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57 comments on More on Natural Gas

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TI on November 21, 2005 - 10:55am Permalink | Subthread | Comments top
I put here some data on the Russian natural gas production. It is dropping , too:

"Production of natural gas from January to September inclusive was 0.1 percent down on the same period last year, at 465 billion cubic meters. In September 2005, natural gas production dropped 5.2 percent compared with September 2004, and it dropped 2.8 percent from the previous month.

According to Russia's energy ministry, 468.928 billion cubic meters of natural gas were produced in Russia in the first nine months of this year, 0.66 percent more than in the same period of last year."
(http://top.rbc.ru/english/index.shtml?/news/english/2005/11/10/10165934_bod.shtml)

So not much LNG from Russia in the future, neither for Europe to compensate for the loss of North Sea production.

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Stuart Staniford on November 21, 2005 - 6:02pm Permalink | Subthread | Parent | Comments top
Russia has very large undeveloped reserves of natural gas in the northern part of the West Siberia basin.  So drops in Russian gas production are likely to have more to do with the political/economic environment in Russia than geology per se (although from the Western consumer perspective, since both are similarly beyond our control, the difference may not much matter).
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TI on November 22, 2005 - 4:40am Permalink | Subthread | Parent | Comments top
Why everybody sees the Russian production problems only as political or economic? They have depletion, too. The always optimistic EIA estimates only a 4.5% growth for the natural gas production 2005 - 2010, i.e. less than 1 % a year. This means that the projected Russian production increase is not enough to compensate for likely depletion of the North Sea gas. The latest news confirm this. Russia has unxplored gas fields, so does the US. It is the depletion/exploration relation that matters.

This has direct bearing to the US gas situation because part of the LNG should come from Russia. Where do we have free new gas capacity to provide for the LNG? In the Middle East, mostly. The more likely scenario is the gas-using industry to move out from the US - as it is right now. This might have far deeper economic consequences than oil prices.  

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Stuart Staniford on November 22, 2005 - 5:02am Permalink | Subthread | Parent | Comments top
There's no comparison between Russia and the US.  Russia has literally tens of super-giant untouched NG fields.  In the US, we're drilling and fraccing every piece of rock with the faintest smell of methane, and we have a reserves/production ratio of less than a decade.  Russia has proved reserves of 1694 Tcf (as of the end of 2004), which is an R/P of 81 years, while the US has proved reserves of 187 Tcf.
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Essex Land Rover Man on November 22, 2005 - 6:11am Permalink | Subthread | Parent | Comments top
Matt Simmons has said that a lot of untapped natural gas reserves (which tend to be stranded) around the world, including Russia, are unproven. He has said that many fields have not been properly surveyed so the field reserves are estimates in the widest sense of the word. He thinks that the Russian fields in the north of the country will be about a $50 to $ 60 billion project to bring to the market.

This is my gut feeling on the figures given how inaccurate numbers are bandied about as proven fact. Has Russia got large amounts of natural gas? Yes. Is it is large as reported (1694 Tcf)? Probably not. Will all of that total reported reserves of gas, be drilled and supplied to the markets in the East and West? No. That is not to say that Russia has large amounts of natural gas, but will it be feasible to extract the gas and bring it to market?

I have also noticed (probably along with most TOD readers) that USA has had about 9 to 10 years reserves of natural gas for the past several years and it looks like it will have 9 to 10 years reserves in a few years time as well.

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wkwillis on November 22, 2005 - 6:56am Permalink | Subthread | Parent | Comments top
Well, if the cost of natural gas gets high enough, demand will drop and the gas fields that have ten years worth of reserves will suddenly have twenty years worth of reserves.
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57 comments on More on Natural Gas

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