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EIA: Gas production, consumption up in US, down in OECD Europe

During a decade before 2005, natural gas production remained relatively flat in both US and European member countries of the Organization for Economic Cooperation and Development . OECD Europe gas consumption rose steadily over the period, outpacing production growth by 2%/year, but it was flat in US. This situation has been changed after 2005, according to a recent analysis from the US Energy Information Administration . Since 2005, gas production from shale plays has increased rapidly in US, twice as fast as gas consumption growth, reaching 24 tcf in 2012. Gas consumption, though not rising as fast as production, still grew by 16% over that same time period to 25.2 tcf in 2012. Use of gas from electric power generation accounted for most of the consumption gains. Net imports of gas have been reduced by 58% during those years. However, total natural gas production in OECD Europe has decreased […]

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Polish auditors slam government for slow pace of shale gas development

Poland’s national auditing agency this week criticized the slow place of developing the country’s shale gas industry, blaming government inefficiency. The Supreme Audit Office, or NIK, Monday issued a report warning that high hopes for establishing shale gas as a viable Polish industry by 2015 are being imperiled by “irregularities” in awarding concessions and the painfully slow establishment of a law governing the sector, Polish Radio reported. In the meantime, several foreign energy firms that came into Poland seeking to tap its shale gas potential, such as Exxon Mobil, Marathon Oil and Talisman Energy, have pulled out due to mixed exploration results and the uncertain regulatory landscape. At the current rate, it will take 12 years before Poland’s shale gas potential can be properly tapped, the NIK said. “In order to carry this out, it would be desirable to have about 200 wells,” […]

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U.K. to Pay Up To $3M a Well to Councils Allowing Shale Gas

Prime Minister David Cameron will give millions of pounds to local authorities that allow shale gas developments to go ahead, part of a drive to create more jobs and encourage investment in the U.K. Councils will be allowed to keep 100 percent of the business rates they collect from shale gas sites, double the current 50 percent figure, in a move that may be worth 1.7 million pounds ($2.8 million) per site in central government funding per year, according to figures released by Cameron’s office. Business rates are taxes to help pay for local services, charged on most non-domestic properties. “That’s going to be quite a significant boost for that local council’s coffers,” Business Minister Michael Fallon told the BBC . “We want local councils and local people to benefit from this exploration. We expect 20-40 wells to be drilled in exploration over the next couple of years.” Research […]

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U.S. gas output hits record high, but growth slows

Natural gas output in the U.S. is hitting record levels, but there’s mounting evidence that the best days of the shale boom are over. Government data released Tuesday show production climbed to 70.21 billion cubic feet in 2013. Output grew by just 1.5% from 2012, the slowest rate since output fell in 2005, before widespread use of new drilling technologies began to unlock massive quantities of natural gas from shale rock formations. The EIA is projecting output to rise by 2.1% in 2014 and 1.3% in 2015. The slowdown has major implications for gas prices. As abundant supplies flooded the market, benchmark U.S. gas prices have fallen, averaging $3.20 per million British thermal units over the past five years, down from close to $9/mmBtu in 2008. Sustained bouts of cold weather this winter have eroded supplies, spiking prices to two-a-half-year highs near $4.50/mmBtu recently. A […]

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Alaska unveils new way forward on gas line

Gov. Sean Parnell on Friday announced a new way forward on a long-hoped-for natural gas pipeline, including getting out from under terms of a 2007 law that he said no longer works well for the situation. In a major policy speech in Anchorage, Parnell said the state and Canadian pipeline builder TransCanada Corp. have agreed to terminate their involvement under the Alaska Gasline Inducement Act. He made clear, however, that TransCanada would remain a partner in the project, just under new terms. Parnell said he would seek legislative approval for state participation in a new commercial agreement with TransCanada and the North Slope’s three major players, Exxon Mobil Corp., BP PLC and ConocoPhillips. He said he expected an agreement with a set of terms to be signed soon. The governor said he also would propose legislation that would allow the state to enter into shipping […]

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U.S. Gas Output at Record High, but Growth Pace Slows

Natural gas output in the U.S. is hitting record levels, but there is mounting evidence that the best days of the shale boom are over. Government data released Tuesday show production climbed to 70.21 billion cubic feet in 2013. Output grew by just 1.5% from 2012, the slowest rate since output fell in 2005, before widespread use of new drilling technologies began to unlock massive quantities of natural gas from shale rock formations. The EIA is projecting output to rise by 2.1% in 2014 and 1.3% in 2015. The slowdown has major implications for gas prices. As abundant supplies flooded the market, benchmark U.S. gas prices have fallen, averaging $3.20 per million British thermal units over the past five years, down from close to $9/mmBtu in 2008. Sustained bouts of cold weather this winter have eroded supplies, spiking prices to two-and- a-half-year highs near $4.50/mmBtu recently. […]

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LNG growth to make US net natural gas exporter by 2016: report

T The US will become a net exporter of natural gas by the first half of 2016, largely due to the expected rapid growth of the US liquefied natural gas export industry along with a boost in Mexican pipeline capacity and a drop in domestic demand for Canadian gas, analysts with Barclays Commodities Research said in a report Thursday. "In a shift of tectonic magnitude, the US is firmly on track to become a net exporter of natural gas, with far-reaching implications for the US economy, geopolitics, natural gas markets and the global LNG space," the report said. Barclays analysts see US LNG exports, specifically six LNG export facilities it expects will begin shipping LNG by the end of the decade, as the largest driver shifting the US from a gas importer to a gas exporter by June 2016. Article continues below… Request a free […]

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EIA: U.S. October Lower 48 Gas Output Up 2% on Year; Near Record

U.S. natural gas output in the Lower 48 states rose 0.9% in October to 74.6 billion cubic feet per day, fractionally below the high of August 2013, government data released Tuesday show. The rise of 0.65 bcf/day came against a September level that was revised up modestly to 73.95 bcf/day, the Energy Information Administration said. Output rose 2% from a year earlier and was just shy of the record level of 74.68 bcf/day for August 2013, which EIA revised up Tuesday, by 0.26% from last month’s report. Much of the rise came from the Marcellus shale area of West Virginia, Ohio and Pennsylvania, where many operators reported new wells had come on stream, the EIA said. The EIA said output from so-called other states, or those outside the traditional producing areas of Louisiana, New Mexico, Oklahoma, Texas, Wyoming and the Gulf of Mexico, rose by […]

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Are natural gas suppliers purposely overproducing?

On December 27, 2013, Matt Wald published a piece in the New York Times titled New Energy Struggles on Its Way to Markets that points to the predictable consequences of having too many energy options chasing too few customers. When there is excess supply compared to demand, prices tend to fall rather dramatically. Falling prices result in some suppliers being forced to either stop selling or to sell their product for an amount that is less than production cost. Eventually, markets balance out as weaker suppliers are driven out, reducing both production and production capacity. Lower prices lead to increased demand and shifts in market share to options that seem to meet customer needs at a lower cost. The oversupply situation disappears and price begin to climb back to a more profitable level. The cycle may continue, but only after a profitable period when supply does not quite match […]

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Alaska to withhold gas project terms until companies reach commercial agreement

Alaska will withhold an offer of special state fiscal terms for a large North Slope gas pipeline and liquefied natural gas project until companies working on the project reach agreement on terms among themselves to proceed with the project, a spokeswoman for Governor Sean Parnell said Friday. Parnell mentioned his frustration with North Slope producers and TransCanada over the glacial pace of the project in a budget briefing two weeks ago, and his position was affirmed Friday by his spokeswoman, Sharon Leighow. BP, ConocoPhillips, ExxonMobil and TransCanada say they need an agreement with the state covering tax and royalty terms before proceeding with the project, which is estimated to cost $45 billion to $65 billion. Parnell said, however, he wants to see more progress on the project first. "I want to see commercial terms agreed on between the companies or steps toward a […]

Posted On : Published By : Tom Whipple