Shale gas to play increasing role in US energy supply

16 December 2010 22:13  [Source: ICIS news]

WASHINGTON (ICIS)--Shale gas resources will make up an increasingly larger share of domestic US energy supplies through 2025, the Department of Energy (DOE) said on Thursday, with recoverable shale gas reserves more than doubling in the past year.

In issuing its annual long-term energy outlook report, the department’s Energy Information Administration (EIA) said that increasing shale gas resources would help lower US reliance on energy imports.

“Our reference case projection shows the growing importance of natural gas from domestic shale gas resources in meeting US energy demand and lowering natural gas prices,” said EIA administrator Richard Newell.

US petrochemical producers and downstream chemical makers are heavily dependent on natural gas as both a feedstock and power fuel, so the availability of reasonably priced domestic natural gas is critical to the industry’s ability to compete in global chemical markets.

Newell said that the technically recoverable shale gas resources in the US were 827,000bn cubic feet (bcf) as of 1 January 2009, more than 474,000 bcf larger than the year-earlier estimate.

He said that more drilling in existing and new shale plays accounted for the significantly increased shale gas resources estimate.

“This larger resource leads to about double the shale gas production and more than 20% higher gas production in the lower 48 in 2035, with lower natgas prices than was projected in the 2010 Reference case,” the administration said.

In part because of increased domestic shale gas production, along with increasing renewable energy capacity, Newell said that the net import share of total US energy consumption in 2035 would fall to 18%, compared with 24% in 2009.

The administration’s long-term energy outlook also said that non-hydro renewable energy sources - solar, wind and geothermal - and natural gas would be the fastest growing fuels used for generating electricity through 2035.

However, coal would remain the dominant electric power fuel because of the large amount of existing and planned capacity for coal-fired power stations.

US natural gas consumption is forecast to increase by 16%, to 26,500 bcf in 2035 from 22,700 bcf annually in 2009, the administration said.

That 2035 total gas consumption is about 1,600 bcf higher than the department estimated a year ago.

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