Natural gas…more important than oil -
Column by Victoria Hall
“Shale gas is the most important energy development since the discovery of oil,” says Fred Julander, founder and chief executive of his own Denver-based gas company, Julander Energy. (1.)
But the word has not yet spread as far as gas advocates would like. Ian Cronshaw, the top gas analyst at the Paris-based International Energy Agency (IEA), highlighted the jump in estimated gas in his most recent energy outlook report, but noted that the news had gotten little notice. “If that had happened in the oil industry, it would be a headline item,” Cronshaw said at a recent meeting in Washington. “But because it happened in gas, nobody seems to be paying any attention.” (1.)
As an energy source, natural gas is cheaper than oil, and when burned it produces only about half the carbon dioxide that comes from burning coal. As long as natural gas reserves in the United States were believed to be nearing depletion, the fuel did not get much attention, but with the upward revision of estimated reserves, that has changed.
“Natural gas is the fuel that can change everything for our nation,” says Robert Hefner, who lays out his case in a new book, The Grand Energy Transition. Hefner argues that a big boost in the use of natural gas would dramatically lower greenhouse gas emissions and reduce the U.S. dependence on foreign oil. Much of the nation’s electrical power now generated by burning coal could instead come from natural gas, and a switch to natural gas-powered automobiles would produce dramatic results. (2.)
“If we were to convert half of our existing vehicle fleet to natural gas, we would eliminate a little over half our oil imports,” Hefner contends. He and other natural gas advocates have been supported in recent months by environmental organizations.
“There’s a huge capacity of natural gas that is lying idle,” says Timothy Wirth, a former Democratic senator from Colorado who now heads the United Nations Foundation and the Better World Fund. “That makes absolutely no sense at all when what we’re trying to do is clean up the atmosphere.” (2.)
COMBUSTION EMISSIONS (POUNDS/BILLION BTU OF ENERGY INPUT (3)
One reason for the proposed widespread use of natural gas is its versatility as a fuel. Its high British thermal unit (Btu) content (explained on page 3 of this article) and a well-developed infrastructure make it easy to use in a number of applications. Another factor that makes natural gas an attractive energy source is its reliability. Eighty-four percent of the natural gas consumed in the U.S. is produced in the U.S., and ninety-seven percent of the gas used in this country is produced in North America. Thus, the supply of natural gas is not dependent on unstable foreign countries and the delivery system is less subject to interruption.
A key advantage of natural gas is that it is efficient and clean burning. In fact, of all the fossil fuels, natural gas is by far the cleanest burning. As stated in an earlier paragraph, natural gas emits approximately half the carbon dioxide (CO2) of coal along with low levels of other air pollutants. The combustion by products of natural gas are mostly CO2 and water vapor, the same compounds people exhale when breathing. Coal and oil are composed of much more complex organic molecules with greater nitrogen and sulfur content. Their combustion byproducts include larger quantities of CO2, nitrogen oxides (NOx), sulfur dioxide (SO2) and particulate ash. By comparison, the combustion of natural gas liberates very small amounts of NOx and SO2, virtually no ash, and lower levels of CO2, carbon monoxide (CO), and other hydrocarbons. Because natural gas emits only half as much CO2 as coal and approximately 30% less than fuel oil, it is generally considered to be central to energy plans focused on the reduction of GHG emissions. (Page5, #3)
Speaking of natural gas being by far the cleanest burning of all the fossil fuels:
According to the Energy Information Administration (EIA) in its report “Emissions of Greenhouse Gases (GHG) in the United States 2006,” 82.3% of GHG emissions in the U.S. in 2006 came from CO2 as a direct result of fossil fuel combustion. Since CO2 makes up a large fraction of U.S. GHG emissions, increasing the role of natural gas in U.S. energy supply relative to other fossil fuels would result in lower GHG emissions.
Although there is rapidly increasing momentum to reduce dependence on fossil fuels in the U.S. and elsewhere, the transition to sustainable renewable energy sources will no doubt require considerable time, effort and investment in order for these sources to become economical enough to supply a significant portion of the nation’s energy consumption. Indeed, the EIA estimates that fossil fuels (oil, gas, and coal) will supply 82.1% of the nation’s energy needs in 2030. Since natural gas is the cleanest burning of the fossil fuels, an environmental benefit could be realized by shifting toward proportionately greater reliance on natural gas until such time as sources of alternative energy are more efficient, economical, and widely available.
Additionally, the march towards sustainable renewable energy sources, such as wind and solar, requires that a supplemental energy source be available when weather conditions and electrical storage capacity prove challenging. Such a backstop energy source must be widely available on near instantaneous demand. The availability of extensive natural gas transmission and distribution pipeline systems makes natural gas uniquely suitable for this role. Thus, natural gas is an integral facet of moving forward with alternative energy options. With the current emphasis on the potential effects of air emissions on global climate change, air quality, and visibility, cleaner fuels like natural gas are an important part of our nation’s energy future. (Page 6, #3)
Natural Gas Basics
Natural gas is a combination of hydrocarbon gases consisting primarily of methane (CH4), and lesser percentages of butane, ethane, propane, and other gases. It is odorless, colorless, and, when ignited, releases a significant amount of energy. Natural gas is found in rock formations (reservoirs) beneath the earth’s surface; in some cases it may be associated with oil deposits.
Exploration and production companies explore for these deposits by using complex technologies to identify prospective drilling locations. Once extracted, the natural gas is processed to eliminate other gases, water, sand, and other impurities. Some hydrocarbon gases, such as butane and propane, are captured and separately marketed. Once it has been processed, the cleaned natural gas is distributed through a system of pipelines across thousands of miles. It is through these pipelines that natural gas is transported to its endpoint for residential, commercial, and industrial use. Natural gas is measured in either volumetric or energy units. As a gas, it is measured by the volume it displaces at standard temperatures and pressures, usually expressed in cubic feet. Gas companies generally measure natural gas in thousands of cubic feet (Mcf), millions of cubic feet (MMcf), or billions of cubic feet (bcf), and estimate resources such as original gas-in-place in trillions of cubic feet (tcf). (This article also uses BTU/SCF which is BTU per Standard Cubic Feet)
TYPICAL COMPOSITION OF NATURAL GAS (3)
Calculating and tracking natural gas by volume is useful, but it can also be measured as a source of energy. Similar to other forms of energy, natural gas can be computed and presented in British thermal units (Btu). One Btu is the quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit at normal pressure. There are about 1,000 Btus in one cubic foot of natural gas delivered to the consumer. Natural gas distribution companies typically measure the gas delivered to a residence in ‘therms’ for billing purposes. A therm is equal to100,000 Btus—approximately 100 cubic feet—of natural gas. (Page 6 of #3)
“Natural gas is the cleanest of the fossil fuels,” agrees Christopher Flavin, president of the Worldwatch Institute, a think tank that does environmental research. “I think nobody’s ever argued that. The big thing, of course, that’s changed is that shale gas has now opened up as this enormous resource.” (2)
Natural gas from shale has become an important part of the running of America. And, the U.S. government thinks it is important enough to publish a nearly 100 page report: “Modern Shale Gas Development in the United States: A Primer, 2009,” (parts of which have been already been quoted above.) It was prepared for the U.S. Department of Energy, Office of Fossil Energy and National Energy Technology Laboratory.
We know that here, in Northwest Louisiana, we sit on top of two shale formations: Haynesville Shale and the newly confirmed Bossier Shale (in the Southern portion of the play). But what do we really know about other natural gas shale formations in the United States? The map below lists all of the known formations.
UNITED STATES SHALE GAS BASINS (3)
Compare the above map which comes from the U.S. Government “Primer” on Shale (3) of natural gas shale formations with the map below where the black represents traditional oil and gas drilling and the red represents the shale formations. That map was published on the National Public Radio’s website (npr.org) in conjunction with NPR’s “Rediscovering Natural Gas By Hitting Rock Bottom” by Tom Gjelten (2)
Natural Gas: Traditional Drilling Areas and Shale Basins (2)
The most active shales to date are the Barnett Shale, the Haynesville/Bossier Shale, the Antrim Shale, the Fayetteville Shale, the Marcellus Shale, and the New Albany Shale. Each of these gas shale basins is different and each has a unique set of exploration criteria and operational challenges. (Page ES-2 #3)
The Haynesville Shale
The Haynesville Shale (also known as the Haynesville/Bossier) is situated in the North Louisiana Salt Basin in northern Louisiana and eastern Texas with depths ranging from 10,500 ft. to 13,500 ft. The Haynesville is an Upper Jurassic-age shale bounded by sandstone (Cotton Valley Group) above and limestone (Smackover Formation) below.
Comparison of Data for the Gas Shales in the United States (3)
In 2007, after several years of drilling and testing, the Haynesville Shale made headlines as a potentially significant gas reserve, although the full extent of the play will only be known after several more years of development are completed.
The Haynesville Shale covers an area of approximately 9,000 square miles with an average thickness of 200 ft. The thickness and areal extent of the Haynesville has allowed operators to evaluate a wider variety of spacing intervals ranging from 40 to 560 acres per well. Gas content estimates for the play are 100 scf (standard cubic feet of gas)/ton to 330 scf/ton. The Haynesville formation has the potential to become a significant shale gas resource for the U.S. with original gas-in-place estimates of 717 tcf and technically recoverable resources estimated at 251 tcf (page 20, 3)
“Stratigraphy of the Haynesville Shale” (3)
The United States has abundant natural gas resources. The Energy Information Administration estimates that the U.S. has more than 1,744 trillion cubic feet (tcf) of technically recoverable natural gas, including 211 tcf of proved reserves (the discovered, economically recoverable fraction of the original gas-in-place). Technically recoverable unconventional gas (shale gas, tight sands, and coal bed methane) accounts for 60% of the onshore recoverable resource. Haynesville Shale in the Texas & Louisiana Basin (3)
At the U.S. production rates for 2007, about 19.3 tcf, the current recoverable resource estimate provides enough natural gas to supply the U.S. for the next 90 years. Separate estimates of the shale gas resource extend this supply to 116 years. (Page ES-1, 3)
Factors have come together in recent years to make shale gas production economically viable such as advances in horizontal drilling and advances in hydraulic fracturing. Analysts have estimated that by 2011 most new reserves growth (50% to 60%, or approximately 3 bcf/day) will come from unconventional shale gas reservoirs. The total recoverable gas resources in four new shale gas plays (the Haynesville, Fayetteville, Marcellus, and Woodford) may be over 550 tcf. Total annual production volumes of 3 to 4 tcf may be sustainable for decades. (Page ES-1, 3)
The result is a dramatic increase in estimated natural gas reserves. The Potential Gas Committee, loosely affiliated with the Colorado School of Mines, reported in June that natural gas reserves in the United States are actually 35 percent higher than believed just two years ago, and some geologists say even that estimate is too conservative. (2.)
United States Energy Consumption by Fuel (2007) (3)
But, getting to those reserves may come too slow… Natural gas is being consumed by the U.S. economy at a rate that exceeds domestic production and the gap is increasing. Half of the natural gas consumed today is produced from wells drilled within the last 3.5 years. Despite possessing a large resource endowment, the U.S. consumes natural gas at a rate requiring rapid replacement of reserves. It is estimated that the gap between demand and domestic supply will grow to nearly 9 tcf by the year 2025. However, it is believed by many that unconventional natural gas resources such as shale gas can significantly alter that balance. The following exhibit shows a comparison of production, consumption, and import trends for natural gas in the U.S. with demand increasingly exceeding conventional domestic production. Without domestic shale gas and other unconventional gas production, the gap between demand and domestic production will widen even more, leaving imports to fill the need. Worldwide consumption of natural gas is also increasing; therefore the U.S. can anticipate facing an increasingly competitive market for these imports. This increased reliance on foreign sources of energy could pose at least two problems for the U.S.:1) it would serve to decrease our energy security; and 2) it could create a multi-billion dollar outflow to foreign interests, thus making such funds unavailable for domestic investment (Page ES-3 3)
COMPARISON OF PRODUCTION, CONSUMPTION AND IMPORT TRENDS FOR NATURAL GAS IN THE UNITED STATES (3)
This drilling advance that is a key element in the emergence of shale gas production has been the refinement of cost-effective horizontal drilling and hydraulic fracturing technologies. These two processes, along with the implementation of protective environmental management practices, have allowed shale gas development to move into areas that previously would have been inaccessible. (Page ES-3 3)
Shale gas operators are increasingly relying on horizontal well completions to optimize recovery and well economics. Horizontal drilling provides more exposure to a formation than does a vertical well. This increase in reservoir exposure creates a number of advantages over vertical wells drilling. An example is that six to eight horizontal wells drilled from only one well pad can access the same reservoir volume as sixteen vertical wells.
Trends in Shale Gas Production (MMcf/day) (3)
The other technological key to the economic recovery of shale gas is the hydraulic fracturing, which involves the pumping of a fracturing fluid under high pressure into a shale formation to generate fractures or cracks in the target rock formation. This allows the natural gas to flow out of the shale to the well in economic quantities. (Page ES-4 3)
The primary differences between modern shale gas development and conventional natural gas development are the extensive uses of horizontal drilling and high-volume hydraulic fracturing. The use of horizontal drilling has not introduced any new environmental concerns. In fact, the reduced number of horizontal wells needed coupled with the ability to drill multiple wells from a single pad has significantly reduced surface disturbances and associated impacts to wildlife, dust, noise, and traffic. Where shale gas development has intersected with urban and industrial settings, regulators and industry have developed special practices to alleviate nuisance impacts, impacts to sensitive environmental resources, and interference with existing businesses. Hydraulic fracturing has been a key technology in making shale gas an affordable addition to the nation’s energy supply, and the technology has proved to be an effective stimulation technique. While some challenges exist with water availability and water management, innovative regional solutions are emerging that allow shale gas development to continue while ensuring that the water needs of other users are not affected and that surface and ground water quality is protected. Taken together, state and federal requirements along with the technologies and practices developed by industry serve to reduce environmental impacts from shale gas operations. (Page ES5 3.)
These new discoveries have truly reset the clocks on Domestic Supply. The chart immediately above is data from 2008. As you who follow the Haynesville Shale know, 2008 was the announcement year for the Haynesville, and its reserves are now estimated as well beyond the Barnett. Note the significant increase in production attributable to the Barnett compared to older conventional sources. Other Shale Plays are in early discovery stages. We now see our country as able to sustain all our anticipated energy needs for well beyond the next several decades. The potential to offset crude oil imports with domestic production is in sight. Changing the US import-export balance of trade from net importer of energy to balanced will grant us the time and resources to study other forms of energy production. Our economy will blossom and our energy security will be in our favor for the first time in thirty years. This is a great gift and a tremendous development for the nation of which we should make the most. The transportation system should be converted as soon as possible to burn Natural Gas for all the reasons we have seen. Our recent article on the HSLA site gives more information on the value of this conversion. The economy and the security of this country depend upon it. The minimum risks posed by hydraulic fracturing and increases in continental drilling are more than offset by the boost to the economy and the reduction in GHGs. We can see no reason not to press ahead with conversion NOW.
Because of questions concerning chemical leakage into the ground water supply when using horizontal shale drilling and hydraulic fracturing, it might be of interest to you to know that Modern Shale Gas Development in the United States: A Primer was prepared by the Ground Water Protection Council, Oklahoma City, OK 73142, 405-516-4972, http://www.gwpc.org.
References:
1. “With Little Clout, Natural Gas Lobby Strikes Out” by Peter Overby, National Public Radio, npr.org, 9/24/09
2. “Rediscovering Natural Gas by Hitting Rock Bottom,” by Tom Gjelten, National Public Radio, npr.org, 9/22/09, (Includes graphic “Natural Gas: Traditional Drilling Areas (in black) and Shale Basins (in red))
3. Modern Shale Gas Development in the United States: A Primer, Ground Water Protection Council, Oklahoma City, OK 73142, 2009
Graphics include:
“Combustion Emissions (Pounds/Billion Btu of Energy Input)”
“Typical Composition of Natural Gas”
“United States Shale Gas Basins”
“Natural Gas: Traditional Drilling Areas and Shale Basins”
“Comparison of Data for the Gas Shales in the United States”
“Stratigraphy of the Haynesville Shale”
“Haynesville Shale in the Texas & Louisiana Basin”
“United States Energy Consumption by Fuel (2007)”
“Comparison of Production, Consumption and Import Trends for Natural Gas in the United States”
“Trends in Shale Gas Production (MMcf/day)”
(If you would like to read “Modern Shale Gas development in the United States: A Primer,” you may download it from: http://www.fossil.energy.gov/news/techlines/2009/09024-Shale_Gas_Primer_Released.html)
