Gas Boom Projected to Grow for Decades
March 1, 2013
The most exhaustive study to date of a key natural-gas field in Texas, combined with related research under way elsewhere, shows that U.S. shale-rock formations will provide a growing source of moderately priced natural gas through 2040, and decline only slowly after that, says the Wall Street Journal.
- The research provides substantial evidence that there are large quantities of gas available that can be drilled profitably at a market price of $4 per million British thermal units, a relatively small increase from the current price of about $3.43.
- The study, funded by the nonpartisan Alfred P. Sloan Foundation and performed by the University of Texas, examined 15,000 wells drilled in the Barnett Shale formation in northern Texas, mostly over the past decade.
- It is among the first to study the geology and economics of shale drilling, a relatively recent development made possible by hydraulic fracturing, or fracking, in which a mixture of water, sand and chemicals is pumped at high pressure into rocks to release gas.
Looking at data from actual wells rather than relying on estimates and extrapolations, the study broadly confirms conclusions by the energy industry and the U.S. government, which in December forecast rising gas production.
The shale-gas boom has led to a reorientation of the U.S. energy economy. This has led to a steep decline in coal consumption for electric generation and prompted companies to announce or consider multibillion-dollar investments to export gas and build chemical, steel and fertilizer plants that will consume enormous quantities of gas.
If these investments go forward, but gas production were to slip, higher prices for the fuel -- which now accounts for 30 percent of electricity production and heats half of U.S. homes -- are likely.
- The study concludes that 44 trillion cubic feet of natural gas will be recovered from the Barnett -- more than three times what has been produced so far and about two years' worth of U.S. consumption at current rates.
- The university also is examining shale formations in Pennsylvania, Louisiana and Arkansas, work that has led investigators to conclude that U.S. natural gas production won't plateau until 2040.
Source: Russell Gold, "Gas Boom Projected to Grow for Decades," Wall Street Journal, February 27, 2013.
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