Tuesday, June 17, 2008

Peak gas? Not yet in the Lower 48

Just last year, U.S. natural gas production appeared to be maxed out. For nine years, production levels had been stagnant. The only variation in that flat line was the occasional divot caused by a hurricane shutting down producers around the Gulf of Mexico. Decline rates on conventional natural gas wells were actually getting worse, and there was a certain glum agreement that U.S natural gas production would soon mimic the decline of U.S. oil production, irreversibly sliding down the depressing side of Hubbert’s bell curve.

But advanced drilling techniques – specifically horizontal drilling and hydraulic fracturing – have allowed formerly inaccessible deposits of unconventional gas to be exploited. Coalbed methane production (natural gas found in coal seams) is on the rise, and now shale gas production has seen a big uptick.

Unconventional gas now accounts for more than half of natural gas production in the Lower 48.

The most famous unconventional gas basin is the Barnett Shale in Texas, which now produces over three billion cubic feet per day, a big contributor to the surge in Texan gas production, which in turn has increased domestic production noticeably for the first time in ten years.
(courtesy of Casey's Charts).

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