NCPA - National Center for Policy Analysis

Drillers Unleash 'Super-Size' Natural Gas Output

September 4, 2015

In spite of current low prices, the enormous amounts of natural gas contained in the U.S. subsoil make it very profitable to extract if modern drilling techniques are used.

Some energy companies taking advantage of these advances are extracting gas from the Haynesville Shale, which spans Louisiana and Texas. The gains come from extending horizontal drilling by thousands of feet.

Experts claim that if this trend continues, the era of low American gas prices could extend for decades into the future. The cost of natural gas is important because it increasingly powers the U.S. economy and its demand has risen at a 2.4% annual growth rate during the last decade.

The Haynesville field, which produces 8% of the nation's natural gas, is the second largest in the United States after the Marcellus Shale. Moreover, it has the benefit of being located near several major pipelines and industrial facilities, thus, an increase in production would have a large impact on gas prices across the entire country.

Production of natural gas has gained relevance because:

  • Domestic natural gas is abundant and inexpensive, mainly due to the newer drilling and extraction techniques.
  • Gas now is used to generate about 30% of U.S. electricity and heat nearly half of all American homes.
  • Its cost is critical to the current administration's aim to reduce carbon emissions in electricity generation.

Furthermore, the costs of extracting gas using hydraulic fracturing have fallen recently. Experts agree that inexpensive gas will have a profound impact on energy generation and the overall U.S. economy.

Source: Russell Gold, "Drillers Unleash 'Super-Size' Natural Gas Output," Wall Street Journal, September 1, 2015.

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