Category — Venezuela
Editor’s note: This article is the first of two posts on shale gas production and concerns the U.S. situation. The second will look at the potential impacts of shale gas production in Europe and China. While some have interpreted shale gas in terms of coal displacement in power generation, this new competition has profound (negative) implications for the viability of politically favored renewables in power generation.
Shale gas formations have been known for many years. But only in the 1990s did an understanding of hydraulic fracturing technology make production of gas from such formations feasible technically. And it was not until the middle of this decade, with U.S. domestic gas prices consistently above $10/mmbtu, that shale moved from an interesting future resource to a major current reserve.
The U.S. Department of Energy now estimates that recoverable shale gas resources in the U.S. total more than 550 tcf, with conversion of resources to reserves occurring at a rate of more than 1 tcf/year, above production. The production of shale gas and the increasingly economic production processes have reversed the historic decline of U.S. gas reserves, which stood at 293 tcf in 1968 and fell to 164 tcf in 1998. Dry gas reserve estimates for the U.S. as of December 31, 2007, stood at 237 tcf. Production has moved in a similar fashion (with a small lag), peaking in 1973 at 21.7 tcf, then falling to a plateau of about 17–19 tcf throughout the next three decades, until shale changed the domestic U.S. gas supply picture.
What Has the Shale Bonanza Meant for the U.S.?
Large-scale commercial production of natural gas from shales commenced only in the middle of this decade, becoming significant as a proportion of supply only in the last couple of years. In 2005, U.S. gas production stood at just over 18 tcf. In 2008, domestic production had risen to 20.6 tcf, reversing more than a decade of decline, and closing in on the 1973 peak production figure.
October 14, 2009 13 Comments