Thursday, June 11, 2009

Haynesville Shale: Enough Nat. Gas for A Decade

FORBES (June 5, 2009) -- Haynesville Shale (LA and Eastern Texas, discovered in Dec. 2008) is touted as the largest natural gas field in the continental U.S. About 200 feet thick, the stream of shale lurks two miles under the pastures, trailer homes and piney woods of the region. The 3 million-acre formation stretches into East Texas and holds some 251 trillion cubic feet of recoverable natural gas. There could be enough gas to satisfy domestic demand for a decade, if market prices can justify going after it.

It's too early to say exactly how lucrative the Haynesville will be, but with impressive initial recovery rates, the production rush is on. East Texas and Northwest Louisiana have been producing oil and gas for decades, but new technology has made this new, deep play worth trying for. More than $3.2 billion has already been paid to private landowners in bonuses for leases and royalty checks. State and local tax revenues boomed by at least $153.3 million, according to an economic impact study released in April.

OIL AND GAS INVESTOR (May 26, 2009)-- The Haynesville shale may be the biggest natural gas play in the U.S. today. “Some think it may be one of the biggest gas fields in the world,” says Questar Corp. chairman, president and chief executive Keith Rattie. “And the irony here is that, until mid-March of 2008, very few people in the industry and certainly nobody in Washington had ever heard of the Haynesville shale.”

“The Haynesville shale is perhaps one of the best illustrations of that stunning breakthrough in our ability to exploit the resource base in this country,” Rattie says in describing whether the U.S. has sufficient natural gas supply to support conversion of more U.S. energy demand off oil and coal to natural gas.

“What we’ve seen in recent years is that technology that was first adapted to exploit gas in the Barnett shale in the Fort Worth Basin in Texas has now been applied to a series of major new shale plays that just a few years ago most observers thought would never be commercially viable. “We have the Fayetteville shale, the Haynesville shale, the Marcellus shale and, in Canada, there are the Horn River shales. You’re going to see horizontal drilling technology and, in particular, multi-fracture-stimulation technology applied to rock that we thought was unproducible just a few years ago.”

At the current rate of U.S. natural gas consumption, many gas-market observers suggest North America hosts a 100-year supply of proven, producible reserves.

FORGET THE WILDERNESS (June 23, 2003) --Forget about terrorists. Don't give another thought to SARS. The single greatest threat to the U.S. right now comes from a critical shortage of natural gas. The impending crisis will affect all consumers directly in the pocket book, and it may well mean that some people won't survive next winter. The problem is not with wells or pumps. The problem is that North America is running out and there is no replacement supply.

HT: Benjamin

19 Comments:

At 6/11/2009 7:12 AM, Blogger juandos said...

Hmmm, I have to wonder if the usual suspects will impede the development of these natural gas fields too...

 
At 6/11/2009 7:51 AM, Anonymous Anonymous said...

I must be wrong but it seems so obvious that nat gas is the way out of energy problems for the US. We've got plenty on our own soil.

many electrical plants run on it as a secondary source.

it is more expensive than coal and oil but those two have other intangible costs--pollution, co2,ME extortion. many cars and buses already run on NG. what am I missing here?

 
At 6/11/2009 8:15 AM, Blogger Colin said...

The answer is obvious: tax energy sources to compensate for their externalities and then let the market decide which source we should use. I don't have the answer as to which source the country should be using and neither do the politicians. They are not blessed with any unique insight.

There should be no national energy policy.

 
At 6/11/2009 9:19 AM, Blogger DaveinHackensack said...

"The answer is obvious: tax energy sources to compensate for their externalities and then let the market decide which source we should use. I don't have the answer as to which source the country should be using and neither do the politicians. They are not blessed with any unique insight.

There should be no national energy policy."


How would subjectively estimating the "externalities" of different sources of energy and then taxing them based on those estimates not comprise a national energy policy?

 
At 6/11/2009 10:04 AM, Anonymous Anonymous said...

Against the Gods

PIPELINE OUTLOOK

Kinder Morgan is also joint developer of the huge Rockies Express natural pipeline with Sempra Energy (SRE.N) unit Sempra Pipelines and Storage, and ConocoPhillips (COP.N).

When complete, the 1,679-mile pipeline will be one of the largest gas pipelines in North America, delivering about 1.8 billion cubic feet per day of gas from Rio Blanco County in Colorado to Monroe County in Ohio.

Adverse weather delayed the eastern advance of the pipeline several times in the past few months, but Kinder said the project is "weeks away" from reaching Lebanon, Ohio and affirmed the projected in service date to Clarington, Ohio, for Nov. 1.

Drilling activities were suspended due to flooding on both the Illinois and Wabash rivers.

In November, Sempra said project costs had ballooned to $6 billion from earlier estimates of $4.4 billion, due to rising labor and permitting costs on the eastern leg of the line.

Kinder said he has been "very frustrated with the costs," since fixed priced contracts on the western portion of the line came in under budget, but construction on the eastern portion was under time and material contracts and with the weather delays came the added expenses.

Reuters June 2

 
At 6/11/2009 11:35 AM, Blogger Benjamin Cole said...

Actually, there is enough natural gas for 120 years in the USA, thanks to the wonderful development of shale gas. Whoever developed shale gas should get a Nobel Prize. And we are just exploiting the stuff now. Prices could go down, and supplies up with more discoveries and better technology. This is a rare, unalloyed clear win for America.
A gasoline station in my work neighborhood recently installed a natural gas pump at 3600 psi. There appeared to be no excavation, and it was done quickly. If this is an example, such pumps are rather easily done, and could be put in any gasoline station in America. If you can get it done in L.A., it must be possible anywhere.
It is too bad about permit constraints.
But when the rendering plant is proposed for your neighborhood, you become a NIMBY greenie-weenie.
In Orange County, the most Republican part of California, voters shut down a needed international airport at El Toro Marine base, while land development in Newport Beach of more than 200,000 sf is subject to voter approval. You read that right.
The coastal cities of OC are some of the hardest places to build anywhere on earth, due to city rules.
And remember always the American Way: "Subsidize the risk, privatize the gain, and tax that man behind that tree."

 
At 6/11/2009 1:23 PM, Blogger Bloggin' Brewskie said...

B. Cole!? YOU ARE everywhere!! The quantum physics cops can't catch you - ha-ha!

Turns out Haynesville has a nice brother (and it's a lot closer than anyone would have guessed); plus, here's some wise words by Robert Aquilera, one of the world's foremost experts on shale gas production. Very promising.

And Uganda - who would have guessed? Now don’t take this one at face value - it may only by 20% true. But even 20% is huge.

 
At 6/11/2009 1:50 PM, Blogger QT said...

Benjamin,

Interesting to know the restrictions on development in CA and I thought site plan approval and the Greenbelt legislation were bad.

Anon,

Thanks for the link to the interview with Robert Aquilera. Some fascinating stuff. Engineering rocks.

 
At 6/11/2009 3:29 PM, Blogger Hot Sam said...

This comment has been removed by the author.

 
At 6/11/2009 5:31 PM, Blogger Cabodog said...

Why the heck is my car still running on gasoline?

I either want to burn natural gas directly or have it power my Honda Home Energy Station. http://automobiles.honda.com/fcx-clarity/home-energy-station.aspx

 
At 6/11/2009 6:41 PM, Blogger Benjamin Cole said...

Bloggin--

Actually, I saw this site referenced on your site. I like it.

 
At 6/11/2009 9:51 PM, Blogger White Rabbit said...

Hmmm...the largest potential field and...what?...will supply enough demand for 10 years.

Glad to hear we'll have a stay of execution (as it were) for an additional decade.

 
At 6/12/2009 12:17 AM, Blogger sethstorm said...


Hmmm, I have to wonder if the usual suspects will impede the development of these natural gas fields too...

No ski resorts nearby or "lifestyle environmentalists" on call?

As for Ritter:
I'd suspect a bit of a particular pine odor about the Colorado lawmaker.

 
At 6/12/2009 12:20 AM, Blogger sethstorm said...


Colin said...

Problem: It doesnt harm the ski-resort environmentalists who want clean slopes but drive gas-powered SUV's.

 
At 6/12/2009 7:00 AM, Blogger juandos said...

Consider the following from the U.S. Department of the Interior, Bureau of Land Management: While oil shale is found in many places worldwide, by far the largest deposits in the world are found in the United States in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.2 to 1.8 trillion barrels. Not all resources in place are recoverable; however, even a moderate estimate of 800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If oil shale could be used to meet a quarter of that demand, the estimated 800 billion barrels of recoverable oil from the Green River Formation would last for more than 400 years...


Consider the following also: Marcellus Shale - Appalachian Basin Natural Gas Play

(skip)

Recent Surprise Estimates

In early 2008, Terry Englander, a geoscience professor at Pennsylvania State University, and Gary Lash, a geology professor at the State University of New York at Fredonia, surprised everyone with estimates that the Marcellus might contain more than 500 trillion cubic feet of natural gas. Using some of the same horizontal drilling and hydraulic fracturing methods that had previously been applied in the Barnett Shale of Texas, perhaps 10% of that gas (50 trillion cubic feet) might be recoverable. That volume of natural gas would be enough to supply the entire United States for about two years and have a wellhead value of about one trillion dollars!

 
At 6/12/2009 10:00 AM, Anonymous Anonymous said...

The Democrats are one step ahead of you, they're moving to stop "hydraulic fracturing", thus denying access to most of these resources.

The next time you see some clueless leftist chanting, "No blood for oil", remember that it's the policies of the people that he supports that have pushed our search for energy overseas.


Rep. Diana DeGette (D., Colo.) is expected to slip a 97-word amendment into what was a 670-page cap-and-trade bill (that has since ballooned to 1,000 pages, reportedly — because, as James Hansen notes, it takes a lot of pages to buy votes for such an odious enterprise). This gem would give the EPA the regulatory reins over hydraulic fracturing — which, if you’ve ever had to deal with them, and if you’ve read the newspapers lately, is code for stopping it.

Never mind that fracturing techniques have been regulated and managed just fine by the states for decades, thank you very much. Never mind that it might soon come to pass that the EPA will be tasked with regulating the entire carbon-based economy.

This foolish mistake, while consistent with our unhappy history of choking off domestic energy supplies when they become too bountiful, is sure to get lost in the homages to Waxman-Markey during the forthcoming congressional discussion over that rationing scheme, which no one actually believes will make it through the Senate. But without a furor similar to the one that will greet the Obama Energy Tax, the congressional crib-strangling of expanded opportunities for hydraulic fracturing — and perhaps other follies, such as an LCFS (a“low-carbon fuel standard,” aimed at keeping abundant Canadian oil sands from seeping into our fuel supply — a.k.a., the Less Competition For Saudis provision) — may just slip through. And we’ll all be the poorer for it.

Still, in a complete surprise and an abandonment of long-running practice, industry appears to have anticipated and prepared for this assault. I see that a group of independents has launched a project aimed at educating those members who are poised to pretend that they have read the 1,000-page Obama Energy Tax bill that they will begin praising next week. Maybe there’s time.

The greens are betting there isn’t.

National Review

 
At 6/12/2009 5:34 PM, Blogger Old Guy said...

Can someone tell me why we are not using natgas for private cars? Muni busses do it. Argentina has 1/3 of cars powered by American made natgas cars. Honda makes the DX that runs on natgas and can be bought in the US. Not that I think CO2 is bad, but requirements to reduce it by 1/3 could happen in 5 years not 15. Engines would run longer. Cost is about 1/3rd. Pipelines and cars would not corrode as with ethenol. We could close the Department of Energy(anybody know what it has spent a nominal one trillion on for 30+ years) and use the money to finance natgas pumps overnight for stations. But no!. Let's go to one source in the world for Lithium to make batteries we can't get rid of and spend 30 billion per year to make buggy whips!

 
At 2/07/2011 4:01 PM, Blogger VangelV said...

"We have the Fayetteville shale, the Haynesville shale, the Marcellus shale and, in Canada, there are the Horn River shales. You’re going to see horizontal drilling technology and, in particular, multi-fracture-stimulation technology applied to rock that we thought was unproducible just a few years ago."

Something smells. And it isn't the natural gas.

http://tinyurl.com/4r7myjo

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http://tinyurl.com/4tl2k7l

http://tinyurl.com/2ezedx9

 
At 6/28/2011 9:14 PM, Blogger VangelV said...

Here we go boys and girls. Latest from Bill Powers on the Fayetteville shale area. The data is indicating that Fayetteville has peaked.

So what is this table telling us about EURs in the Fayetteville shale? First, based on the above information, there is little doubt that CHK and SWN have grossly overstated their EUR per well. For example, the 594 wells drilled between 2005 and 2007 are unlikely to ever produce much more than 1 bcf each. While I do not have access to the actual decline curves for these wells, there is no doubt that Fayetteville operators are using unrealistic decline curves that include transient flow (the gush of gas occurring immediately after a well is put on production which should not be included in proper analysis) and b-factors that are unrealistically high.

 

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