New Govt. Data Underscores America’s Enormous Oil, Natural Gas Resources

Fmr. NH senator: “Extracting natural gas from shale is safe, economically sensible”

Late last week, the U.S. Energy Information Administration’s (EIA) – an independent arm of the Energy Department which “collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment”, according to its website — released a 105-page report on America’s oil and natural gas resources found in shale formations entitled “Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays.”

While some in the media (NOTE: EIA deals in straightforward facts) and elsewhere continue to question the economical and environmental viability of oil and natural gas production from shale formations across the country, EIA’s report independently underscores the significant and growing amount of homegrown resources we have in the United States.

Here’s a key excerpt from EIA’s release:

Although the U.S. Energy Information Administration’s (EIA) National Energy Modeling System (NEMS) and energy projections began representing shale gas resource development and production in the mid-1990s, only in the past 5 years has shale gas been recognized as a “game changer” for the U.S. natural gas market. The proliferation of activity into new shale plays has increased dry shale gas production in the United States from 1.0 trillion cubic feet in 2006 to 4.8 trillion cubic feet, or 23 percent of total U.S. dry natural gas production, in 2010. Wet shale gas reserves increased to about 60.64 trillion cubic feet by year-end 2009, when they comprised about 21 percent of overall U.S. natural gas reserves, now at the highest level since 1971. Oil production from shale plays, notably the Bakken Shale in North Dakota and Montana, has also grown rapidly in recent years.

Importantly, EIA also notes that “Technical advancements could lead to more productive and less costly well drilling and completion.” These technical advancements include hydraulic fracturing, a tightly regulated 60-year-old technology that’s been used to enhance the production of oil and natural gas in the United States since the Truman administration.

While many questions exist about hydrofracturing, shouldn’t the public and the media rely on subject matter experts? Well one expert, former New Hampshire senator John E. Sununu – who earned an undergraduate and master’s degree in mechanical engineering from the Massachusetts Institute of Technology – writes this about the environmentally proven technology in today’s Boston Globe.

This from his column, entitled “Smart fracking: Extracting natural gas from shale is safe and economically sensible”:

Fracking uses high-pressure fluid to crack open shale rock formations thousands of feet below the surface. The resulting fractures allow gas and oil to flow more freely and be recovered economically. In their effort to stop the practice, environmental groups raised the specter of drinking-water contamination, excessive water use, and other supposed risks. The hyperbole about this method comes somewhat unexpected, given that the process has been around for over 50 years.

Almost three decades ago, I spent the summer in a hydraulic fracture lab in a musty basement a stone’s throw from the Charles River. As a rookie, I mostly cast cement blocks used to simulate the shale formations. Researchers injected fluid into the blocks at high pressure and measured the speed at which cracks would grow. Over months of trial and error, we learned to predict and even control the direction of the cracks by putting pressure on the outside of the cement blocks.

For a few weeks each year, the professor supervising the lab would head out to the field to conduct larger-scale tests on working wells. Back then, high operating costs coupled with low oil prices meant that fracking was limited to specific, high-yield areas. About five years ago, however, improvements in horizontal drilling finally came together with better simulation and monitoring of crack growth to make the entire process a big economic winner.

The results have been dramatic for production of both oil and gas. During the past three years, proven reserves of shale gas have more than tripled. Estimates of recoverable reserves in the United States have soared to over 800 trillion cubic feet – roughly 35 times America’s annual consumption – from shale gas alone. North Dakota’s Bakken oil field, a marginal producer five years ago, now pumps 400,000 barrels per day. And yet the full potential of reserves such as the Marcellus shale beneath Pennsylvania and New York still haven’t been fully measured.

The industry will continue to innovate, improve productivity, and reduce production costs. Consumers will benefit, the economy will grow, and America will use more natural gas. And that, in the end, will drive the environmental lobby crazy.

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