With global crude oil prices reaching peak levels the push into alternative energy and renewables has never been so prevalent.
Within the US, the significant increase in Shale gas E&P activity over the past few years has significantly altered the landscape of the natural gas industry, and opened a number of various energy avenues.
Those avenues used to be notoriously tricky, however the advancement in horizontal drilling and better technologies mean shale gas is a more attractive proposition, and now provides a good hunting ground for US energy companies keen to explore and utilise these new commodities, with an eye on foreign exportation.
Contrary to this, Alexander Medvedev, Head of Exports at Russian Gas giant, Gazprom, said he thought it $quot;unimaginable$quot; that shale gas would be allowed to be developed. He said Gazprom believes the US Environmental Protection Agency will raise concerns about its potential contamination of drinking water in a forthcoming report.
In the interim a woman from Sugar Run, Pennsylvania has filed a lawsuit against Chesapeake Appalachia, LLP, alleging its drilling of nearby natural gas wells has contaminated her water supply.
The Stakes are high for the oil and gas companies as shale gas represents a huge opportunity. The US has been a pioneer in this technology with shale gas extraction expected to spread rapidly in different parts of the world.
According to the consulting firm ICF forecasts that tight gas, unconventional gas including shale production is forecast to increase from 42 percent of total US gas production in 2007 to 64 percent in 2020. Despite the current economic conditions, the long-term need for US natural gas should be strong enough to support these anticipated future production levels.
To discuss the challenges involved with meeting increased demand in production many of the industry’s main protagonists met at the Next Generation Oil and Gas Summit in Texas this week. Among the high profile attendees were Robert Abendschein, VP E&P Services of Anadarko, Mark Kapner, Austin Energy, David Keane, VP Policy & Corporate Affairs of BG Group, Luiz Amado, of Petrobras America, Greg Smith, Director, US Business Unit of Repsol and Ronald Cramer, Senior Advisor of Shell.
The idea of shifting shale gas abroad is pivotal to US exploration. In Europe, shale potential is great, with around 700 TCF of reserves estimated to be in place in the western section of the continent. Within the US, however the number is much greater, with the Potential Gas Committee, in their biennial assessment of the nation’s gas resources in June 2009, estimating that the US possesses a resource base of 1,836 TCF of natural gas.
When combining these results with the Department of Energy’s latest determination of proved gas reserves, 238 TCF as of year-end 2007, the United States has a future supply of natural gas of over 2,000 TCF.
The US Department of Energy stated that at the US natural gas production rates for 2007 of about 19.3 TCF, the current recoverable resource estimate provides enough natural gas to supply the US for the next 90 years, although some reports estimate the figure to be closer to 116 years.
$quot;The question about the gas revolution [spreading overseas] is if the gas revolution can be transferred elsewhere. The challenges are daunting, but not insurmountable,$quot; CWC Senior Associate Alirio Parra has said.
$quot;If the recipe in North America can be replicated, shale gas can have a tremendous impact worldwide,$quot; International Gas Association President Abdul Rahim Hashim said.
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