $2 average in the 1990s.
But high prices made shale gas much more attractive to produce, and expanded estimates of shale reserves promise to make significant additions to supply for decades to come.
"The boom in shale drilling has not only increased production sharply, it has increased estimates of the resource base," said Stephen Smith of Stephen Smith Energy Associates.
A recent Navigant study for the American Clean Skies Foundation, a think tank that advocates the use of gas, said current shale output of some 6 billion cubic feet per day, or 10 per cent of total domestic production, could grow to 27 bcf daily, or 40 per cent of the total, by the mid-2020s.
While other unconventional supplies like tight sands and coalbed methane have also grown, the biggest percentage gains have come from shale, primarily from the Barnett formation in Texas, which currently produces about 3.6 billion cubic feet per day and contributes about 6 per cent to total US output.
Barnett has also served as a testing ground for producers who have learned new horizontal drilling and hydraulic fracturing techniques to get the trapped gas out of the ground.
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