This is an excerpt from EERE Network News, a weekly electronic newsletter.

August 06, 2008

Study Finds a Large Supply of Natural Gas in U.S. Shale Formations

A new study from Navigant Consulting and the American Clean Skies Foundation (ACSF) suggests that the United States has ample supplies of natural gas in "unconventional" sources such as shale formations, coal beds, and so-called tight sands, which are geologic formations with low permeability to natural gas. The report finds the most potential in shale formations, estimating that the seven largest U.S. formations will yield at least 27 billion cubic feet (Bcf) of natural gas per day, equal to about 43% of the current natural gas consumption in the United States. That diverges from projections of DOE's Energy Information Administration (EIA), which predicts 26 Bcf per day of natural gas from all unconventional sources by 2030, even though tight sands are currently producing 5.8 Bcf per day and coalbed methane is producing 4.1 Bcf per day.

But both EIA and the new study agree on one fact: the largest current source of shale gas, the Barnett Shale formation in Texas, is a major unconventional resource. Located under Fort Worth, it now accounts for 6% of natural gas production in the lower 48 states, thanks to wells that run a mile-and-a-half deep, then run horizontally for about a mile. On the downside, drilling rigs are now located at the Dallas/Fort Worth International Airport and within the Fort Worth city limits and "are headed downtown," according to the EIA. See the ACSF press release, the Navigant study (PDF 9.9 MB), and the EIA's "Energy in Brief" on recent trends in U.S. natural gas production. Download Adobe Reader.

The EIA currently projects essentially steady U.S. production of natural gas, declining Canadian imports, and increasing demand, causing the United States to import about 7.7 Bcf per day of liquefied natural gas, or LNG, by 2030. That increasing dependence on imports, and the price volatility that may accompany it, has discouraged an overdependence on natural gas in the electric utility sector and may also be discouraging its use for vehicles. But if unconventional natural gas resources truly pan out as predicted by the Navigant report, they may encourage a greater shift away from the use of coal and petroleum resources. Note that the EIA projections also depend on a natural gas pipeline connecting Alaska to the lower 48 states in 2020, increasing Alaska's production from today's level of about 1.1 Bcf per day to about 5.5 Bcf per day within a few years of its completion. That prospect became more certain last week, when Alaska passed legislation to award a license to TransCanada Alaska to permit, develop, and build the natural gas pipeline. See the section from the EIA's "Annual Energy Outlook 2008" on natural gas and see the announcement on the pipeline from Alaska Governor Sarah Palin.