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Marcellus Production Outlook

Has Well Productivity Peaked in the Nation’s Largest Shale Gas Play? The Marcellus shale gas play of Pennsylvania and West Virginia came onto the scene in 2007 in a big way and has grown to become the nation’s largest. It has accounted for much of the growth of U.S. shale gas production, and made up for declines in former shale gas giants like the Haynesville and Barnett plays of Louisiana and eastern Texas. Companies have scrambled to build pipeline infrastructure to connect the Marcellus to consumers in the U.S. northeast. Canadians, once supplied by gas from western Canada, are also looking to the Marcellus (and the much smaller Utica play in Ohio) for future supply; the pipelines that delivered gas to the east might be converted to instead deliver bitumen from the western tar sands. Companies in both the northeastern U.S. and eastern Canada are looking to build LNG […]

Posted On : Published By : Tom Whipple
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Projections show U.S. becoming a net exporter of natural gas

Source: U.S. Energy Information Administration, Annual Energy Outlook 2015 (interactive table viewer) In its recently released Annual Energy Outlook 2015 (AEO2015), EIA expects the United States to be a net natural gas exporter by 2017. After 2017, natural gas trade is driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of U.S. natural gas and world prices that encourages exports of liquefied natural gas (LNG), and, to a lesser extent, greater exports by pipeline to Mexico. The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed U.S. oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. […]

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Floating LNG regasification is used to meet rising natural gas demand in smaller markets

Floating regasification is a flexible, cost-effective way to receive and process shipments of liquefied natural gas (LNG). Floating regasification is increasingly being used to meet natural gas demand in smaller markets, or as a temporary solution until onshore regasification facilities are built. Of four countries planning to begin importing LNG in 2015, three of them—Pakistan, Jordan, and Egypt—have chosen to do so using floating regasification rather than building full-scale onshore regasification facilities. Floating regasification involves the use of a specialized vessel called a floating storage and regasification unit (FSRU), which is capable of transporting, storing, and regasifying LNG onboard. Floating regasification also requires either an offshore terminal, which typically includes a buoy and connecting undersea pipelines to transport regasified LNG to shore, or an onshore dockside receiving terminal. An FSRU can be purpose-built or be converted from a conventional LNG vessel. Floating regasification offers a flexible, cost-effective solution for […]

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US to launch blitz of gas exports

US to launch blitz of gas exports thumbnail The United States is poised to flood world markets with once-unthinkable quantities of liquefied natural gas as soon as this year, profoundly changing the geo-politics of global energy and posing a major threat to Russian gas dominance in Europe. “We anticipate becoming big players, and I think we’ll have a big impact,” said the Ernest Moniz, the US Energy Secretary. “We’re going to influence the whole global LNG market.” Mr Moniz said four LNG export terminals are under construction and the first wave of shipments may begin before the end of this year or in early 2016 at the latest. “Certainly in this decade, there’s a good chance that we will be LNG exporters on the scale of Qatar, which is today’s largest LNG exporter,” he said, speaking on the margins of the IHS CERAWeek energy summit in Texas. Qatar exports […]

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Chesapeake to Pay $25 Million to Settle Michigan Charges

Chesapeake Energy Corp. has agreed to pay $25 million to settle antitrust allegations made by Michigan’s attorney general, as well as complaints that it misled hundreds of landowners to obtain leases in the state. Michigan Attorney General Bill Schuette filed criminal charges against the company last year . He accused Chesapeake of colluding with Encana Corp., another oil and gas producer, to keep the price of natural gas leases in the state artificially low. In a separate case, Mr. Schuette’s office also filed racketeering and false pretenses charges against Chesapeake, saying the company had defrauded lease owners. Chesapeake has previously called the cases meritless. On Friday a spokesman said the Oklahoma City-based company was happy to have settled the matter. “We are pleased to have reached a mutually acceptable agreement with the Michigan Attorney General and to move past these legacy issues inherited from past management,” said Gordon Pennoyer, […]

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CERA 2015: Resilient Marcellus gas drillers are the ‘problem’: E&P executive

Major improvements by natural gas exploration-and-production companies have allowed them to continue to drill profitably in a period of depressed prices, adding to the glut of gas and putting further pressure on prices, an E&P executive said Wednesday at the IHS CERAWeek conference in Houston. "What’s happening is that we continue to get better and get more production per rig," Kyle Mork, president of Energy Corporation of America, said in reference to the seeming paradox of growing US natural gas production despite a record low level of rigs. "We’re the problem," he said. It is common knowledge in the industry that the main reason why natural gas prices — both Henry Hub and prompt-month futures — are trading at levels not seen since 2012 is because of the phenomenal growth in US natural gas production led by the Marcellus Shale. Article continues below… Gas Daily offers the most detailed […]

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Study: North Texas quakes likely linked to gas drilling

HOUSTON, Apr. 22 A seismology team in a study led by Southern Methodist University found high volumes of wastewater injection combined with brine extraction from natural gas wells was “the most likely” cause of earthquakes near Azle, Tex., during 2013-14. In an area where the seismology team identified two intersecting faults, they developed a 3D model to assess the changing fluid pressure within a rock formation in the affected area. They used the model to estimate stress changes induced in the area by two wastewater injection wells and more than 70 gas wells. “The model shows that a pressure differential develops along one of the faults as a combined result of high fluid injection rates to the west and high water removal rates to the east,” said Matthew Hornbach, SMU associate professor of geophysics. “When we ran the model over a 10-year period through a wide range of parameters, […]

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Oil Firms, Nations Agree to End Gas Flaring

ENLARGE A gas flare burns beyond petroleum cracking towers at the Lukoil-Nizhegorodnefteorgsintez oil refinery in Nizhny Novgorod, Russia, in December. Photo: Bloomberg NEWS WASHINGTON—Twenty-five major oil companies, oil-producing nations and development institutions agreed Friday to end the practice of routine flaring of natural gas by 2030 at thousands of oil production sites around the world. Royal Dutch Shell , Statoil , Kuwait Oil Co., Russia, Norway and the Asian Development Bank are among those making the commitment, which was announced by the World Bank and United Nations at an event in Washington Friday. No U.S.-based companies have signed onto the initiative. Many producers regularly burn off natural gas as carbon dioxide into the atmosphere when producing oil for a variety of reasons, including lack of infrastructure to move the gas and low economic incentive to use the gas. Andrei Lushin, World Bank Group Executive Director for Russia, said in […]

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How the Eastern Mediterranean Could Supply Natural Gas to Europe

As Europe is seeking sources of natural gas to serve as an alternative for the politically sensitive Gazprom supply, a massive gas source presents itself for exploration and production. Whether this will happen or not depends on Turkey, a potential transit country. The development of the Leviathan field offshore Israel and of the Aphrodite natural-gas field offshore Cyprus is a potential game-changer. If the East Med gas pipeline is built via Turkey, offshore Israel and Cyprus may become serious gas suppliers for Europe. Until recently, the lack of natural resources effectively excluded the two countries from being big players. Leviathan boasts recoverable reserves of 17 trillion cubic feet of gas and 1.6 billion barrels of oil equivalent. The Cypriot offshore Aphrodite field boasts estimated reserves of 7 trillion cubic feet. The European Union has publicly recognized that to ensure energy security and reach its climate-change goals, it must engage with […]

Posted On : Published By : Tom Whipple
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The case for an extraction tax

First, some background on U.S. natural gas sources and markets. Most of our country’s gas is consumed in the major population centers of the northeast, the so-called Washington-to-Boston corridor. It’s cold here in the winter and a number of homes use gas as a primary heat source. Gas is also used year-round to heat water, cook and dry clothes. Business and industry use gas to heat and cool buildings and it’s increasingly used for power generation. Starting around World War II and prior to the shale gas boom of the past eight years, most of the natural gas used in Pennsylvania came out of the ground in Oklahoma, Texas and under the Gulf of Mexico — yes, there are pipelines on the sea floor. (Fuel coming from outside Pennsylvania is referred to below as imported gas.) There is already major infrastructure in place to bring imported gas here. Large, […]

Posted On : Published By : Tom Whipple