The Oil Drum

Navigant Consulting Inc (NCI) recently prepared a report called North American Natural Gas Supply Assessment on behalf of a natural gas organization called the American Clean Skies Foundation. In this report, NCI estimates the amounts shale gas and tight gas production can be increased in the next decade. These estimates suggest that US natural gas production can be ramped up by nearly 50% by 2020. How reasonable are these estimates? What obstacles are there to such a big ramp up?

Figure 1. Approximate future US natural gas production, based on Navigant Consulting estimates of shale gas and tight gas production.

I recently visited BP America's tight gas facility in Wamsutter, Wyoming on a trip paid for by the American Petroleum Institute. I was the only representative of internet media on the trip. The other reporters on the trip were from AP-Cheyenne, Casper Star-Tribune, and Natural Gas Weekly. On the trip, we spent a day and a half listening to presentations and touring facilities. We also stayed overnight at the facility BP built for visiting workers.

Figure 1 - Two natural gas wells plus solar panel - Click for larger picture

In this post, I will tell a little about what I learned. I will also look at prospects for the future -- both in terms of being able to expand operations and threats to maintaining current production levels.

US natural gas production has been flat for a number of years. We keep hearing that US production is expected to begin declining sometime in the next few years, but it doesn't seem to happen. While it is not obvious from most published data, the reason production remains level is because unconventional gas production has been rising at the same time that conventional production has been declining. In this post, I will look at unconventional natural gas, since it plays such a pivotal role.

Figure 1

Here we go again, this story is about natural gas supplies in North America and the US in particular. Lately, TOD has had some posts on Liquified Natural Gas (LNG) imports as the way to solve the North American natural gas crisis (here, here and here). The point of these posts concerning LNG is that there are real unavoidable concerns that LNG imports will not provide us with sufficient supply to meet inelastic demand soon enough by 2010 or even come anywhere close to meeting these supply problems in the period beyond the end of this decade. Beyond oil and the apparent world-wide peak in light sweet crude, the more I think about our energy problems, the more I come to the conclusion that natural gas shortages in North America are imminent in the timeframe beginning now and for the forseeable future (perhaps 5 to 10 years out or beyond). The damage this could do to the US economy is enormous. In my view, there is a real crisis pending so this post examines another whole part of the equation in future projections for providing natural gas to meet projected demand involving drilling for Unconventional Natural Gas Resources (pdf)-- an overview of what these resources are. The importance of unconventional gas (pdf) is expected to grow out to 2025.

I hope you'll bear with me here. This is one of those really long posts I do from time to time to try to understand an important issue I didn't know much about. I even try here and there to emulate HO's "techie talk" tradition here on TOD though with, I'm sure, limited success.