Wednesday, January 13, 2010

U.S. #1: Overtakes Russia as Top Nat Gas Producer

BLOOMBERG -- The U.S. overtook Russia as the world’s largest natural-gas producer last year as U.S. suppliers tapped unconventional resources while demand in Russia plunged amid the country’s worst economic decline on record. U.S. output in January through October advanced 3.9% from a year earlier to 18.3 trillion cubic feet (519 billion cubic meters), according to the latest Department of Energy data. Russian output, about four-fifths of which comes from state-run OAO Gazprom, plunged 17 percent in the period to 462 billion cubic meters.

“Minimal hurricane disruptions and significant growth in production from onshore shale basins have contributed to the increase in domestic supply,” the Department of Energy’s Energy Information Agency said on its Web site last month. The U.S. growth trend may indicate that Gazprom will not be able to break into the U.S. market as it had planned, Mikhail Korchemkin, head of East European Gas Analysis, said today by telephone today from Malvern, Pennsylvania.

The state-run Russian company set a target to take as much as 10% of the U.S. market by 2020 through sales of liquefied natural gas, or LNG, from Arctic deposits, Gazprom Deputy Chief Executive Officer Alexander Medvedev said in June.

The surprising boost shale gas has given U.S. output has closed the world’s biggest energy consumer to some imports and “created a huge oversupply of LNG in Europe,” Korchemkin said.
MP: The chart above displays EIA data for annual "U.S. natural gas gross withdrawals," and shows an almost 3 trillion cubic feet increase in production since 2005 (a 12.5% increase).

From my recent article in the Detroit News:

What's getting all of the attention recently is hydraulic fracturing, a process that involves injecting a mixture of water, sand and chemicals under high pressure to break through shale formations to reach enormous deposits of natural gas several miles underground. New advances in seismic imaging are used to find the shale gas, and horizontal drilling enables companies to reach the gas and bring it to the surface.

Largely through the use of these techniques, U.S. natural gas production has increased 40% in recent years, reversing what was once thought to be an irreversible decline in domestic drilling. Altogether there could be as much as 842 trillion cubic feet of natural gas in shales around the country, which is more energy than all of Saudi Arabia's oil.

9 Comments:

At 1/13/2010 3:55 PM, Anonymous Benny The Man said...

This is great news.
BTW, cars can run on CNG.
There is a website, cngvehicles.net, showing a used car dealer right now offering CNG cars at great prices.
If ever Peak Oil accounts to anything, expect a runaway boom in CNG.
The problem is, we keep finding more oil, and getting more-efficient at using it.

 
At 1/13/2010 5:22 PM, Anonymous Lyle said...

Recall the Pickens plan was to move 18wheelers to cng first. There are several advantages if this is done starting with local delivery trucks. First you can just put the facilities at the depots for fueling, you don't have to build the infrastructure everywhere. Second you put it at interstate truck stops. With this one would catch most of the major truck routes without having to do it at every corner gas station.

In the larger sense nat gas and renewables combine nicely, since the turbine plants are fast start. Use the wind/solar when available, and the nat gas as a backup. Clearly nat gas plants used part time are economic, because a large number exist now that run only during peak loads, such as in Texas the summer.

 
At 1/13/2010 5:47 PM, Anonymous Anonymous said...

Don't worry.. The Democrats are working on putting an end to natural gas production.

 
At 1/13/2010 7:55 PM, Blogger OA said...

Let's see, a fuel source coming from the ground, and burns with a CO2 byproduct. Why do I expect there to be some new tax on this if used to fuel vehicles? Particularly if natural gas prices stay low.

Not immediately, since that makes a farce of the incentives to go CNG. But reach some critical mass of vehicles... We all know how this story ends.

 
At 1/13/2010 9:03 PM, Anonymous Anonymous said...

Benny is right about vehicles being able to run on CNG. As your will be able to tell, I am passionate about this topic.
Honda builds a CNG Civic and some states have incentives and filling stations while most do not. Today, there are a couple of barriers for affordability in motor vehicles:
1. It is fairly expensive to liquefy at home. Phill, a commercially available compressor, is about $5000 runs a few hours to fill your tank and has to be rebuilt every 2000 hours.
2. Tanks are expensive and have to be certified every 10 years.
Since we export and import considerable liquefied CNG, I suspect larger liquefaction plants can liquefy at a low unit cost and costs of tanks for automotive use would decrease with higher demand too.
We are burning enormous amounts on natural gas for electricity generation. It is a shame to squander natural gas for the electric grid when it is portable enough for automobiles. Emissions compared to gasoline or diesel is much better but the EPA requires very expensive certification. This creates a barrier for entry into the automotive market for something that is more environmentally friendly.
Importing 12 Million barrels of oil a day, much of which is from countries that don’t like us, is extremely disturbing economically and politically.
It is also disturbing to see the amount of incentives for ethanol production (from a food source) while we have tariffs on imported ethanol. If it is so great and environmentally friendly, why are we penalizing imports?
We’re investing money in wind and solar for the electric grid. Utility companies still have to be able to meet peak demand without the aid of wind/solar due to their inability to provide “base load” power on still/cloudy days and there is no direct opportunity to reduce dependence on oil with wind/solar. Natural gas needs incentives to gain acceptance and get up to a critical mass then could turn into an industry which is self sufficient. The production cost of wind and solar does not appear to have the same opportunity to compete with trade off alternatives in the foreseeable future.

 
At 1/14/2010 6:55 AM, Blogger rjs said...

we were top oil producer, too, for dozens of years, before we started running out...

 
At 1/14/2010 5:58 PM, Anonymous diz said...

Here is a good video explaining how these shale plays are produced:

http://www.api.org/policy/exploration/hydraulicfracturing/hydraulicfracturing.cfm

 
At 1/17/2010 3:05 PM, Blogger Nebel said...

nice

 
At 1/19/2010 3:54 PM, Anonymous Michaela said...

Realm Energy is focused on driving the exploration and development of major shale plays throughout Europe and emerging countries.
The Company is in the process of acquiring petroleum and natural gas rights in large contiguous tracts which it has identified as high potential, and is committed to leveraging the most advanced shale technology to bring these resources into production. visit the blog at http://realm-energy.com to learn more.

 

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