Shale gas can meet US needs for 100 years - study

30 July 2008 20:55  [Source: ICIS news]

Study says US has more natgas than thoughtWASHINGTON (ICIS news)--Rapidly expanding development of domestic US shale gas reserves can meet all of the country’s natural gas demand growth for the next 100 years and can supplement oil and coal use, a gas industry official along with a new study said on Wednesday.

 

Aubrey McClendon, chief executive of major independent natgas producer Chesapeake Energy Corp, said the US is “entering an age of new gas abundance and we will have enough natural gas to meet all areas of new demand”.

 

“This is a game-changer, a paradigm shift,” McClendon said. “Shale gas makes the US the Saudi Arabia of natural gas.”

 

Meanwhile, the study just issued by Navigant Consulting and commissioned by the American Clean Skies Foundation, a non-profit advocacy group founded by its chairman McClendon, predicted that annual production from the seven largest US shale basins could exceed 10,950bn cubic feet (bcf) and even reach 14,235 bcf within 10 years.

 

Combined with conventional US onshore and offshore gas production, the Navigant study said recoverable domestic natgas reserves were sufficient for expanding national demand for at least 100 years.

 

McClendon said the now developing Haynesville shale deposit that reaches from east Texas, through Louisiana and into Arkansas “may hold up to eleven or twelve times current US annual natural gas consumption of around 22,000bn bcf”.

 

That would represent recoverable gas reserves of about 264,000 bcf.

 

Natural gas is a major feedstock and energy resource for US chemical producers. Chemical companies and a broad array of other US gas-dependent manufacturing sectors have seen gas prices rise five-fold from the long-time range of $2/m British thermal unit (Btu) in the 1990s to $12/m within the last year. Prices have since moderated.

 

McClendon said that the Haynesville field was only one of a half dozen major shale gas basins under development, adding there were at least a dozen other shale basins scattered across the US.

 

Shale gas development had become economical in the last three to five years due to technical advances in horizontal drilling and hydraulic sediment fracturing and amid the increasing cost of gas, McClendon said.

   

McClendon urged congressional support for new legislation that would provide tax credits and bonding authority to encourage more production of automobiles powered by natgas and installation of natgas fuel points at US retail gasoline stations.

 

He said that shale gas reserves were sufficient to meet anticipated US demand growth for home heating, industrial, power and transportation needs, even if US policymakers created climate legislation that would cap greenhouse gas emissions and drive coal-fired utilities to cleaner natural gas.

 

McClendon conceded, however, that despite availability of shale gas resources, anticipated US gas demand growth would likely keep gas prices in the range of $9-11/m Btu. The more complex and costly drilling and fracturing techniques required for shale gas development became uneconomical at around $8/m Btu and lower, he said.

 

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By: Joe Kamalick
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