Authors: Brian Bohm, P.G., ALL Consulting; Teri S. Holmes, M.S., ALL Consulting
Natural gas captured from organic shale formations is not new to the oil and gas industry; shale gas has been produced since the early 1800s (DOE, 2009). Most shale gas formations have historically been deemed economically impractical to drill due to the available technology and relative abundance of domestic conventional natural gas sources. However, recent technological advances in horizontal drilling and hydraulic fracturing along with increasing demand for natural gas and recent price trends for natural gas, have allowed previously inaccessible reserves to become technologically feasible and economically efficient to recover (DOE, 2009).
The Annual Energy Outlook for 2009, recently released by the United States’ Energy Information Administration, projects an increase of 0.5% total primary energy consumption annually through 2030 (EIA, 2009). The majority of this demand increase will come from the residential sector’s demand for additional electricity (EIA, 2009). Currently, coal-fired electricity generation dominates the electricity generation sector at approximately 49% of total U.S. domestic generation capacity (EIA, 2009). However, due to emerging concerns and public policy developments regarding greenhouse gases and renewable portfolio standards for a sustainable energy supply, lower carbon energy sources needed for electricity generation are expected to gain marketplace demand (EIA, 2009). Unfortunately, conversion from a fossil fuel-dependent energy economy to a low-carbon energy economy will take time and significant capital investment for infrastructure development (DOE, 2009). A recent Wall Street Journal article cites Carl Pope, executive director of the Sierra Club as viewing natural gas as a “bridge fuel” from carbon-intensive fossil fuels, such as coal and petroleum, to cleaner future fuel sources (Casselman, 2009).
In order to meet the expected increased demand for natural gas without increasing dependence on foreign imports, development of domestic unconventional natural gas sources will need to grow rapidly. Production from unconventional natural gas sources, namely organic shales, tight sand formations, and coal-bed methane, currently account for approximately 50% of the total domestic natural gas production (DOE, 2009), this total production from unconventional resources was estimated at 8.9 trillion cubic feet (Tcf) per year in 2007 (ALL, 2008c). Of the 8.9 Tcf of unconventional natural gas produced in the United States in 2007, 1.2 Tcf was from shale formations; however, shale gas production is expected to grow to 4.2 Tcf by 2030, accounting for an estimated 18% of the total U.S. gas production in 2030. Unconventional sources combined are predicted to grow to nearly 56% of total U.S. domestic natural gas production (EIA, 2009). To date, four evolving shale gas plays (Haynesville, Marcellus, Fayetteville and Woodford) are estimated to have over 550 Tcf of total recoverable gas resources, these formatiosn are expected to be capable of providing sustainable production of 2-4 Tcf of natural gas annually for decades (DOE, 2009). Of these four, the Haynesville Shale and Marcellus Shale may have the most significant additions to domestic reserves of natural gas in recent decades.
Last updated by Keith Mauck (Site Publisher) Oct 9, 2013.