10 April 2013 16:08 [Source: ICIS news]
By Joe Kamalick
WASHINGTON (ICIS)--The results of the latest and most respected assessment of US natural gas resources suggest that the nation and its many industries are poised for an epochal century of dependable and affordable energy and feedstock.
In its latest biennial report, the Potential Gas Committee (PGC) at the Colorado School of Mines said its analysis of ever-expanding US domestic natgas resources “demonstrates an exceptionally strong and optimistic gas supply picture for the nation”.
According to the PGC, the amount of recoverable natural gas in the US has reached yet another record high, with the supply now measured at 2,384trn cubic feet (tcf), enough to meet all domestic US gas needs for 98 years at current consumption rates.
The PGC said that its assessment of the nation’s gas potential “is the highest resource evaluation in the PGC’s 48-year history – exceeding by 486 tcf the previous record-high assessment from year-end 2010”.
The report, formally titled the “Potential Supply of Natural Gas in the United States”, is produced in cooperation with the American Gas Association (AGA), the trade group representing utilities that provide natural gas for industrial, commercial and residential uses and, increasingly, electric power generation.
US petrochemicals producers along with downstream chemical manufacturers are heavily dependent on natural gas as both a feedstock and energy fuel. A broad range of other US manufacturing industries also relies on natural gas.
That 486 tcf expansion in the committee’s assessment of natgas resources since the April 2011 report marks a 25% increase in the amount of available gas.
The US Department of Energy (DOE) says that the US consumed nearly 24.4 tcf of natural gas in 2011. At that pace, the assessed supply of 2,384 tcf would last 98 years.
The earlier 2011 committee assessment said the supply would meet US demand consumption for about 90 years.
Indeed, the new forecast for a 98-year supply of natural gas likely will be eclipsed and lengthened by successive biennial estimates, at least for the near future.
For while US consumption of natural gas grew by 5.6% from 2010 to 2012, according to DOE, the PGC’s assessment of the nation’s gas resources jumped by 25% over that two-year period.
AGA president Dave McCurdy said the new committee report “confirms that we can continue to rely on abundant, clean natural gas for our future energy needs [and] we can look forward to decades of market stability”.
As in its earlier 2011 potential gas supply report, the PGC said the large expansion of recoverable natgas resources could be attributed largely to continuing advances in the use of hydraulic fracturing (fracking) and horizontal drilling to develop previously unrecoverable gas reserves in dense shale rock deposits.
Citing those technical advances, McCurdy said that “For the next decade and beyond, domestic natural gas supplies are expected to be high enough to support an increase in demand across all sectors – unlocking the door for expansion in residential, business, transportation and commercial and industrial applications”.
Even as domestic demand for natural gas is expected to expand, the PGC says that exploration and development likewise can be expected to keep pace.
The committee said that it sees “industry increasing domestic production, processing capacity and storage levels to satisfy demand”.
Indeed, the gas exploration and production (E&P) industry, said the committee, will be “aggressively pursuing new domestic markets and expanding existing markets, particularly natural gas for power generation”.
And while some gas fields inevitably will be played out over the years, the PGC sees “producers offsetting production depletion by consistently proving up higher volumes of reserves through new field discoveries, field extensions and new pool discoveries in known fields”.
In light of that, the committee said that it expects to see “overall increasing volumes of potentially recoverable resources by ongoing rigorous evaluation of established, emerging and prospective gas plays”.
In addition to the boon to US petrochemical producers, downstream chemical makers and a broad range of other manufacturers, the PGC said that “because of our present domestic supply outlook, the US seems poised to experience a profound shift in its import-export dynamic”.
The committee analysis notes that, despite the nation’s new natgas abundance, the US likely will never be entirely free from importing some quantities of natural gas, simply “because of the physical constraints in delivering domestic gas by pipeline to all areas of the country that currently consume it or that could well benefit from it by converting from other fuels”.
Despite those anticipated continuing convenience imports, the US is likely to become a net gas exporter.
“The US gas industry is on the verge of investing an enormous amount of capital to build new LNG manufacturing facilities that will allow us to export a portion of our bountiful gas resource to overseas markets that are becoming increasingly dependent on imported natural gas for their own domestic energy needs,” the report said.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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