Knight Investments LLC Look at US Energy Information Administration Reports on World Gas Resources
PRLog (Press Release)– Apr 21, 2011– Recent reports from the US Energy Information Administration (US EIA) stated that the use of horizontal drilling )in conjunction with hydraulic fracturing) has greatly expanded the ability of producers to profitably produce natural gas from low permeability geologic formations, particularly shale formations.
Compliance Officials reviewed findings that stated this would add to price fluctuations in natural gas, and reviewed how this might effect the world markets. Officials noted that the application of fracturing techniques is quite old and is proven. As fracturing techniques started to stimulate oil and gas production and began to grow rapidly in the 1950s (although experimentation dates back to the 19th century); however cautioned that expanded use did not necessarily imply prices would go down.
Reports stated that starting in the mid-1970s, a partnership of private operators, the U.S. Department of Energy (DOE) and the Gas Research Institute (GRI) endeavored to develop technologies for the commercial production of natural gas from the relatively shallow Devonian (Huron) shale in the Eastern United States.
This partnership helped foster technologies that eventually became crucial to producing natural gas from shale rock, including horizontal wells, multi-stage fracturing, and slick-water fracturing. Practical application of horizontal drilling to oil production began in the early 1980s, by which time the advent bmw of improved downhole drilling motors and the invention of other necessary supporting equipment, materials, and technologies, parti acura cularly downhole telemetry equipment, had brought some applications within the realm of commercial viability.
As such researchers stated that the expansion of applying these techniques could result in a temporary relief of prices for US Companies.
The development of shale gas plays has become a "game changer" for the U.S. natural gas market. The proliferation of activity into new shale plays has increased shale gas production in the United States from 0.39 trillion cubic feet in 2000 to 4.87 trillion cubic feet in 2010, or 23 percent of U.S. dry gas production. Shale gas reserves have increased to about 60.6 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 1971.3.
Officials cautioned that although this might be beneficial to end purchasers - this factor would have to be taken into consideration for compliance applicants. As such, financials for natural gas contracts would be reviewed with extra eyes.
The growing importance of U.S. shale gas resources is also reflected in EIA's Annual Energy Outlook 2011 (AEO2011) energy projections, with technically recoverable U.S. shale gas resources now estimated at 862 trillion cubic feet. Given a total natural gas resource base of 2,543 trillion cubic feet in the AEO2011 Reference case, shale gas resources constitute 34 percent of the domestic natural gas resource base represented in the AEO2011 projections and 50 percent of lower chevrolet 48 onshore resources. As a result, shale gas is the largest contributor to the projected growth in production, and by 2035 shale gas production audi accounts for 46 percent of U.S. natural gas production.
(SOURCE USGS, World Petroleum Assessment 2000 & U.S. Energy Information Administration, "Drilling Sideways: A Review of Horizontal Well Technology and Its Domestic Application", DOE/EIA-TR-0565 FOR FACTUAL INFORMATION)
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