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North America: The New Energy Kingdom

By Al Fin | Mon, 13 December 2010 15:15 | 8

With rising production from shale fields, the U.S. surpassed Russia last year to become the world’s largest supplier of natural gas. Shale now accounts for 10 per cent of the country’s natural gas production – up from 2 per cent in 1990. Chesapeake’s production from its next Texas project, expected by the end of 2012, will by itself supply the energy equivalent of 500,000 barrels of oil a day. _Globe&Mail

We know that Canada is overflowing with hydrocarbons from shale oil to oil sands to coal to natural gas to methane hydrates.... But the US was supposed to be "all tapped out" ever since oil production peaked back around 1970. Is it possible that all of the peak oil and peak energy doomers who foretold the end of US oil & gas may have been a bit premature?
U.S. domestic production for the year will be 140,000 barrels a day higher than last year (which was 410,000 barrels a day higher than 2008). Although the U.S. Energy Information Administration (EIA) says U.S. production will decline next year, who knows?

...As an article last month in The New York Times observed: “Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation.” Further still: “Another wave of natural gas drilling has taken off in shale rock fields across the United States, and more shale gas drilling is just beginning in Europe and Asia.”

...For natural gas, the U.S. has the four largest fields in the world: the Haynesville field in Louisiana (with production up by 77 per cent in 2009); the Fayetteville field in Arkansas and the Marcellus field in Pennsylvania (both with production up by 50 per cent); and the Barnett field in Texas and Oklahoma (with production up by double-digit increases). The EIA reports that proven U.S. reserves of natural gas increased last year by 11 per cent to 284 trillion cubic feet – the highest level since 1971.

Beyond shale oil and shale gas, there’s the awesome energy promise of methane hydrates, frozen crystals of water and gas that lie beneath the northern permafrost and beneath oceans floors around the world in quantities that boggle the imagination.

“Assuming 1 per cent recovery,” the U.S. Geological Survey says, “these deposits [in U.S. territory] could meet the natural gas needs of the country (at current rates of consumption) for 100 years.” _Globe&Mail

Gas producers are scurrying to find ways to export gas to cold, hungry customers in Asia and Europe. LNG -- liquified natural gas -- is one approach which is being developed for the export market. GTL -- gas to liquids -- is another approach that is likely to be developed inside the US within the next 10 years. Both approaches will allow for easier entry into the lucrative export markets. The GTL approach will also -- if economical -- allow gas to be converted into liquid fuels at a profit. That should help reduce North American dependency on overseas oil, once developed.

By. Al Fin

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  • Anonymous on December 13 2010 said:
    At one percent recovery, there is enough conventional and unconventional gas in the US to meet US needs for the next 100 years, or so says the U.S. Geological Survey. I wonder who is dumb enough to believe that. I heard that sort of thing 20 years ago, and it sounded as nutty then as it does now.
  • Anonymous on December 14 2010 said:
    I have more Barnett wells than fingers and toes to count them on the problem here is they play out in about 2 years a few of them in less time.After 2 years they just hardly produce at all. Unless you refrak them which is very expensive.So I would doubt USGS reserves comments. But it's great for now.Red
  • Anonymous on December 14 2010 said:
    RedI have heard what you say all over the place, and I believe that the natural depreciation of shale gas is very high.But on the average, in 2 years or less...ARE YOU SURE OF THAT?
  • Anonymous on December 14 2010 said:
    I find Al Fin just somewhere in between naive, gullible and disingenuous, though also fun to read with a giant pinch of salt. I'm just glad we have the likes of Fred Banks among others to bring us all down to earth again...And thanks redgypsy for clarifying the 'duration' aspect of the issue.
  • Anonymous on December 15 2010 said:
    It's not often that Fred Banks is surprised by info on this site. So redgypsy, I'd also be interested to know if that 2 year figure can be verified...Thanks
  • Anonymous on January 07 2011 said:
    It is because these wells load up with watter that they slow down, the gas is still there it just has to be helped along. I work in the Haynesville Shale in N LA and am from Ft Worth and have worked in the Barnett Shale. I have also worked the Cotton Valley Shale in N LA & East TX aswell as the Fayetteville in Central Arkansas. Every formation, and well at that, are completely different and act differently. Barnett wells are consistent but sometimes need gas lift compressors or artificial plunger lifts to remove the water that stacks up in the tubing not allowing gas to pass. You will see swabbing rigs or these compressors on locations where this is happening. Another common method is to pump foamer chemical, soap, downhole to make the water bubble allowing the gas to lift up. This is what I do, sell the pumps that do that, and have seen wells that were 50 yrs old start producing because of this method.
  • Anonymous on January 07 2011 said:
    Most people see the big returns at first, the Haynesville wells do an average of 20 mmcf/day (million cubic feet a day) at first but drop to around 6 mmcf/day, so they expect that forever. That's not how it works that's what keeps guys like me in business. The largest expense for a well after drilling and fracing it is chemical. Pumped 24/7/365 to help with a variety of issues to make that well produce to it's max potential. Another reason these wells may seem like they've slowed down is because many companies, like in the Barnett, will choke the wells back to produce less but suffice the lease agreement because of market price. When the Barnett was booming gas was around $16 / mcf, now it hovers around $4. This is an enormous difference and causes the Gas Companies to budget back.
  • Anonymous on January 07 2011 said:
    Gas is expected to jump back to $6+ in 2012 and then we all better hold on because every existing well will be unleashed and new ones will be drilled. Also in the Barnett they've found valuable liquids in the gas around Montague County and it has ignited renewed interest in geological researching throught the Barnett. With oil prices around $80 -$90 a barrell and these liquids selling for a premium companies are flocking to the opportunity. S TX's Eagleford Shale is a prime example with thousands of wells planned to be produced in the next few years.

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