Shale tech. boom spurs revolution in gas

A study published Wednesday by the research firm IHS CERA said these “unconventional” techniques, ignored by the industry five years ago, have more than doubled North America's discovered gas resources, to 85 trillion cubic feet.

“It's the biggest energy innovation since 2000,” said Daniel Yergin, chairman of IHS CERA, at the firm's CERAWEEK energy conference in Houston.

“We saw natural gas moving from what has been a sense of constraint to a sense of abundance,” he said.

“The abundance is there — it changes the character of energy competition, it changes the debate of how to manage carbon.”

The technology to extract natural gas from shale has improved dramatically in recent years, leading companies into regions where resources were thought to be spent, such as New York state.

The methods use hydraulic fracturing to break up deep underground rock, jetting high-pressure liquid containing chemical products deep into the ground, releasing the gas and bringing it to the surface.

The fracturing is done horizontally to follow the contours of the rock bed.

Although in 2000 gas shale technology only represented 1.0 percent of U.S. natural gas production, today it accounts for 20 percent and could surpass 50 percent by 2030, the IHS CERA report said.

On a global scale, the shale gas boom on the U.S. market has had a major impact: the U.S. eclipsed Russia as the world's number-one producer of natural gas.

With an excess of production in the U.S., the global supply of liquefied natural gas (LNG) has been redirected toward Europe, competing with Russia's supply. That development may be welcomed by certain European countries that want to be less dependent on Russia after Moscow's repeated delivery conflicts with Ukraine.

Jean-Francois Cirelli, vice president of French group GDF Suez, which provides LNG to the United States, said Wednesday in Houston that he sees “no interest in building new LNG terminals” in North America.

According to data cited by Philippe Boisseau, head of gas activities and energy at French giant Total, another LNG provider, “unconventional” gas could represent 5.0 to 7.0 percent of global production in 2030.

“That means it's major, it's a subject that is sparking a lot of interest,” he said.

“That is going to be welcome if there's difficulty in producing enough LNG to meet demand, but that doesn't change our long-term view on the balance between supply and demand, which we think remains tight.”

Total teamed up with a U.S. firm, Chesapeake Energy Corporation, early this year in a shale gas business. It has also bought 25 percent of its partner's portfolio in Barnett Shales in Texas, for US$800 million.

In another major move in the sector, U.S. titan ExxonMobil spent late last year a whopping US$41 billion to buy XTO Energy, a specialist in “unconventional” technologies.

“The unconventional natural gas revolution has lowered the natural gas price outlook and made gas more competitive while encouraging higher expectations for security of supply — a dramatic shift from just half a decade ago,” IHS CERA said.

The firm estimated that the abundant U.S. natural gas supply would support consumption and could double power generation by 2035.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email