18 April 2012 03:16 [Source: ICIS news]
NEW ORLEANS, Louisiana (ICIS)--The upstream oil industry is driven by advancements in technology, which has a ripple effect through production, infrastructure and energy prices for end-users, a company official from Southwestern Energy said late on Tuesday.
“This is a technology driven event that is occurring and as a result of that we are discovering new opportunities,” said Southwestern Energy’s vice president of governmental and regulatory strategies James Tramuto at the Gas Processors Association annual meeting in New Orleans.
“What I mean by ‘This is a technology driven event’ is that we will continue to find new production and continue to increase production – not just gas production but also oil production,” Tramuto said.
The US has an abundance of energy that producers have not been able to tap, he added.
“This change is a paradigm shift,” he said.
The US in 2001 had a 60-year supply of natural gas at most and that supply was falling, said Tramuto.
He said the industry thought the US would be importing gas.
“And now today, under any scenario, we have a 100-year supply of natural gas,” he said.
The number of shale and unconventional gas basins, which is nearing 20, provides “flexibility and reliability” for maintaining natural gas supplies and that is the key for driving the utility and industrial markets, he said.
Improvements continue to be made on the production side, according to Tramuto.
The time required to drill a well has dropped to eight days from 17 days since 2007, said Tramuto.
He said reserves of natural gas in the US have also increased by nearly nine fold during that time period.
Shale gas production has grown by four times between 2006 and 2010, Tramuto said. This caused the prices of natural gas to decline, he added.
Natural gas prices were at $1.95/MMBtu (€1.48/MMBtu) on 17 April, according to ICIS data.
“Technology makes it all work,” he said. “The improvements we’ve seen on how we drill, how quickly we drill, how safely and responsibly we drill – it’s incredible.”
Investments in infrastructure have also taken off in tandem with investments in production, Tramuto said.
Over 16,000 miles (25,750 km) of natural gas interstate pipeline has been added in the past decade, he added.
“This is a national treasure,” Tramuto said. “The projects are larger than we’ve seen in 100 years.”
($1 = €0.76)
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