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Natural Gas Execs See ‘Century Of Supply’ In US Shale

Natural Gas Execs See ‘Century Of Supply’ In US Shale thumbnail

Natural gas production from U.S. shale fields can keep growing for decades, giving Washington a powerful diplomatic tool to counter the geopolitical influence of other energy exporters such as Russia, industry executives and government officials said at a conference here.

Already the world’s largest gas producer, the United States can expand shale gas output another 60 percent in the coming decades, according to at least one estimate. So far, liquefied natural gas (LNG) has been spared from retaliatory tariffs in U.S. President Donald Trump’s intensifying trade conflicts with China and other countries.

“We see a century of natural gas supply in U.S. shale,” Ryan Lance, chief executive of U.S. shale producer ConocoPhillips said this week at the triennial World Gas Conference in Washington. “Shale’s abundance is real and it’s not going away.”

The United States currently produces about 72 billion cubic feet (bcf) of natural gas each day, a figure that is expected to grow by 7 bcf per day this year. And within 20 years, U.S. shale gas output should grow an additional 60 percent, according to a study from IHS Markit Ltd.

While Trump’s tariffs against China, Europe, Mexico, Canada and others have cast a short-term pall over Washington’s energy ambitions, the administration has repeatedly said it is eager to expand fossil fuel supplies to global allies through supply agreements and technology sharing. Trump is also rolling back domestic regulations to encourage more oil and gas production.

The strategy, which Trump dubs “energy dominance,” is aimed at making the United States a viable alternative to rival energy producers like Russia, as Washington seeks to forge bonds with big consumers like China.

“We’re sharing our energy value with the world,” Rick Perry, the U.S. secretary of energy, said this week at the conference.

Global Markets Upended

Conoco and its U.S. peers have sharply ramped up natural gas production in the past decade, using hydraulic fracturing technology to tap shale fields in Texas, Pennsylvania and elsewhere.

The United States is also boosting export capacity. LNG facilities from Cheniere Energy Inc, Tellurian Inc and others are either operating or planned across the U.S. Gulf Coast.

“What the U.S. has done for the world with shale gas is given another form of affordable, competitive energy that can be relied upon,” said Jack Fusco, Cheniere’s CEO, said at the conference.

Cheniere, one of the largest exporters of U.S. natural gas, has shipped more than 350 LNG cargos to 28 countries around the globe, including China.

“Gas is much more of a global market than it used to be,” Dan Yergin, an energy economist and IHS Markit vice chairman, said at the conference this week.

The ramp-up in U.S. shale gas production coincides with a demand spike from power producers, with coal-fired generation increasingly anathema across the developing world. Industry executives have aggressively touted gas as a way to increase access to affordable electricity and limit greenhouse gas emissions.

“This shale gale has boosted the U.S. economy and transformed markets around the world,” Darren Woods, CEO of Exxon Mobil Corp, said at the conference.

Exxon has the most drilling rigs operating in the Permian Basin of West Texas and New Mexico, the second-largest U.S. gas producing region. By 2025, the company wants to more than triple its Permian output to more than 600,000 barrels of oil equivalent per day.

Rising U.S. output has not gone unnoticed by major consumers around the world, with South Korea, China and others eager for stable fuel sources.

“There’s going to be a big difference in the way the global gas market works in the future compared to how it’s worked in the past,” said Rusty Braziel of RBN Energy consultancy.

RIGZONE



21 Comments on "Natural Gas Execs See ‘Century Of Supply’ In US Shale"

  1. Davy on Sat, 30th Jun 2018 6:15 am 

    This natural gas thing is interesting and like unconventional oil will the economy allow natural gas from fracking to continue its growth? Is there really the reserves they tell us there are? It is hard to believe these people because they are marketing themselves but they have shown huge results that proved naysayers wrong. This so called gas revolution has completely surprised peakers. Can the US really become a world force in gas? One thing is certain it is heading in that direction at least for now. If this effort fails it will be a very difficult for the world and the US. So many changes in the US energy markets are being driven by cheap gas. Nuk and coal are being priced out of markets. Cheap gas will likely assist renewable expansion. Renewable have the potential to create demand destruction with gas. Gas is another important Peak Energy issue to watch.

  2. Anonymous on Sat, 30th Jun 2018 10:30 am 

    Gas has been much more dramatic and unarguable (for peakers) than oil. With oil, you can make the argument that prices enabled an sustain shale. Can’t make that argument with gas. We are sustaining (growing) production at sub $3 Henry hub gas.

    Also, the US is a larger percentage of global production in gas (20%) than in oil (13%).

    And gas is a much cleaner hydrocarbon than oil or coal.

    The PGC (a very good committee of geologists) estimates total technical resource at over 3000 TCF. Since we use about 3 TCF per year, that is a 100 year supply. And that’s a 2016 estimat for resource. It will go up this year!

    http://potentialgas.org/

    You can worry about “using up the high grade”, but if anything, the history of shale gas has been one of improving the technology faster than dropoff in field quality (plus several attractive new areas have been found, even well into shale revolution). Volume is up, price is down. And shale is actually pushing other producers out of the market since it is so large and cheap. Rockman is one of them–they shut him down in GOM drilling–he couldn’t compete.

    If you want a laugh, look at David Hughes saying we were at peak gas at 2006 ASPO and would not be able to build LNG IMPORT fast enough to keep up with his posited 1.5 BCF/d/year decline:

    https://www.youtube.com/watch?v=poRAEL7M9Ds

  3. dissident on Sat, 30th Jun 2018 10:42 am 

    Like these executives are the final word on the truth. Their job is to make sure their stocks don’t crash. So none of them will ever, ever admit that “shale” gas is already hitting peak.

  4. Anonymous on Sat, 30th Jun 2018 11:51 am 

    1. 3000 TCF total versus 30 TCF per year -> 100 year supply. (Correcting typo above.)

    2. Dissident, the execs are not really the source. PGC, a group of very good geologists is. And for what it is worth, everyone so far peakers, EIA, execs have UNDERESTIMATED shale gas in the past, not overestimated. The people who will never admit they are wrong are peakers.

  5. Bob on Sat, 30th Jun 2018 1:13 pm 

    Get your Century of Gas right here! Exporter to the World! We are upending Markets! Energy dominance! Gas will be lucky to make it past the next 10 years without collapsing. The Frackers are so over the top with their make-believe facts, figures, and financing. Utility companies would be much better off investing in wind and solar instead of their gas peaker plants. At the end of the day all we will have will be wind and solar. Get used to it.

  6. MASTERMIND on Sat, 30th Jun 2018 1:17 pm 

    The Shale Gas Revolution Is A Media Myth
    https://oilprice.com/Energy/Natural-Gas/The-Shale-Gas-Revolution-Is-A-Media-Myth.html

    Insider Documents: Industry Privately Skeptical of Shale Gas
    https://archive.nytimes.com/www.nytimes.com/interactive/us/natural-gas-drilling-down-documents-4-intro.html

    Read what those insider emails the times released said..My favorites were

    Shale gas is a ponzi scheme

    Drill fast con wall street

    We are headed for an Enron moment

    Where is the SEC?

    LMFAO!

  7. MASTERMIND on Sat, 30th Jun 2018 1:36 pm 

    Trump allies Giuliani, Gingrich tell Paris opposition rally end is near for Iran’s rulers

    http://www.middleeasteye.net/news/trump-allies-giuliani-gingrich-tell-paris-opposition-rally-end-near-irans-rulers-1551753877

    Trump is turning into a globalist Neocon wanting more middle east regime change!

  8. Cloggie on Sat, 30th Jun 2018 2:32 pm 

    “Trump is turning into a globalist Neocon wanting more middle east regime change!”

    ….or he is looking for an opportunity to break up the country, I mean the US.

    Oh and you “overlooked” this:

    “Gingrich stressed he did not speak for the Trump administration”

  9. rockman on Sat, 30th Jun 2018 4:04 pm 

    Actually, if one wants to point to a “NG revolution” it happened between 1950 and 1970 when US production increased 350%. So far since 2005 thru 2117 it has increased 150%. And since Dec 2017 thru the first 4 months of 2018 it has been flat to decreased a tad.

    https://www.eia.gov/dnav/ng/hist/n9050us2M.htm

    What will it do in the future? I don’t know. No one had a basis for predicting the boom starting in the 50’s just as no one did in the early part of this century. Of course, anyone is free to predict the future. And of course, no one can prove their prediction today. Both optimists and pessimists can line up the assumptions that support their projections. But same problem: neither side of the debate can prove those assumptions correct. Why they are classified as “assumptions” and not “facts”.

  10. Harquebus on Sat, 30th Jun 2018 7:11 pm 

    Fleets of trucks, huge mining operations and modern agriculture being fueled by natural gas? Yeah, right. They all use diesel for a reason.
    No trucks = no mining, no gas and no food.

  11. DMyers on Sat, 30th Jun 2018 10:00 pm 

    Once again, I offer the classic case of natural gas abundance gone wrong, the Indiana Gas Boom, circa 1900. There was no end to it, by popular perception. They even lit up so-called flambos, where natural gas broke the surface and served to fuel a twenty four hour light source, on the whim of anyone who could tap a natural gas portal, and there many. These hastened the demise of the resource for little purpose whatsoever.

    The natural gas bounty was believed to be so huge, that the state capital was slated to move from center point, Indianapolis, to natural gas country north east of Indy.

    In fact, this infinite bounty of natural gas in Indiana was largely depleted in about twenty years. Believe what you want, but don’t ignore what we have already learned about these grandiose predictions for nat gas.

  12. Plantagenet on Sun, 1st Jul 2018 1:20 am 

    Obama said the US had a 100 supply of NG. So far there is no reason to doubt his geologic judgement. CHEERS!

  13. Anonymous on Sun, 1st Jul 2018 2:00 am 

    In 1956, Hubbert predicted that 2018 production would be about 4 TCF per year. It is actually close to 30 TCF per year. Almost TEN TIMES what a peaker predicted. This is what the too low resource estimates of peak oilers leads to.

    See this link, page 32:

    https://longtailpipe.com/document/nuclear-energy-and-fossil-fuels-m-king-hubbert-1956/

  14. coffeeguyzz on Sun, 1st Jul 2018 5:36 pm 

    Anyone who is even remotely following the unfolding events regarding US natgas developments recognizes that measuring in centuries is becoming routine.

    Within 2 years, the USGS is expected to release updates on Utica and Marcellus recoverable.
    At 27 Tcf/year, the anticipated App Basin potential of 1,600 Tcf would be 60 years’ US consumption from this one Basin alone.

    No, the enormous HH/WTI spread will accelerate the adoption of natgas into the transportation sector with Adsorbed Natural Gas technology paving the way.

  15. Duncan Idaho on Sun, 1st Jul 2018 5:45 pm 

    They all use diesel for a reason.

    yep, almost all major cities would be without food in 3 days without diesel.

  16. Anonymouse1 on Sun, 1st Jul 2018 5:45 pm 

    coffeeguyzz = nony(tard)

  17. Makati1 on Sun, 1st Jul 2018 6:29 pm 

    Nat Gas replace oil for most commercial/industrial vehicles? Not in your lifetime or mine. You have to have noticed that this info comes from Rigporn. LOL

  18. coffeeguyzz on Mon, 2nd Jul 2018 12:26 pm 

    Makati

    Interesting comment that may belie ignorance regarding the continual shift to CNG/LNG of busses, garbage trucks, delivery vehicles now numbering in the thousands from UPS, Fed Ex and others as the shift away from diesel is actually accelerating.

    The demand for low sulphur fuel is set to skyrocket – along with cost – when the 2020 emissions regulations kick in from the IMO.
    While 50,000+ ships may be impacted,the massive fuel shortfall indicates non compliance is inevitable.

    Still, truckers burning 5 to 8 buck a gallon fuel will be crucified when competing against more economical approaches.

    The dizzying pace of technological advances in the Metalic Organic Framework (MOF) arena ensures commercial adaption will occur sooner rather than later.

    The price of heat energy (Btus) contained in gaseous form is simply WAY too cheap versus the liquid form to maintain the status quo.

  19. rockman on Mon, 2nd Jul 2018 2:37 pm 

    We often talk about the inflation adjusted price of oil but rarely that of NG. Many don’t realize how cheap NG has been recently. In fact, in 2012 the price reached its lowest level more than 4 decades.

    https://i1.wp.com/inflationdata.com/articles/wp-content/uploads/2013/07/Inflation-Adjusted-Natural-Gas.jpg

    And despite that low price look at the optimistic views about the future of NG production. Imagine the projections if the price was twice the current value…as it was not long ago in 2006. Of course, it cuts both ways: what would happen to our “bridge to the future” if it had a toll 2 to 3 times the current price? Just as it with oil it’s a dynamic situatiotn: one shouldn’t look at just one side of the equation and ignore the other. Owners of CNG vehicles and new NG fired power plants might suffer at $7/mcf Henry Hub prices. But it might bring a big smile to some coal miners. Like the big power plant in Texas with 3 NG burners and 3 lignite burners. Which has been burning only NG lately. The plant that was the second largest single source of GHG in the country. Which is now part of the largest CO2 sequestration operation in the world. Which could lead it to 100% coal burning should NG prices get high enough…our lignite is very cheap.

    Again, not a simple dynamic.

  20. rockman on Mon, 2nd Jul 2018 3:25 pm 

    DMyers – “In fact, this infinite bounty of natural gas in Indiana was largely depleted in about twenty years.” Largely depleted? Not until 2011 when Indiana NG production increased 85X what it was producing in 1994.

    https://www.eia.gov/dnav/ng/hist/n9010in2A.htm

    Dug thru a bunch of links but couldn’t find even one guess as to how much NG was produced at the height of the boom in 1905. Might have beat that volume in 2011…might not have. But one thing for certain: production was not “largely depleted”. Just had to wait 100 years. LOL.

  21. Anonymous on Wed, 4th Jul 2018 4:47 am 

    Lower price AND higher volume. Can you say “shale gale”?

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