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236 comments on DrumBeat: June 16, 2006

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ericy on June 16, 2006 - 9:58am Permalink | Subthread | Comments top
According to the Washington Post, we have a glut of natural gas:

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/15/AR2006061502062.html

The whole world is talking about energy shortages, but for the moment, the U.S. natural gas business is looking at a potential glut.

Thanks in part to a warm winter, inventories of natural gas have built up to levels far greater than normal for this time of year. And terminals built to handle imports of liquefied natural gas from other countries are operating at about half of their capacity.

Sadly the article doesn't talk about anything beyond a year out.  

I have Johnathan Darley's book "High Noon for Natural Gas" sitting in my pile of books to be read..

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IFeelFree on June 16, 2006 - 11:15am Permalink | Subthread | Parent | Comments top
The average decline rate of natural gas wells in the U.S. is 30%. The only reason we have a glut of natural gas is that we've been drilling new wells at a ferocious rate - the number of natural gas wells has doubled in the past year. Obviously, this trend cannot continue indefinitely.
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oil on June 16, 2006 - 12:28pm Permalink | Subthread | Parent | Comments top
Question:

I read on a financial website that the department of the interior claims there is enough natural gas located offshore to heat every home in America for 80 years.

All that's needed is an approval from the Government to drill and the natural gas crisis is over for the next 100 years or so.  

Is this pure hyperbole and/or guesswork, or is there actual science behind this claim?  

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Dave Cohen on June 16, 2006 - 1:28pm Permalink | Subthread | Parent | Comments top
Often, this claim concerns what is called "deep gas" offshore in the Gulf. For example, from here.
Trapped more than 15,000 feet within the earth's crust, so-called "deep natural gas" represents a tremendous untapped domestic energy resource. Government studies estimate that there could be more than 20 trillion cubic feet of untapped deep natural gas deposits in the Gulf of Mexico-- about as much as is currently being produced from all areas in North America on an annual basis!

... Unfortunately, despite significant advances in deep gas technology, these prospects remain very challenging to find and develop successfully. Since 2001, Gulf natural gas production has decreased from 5,128 BCF to 4,175 BCF in 2003. Deep gas discoveries may help reverse this trend however: deep gas production increased from a relatively low 284 billion cubic feet in 2000 to 421 billion cubic feet in 2002.19

At this time and for the foreseeable future, most of this gas, if it is indeed there, is still effectively "stranded" despite what articles like Oil companies going deep in Gulf of Mexico drilling say. I would pay more attention to facts like this one, from the lastest ASPO-USA newsletter
Canadian gas production peaked at 17.4 billion cubic feet a day in 2001 and 2002, according to figures from the Canadian Association of Petroleum Producers. Large new discoveries of natural gas have become rare.
Other claims involve the western part of the Gulf nearer to Florida (dry holes and "sour" gas H2S) and completely unsubstantiated assertions about offshore California and the East Coast.

In other words, don't believe everything you read.

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mcain6925 on June 16, 2006 - 11:33am Permalink | Subthread | Parent | Comments top
I was underwhelmed by Darley's book. I thought it was pretty much a repeat of Heinberg's The Party's Over only starting from gas rather than oil and not as well done. I didn't think he added anything to my understanding of the reasons for the impending problems in natural gas supply. YMMV.
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Francois on June 16, 2006 - 3:30pm Permalink | Subthread | Parent | Comments top
What they fail to mention is that they now count the base gas (i.e. the gas that HAS TO REMAIN BEHIN in the caverns to provide structural pressure and integrity) in Louisiana as part of the reserve. They did not used to do that - they used to count only the gas that they could actually use.

This is a 44% difference!!!

Go figure.

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Don in Colorado on June 17, 2006 - 4:03am Permalink | Subthread | Parent | Comments top
You haven't really picked up on the faith-based theory of markets, yet, have you, Francois?

[grin]

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236 comments on DrumBeat: June 16, 2006

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