According to a study released by the Massachusetts Institute of Technology in June 2010, natural gas is predicted to double its share of the energy market, from 20 percent to 40 percent, by 2050. With the tremendous success of the Barnett, Fayetteville and Woodford shales in the United States, shale gas development will play a major role in meeting this increasing demand. Already the Barnett Shale in Texas produces 6 percent of all natural gas produced in the Lower 48 states. Recent announcements of emerging plays in Appalachia, Northern Louisiana, British Columbia, and South Texas indicate the widespread potential of shale gas resources across North America.
Additionally, a study released in July 2010, “The Economic Impacts of the Marcellus Shale: Implications for New York, Pennsylvania, and West Virginia,” by Timothy J. Considine, Ph.D. of Natural Resource Economics, found that if developed, natural gas production in the Marcellus Shale region could create 280,000 new American jobs and add $6 billion in new tax revenues to local, state and federal governments over the next decade.
During 2009 alone, natural gas production in the Marcellus added 57,000 new jobs mostly in Pennsylvania and West Virginia. The Economic Impacts study predicts that many tens of thousands of more jobs could be created in the coming years if public policies do not drastically limit production.
Shale gas is defined as natural gas from shale formations, with the shale acting as both the source and the reservoir for the natural gas. Each of these shale gas basins is different and each has a unique set of exploration criteria and operational challenges.
In general, shale gas deposits are often lower in resource concentration, more dispersed over large areas, and require well stimulation or some other extraction or conversion technology, like hydraulic fracturing, to produce. The rapid rise in production from shale formations is due in large part to hydraulic fracturing and other significant advances in horizontal drilling and well stimulation technologies.
More information about shale gas and U.S. energy security:
How important is shale gas to the U.S. energy mix? According to forecasts by consulting firm ICF, tight gas, coalbed methane and shale gas will make a major contribution to future North American gas production—with unconventional gas production expected to increase from 42 percent of total US gas production in 2007 to 64 percent in 2020.
How much shale gas is available in the United States? In November 2008, the Interstate Natural Gas Association of America (INGAA) published “Availability, Economics and Production Potential of North American Unconventional Natural Gas Supplies,” a report that estimates natural gas resources in North America exceeding 2,300 trillion cubic feet (Tcf)—with shale gas resources alone accounting for over 500 Tcf of recoverable natural gas in the United States and Canada. For the lower 48 states, shale gas is estimated at 385 Tcf. However, the report states that the industry must have land access for drilling, a reasonable permitting process and adequate prices and demand for natural gas to achieve the forecasted results.
How long are shale gas resources expected to last? The U.S. Department of Energy’s April 2009 report, “Modern Shale Gas Development in the United States: A Primer,” stated that at 2007 U.S. natural gas production rates of about 19.3 Tcf, the current recoverable resource estimate provides enough natural gas to supply the US for the next 90 years. Separate estimates of the shale gas resource extend this supply to 116 years. Production of shale gas is expected to increase from a 2007 US total of 1.4 Tcf to 4.8 Tcf in 2020. The DOE report states that shale gas production potential of 3 to 4 Tcf per year may be sustainable for decades.
How accurate are assessments of shale gas potential? The INGAA study states that the assessment of shale gas potential in the United States and Canada is a work in progress and there is a long way to go to understand remaining potential and implications for future natural gas production. The advance of drilling and well completion technologies, including hydraulic fracturing, has opened up plays in a number of different basins that were not previously considered to have economic potential. The volumes calculated for gas-in-place are extremely large, and a small difference in the estimated percentage of gas-in-place that is recoverable has a huge impact on estimates of recoverable resources.