Natural gas in North America is on a roll. In the US, production stood at 48 billion ft3/d in 2007; in July 2013, the Energy Information Administration (EIA) reported that total wet gas production for the lower 48 states had exceeded 74 billion ft3/d.
The phenomenal growth can be attributed to two technological innovations: horizontal drilling, which immensely increases the wellbore’s exposure to a reservoir; and hydraulic fracturing, which shatters the reservoir in order to allow large volumes of hydrocarbons to escape.
In the mid 20th Century, operators began to unlock the gas rich but impermeable Barnett Shale in Texas, which now produces approximately 5 billion ft3/d. Other shale formations, including the Utica, Marcellus and LaFayette have since been tapped, and the EIA says shale gas now accounts for 40% of US production.
In Canada, shale formations in Northeast British Columbia and Northwest Alberta hold several hundred trillion ft3 in place; Calgary-based Encana and other producers are busily drilling up reserves. A recent study by the Alberta Geological Survey reports that shale formations in the central part of the province could contain over 3300 trillion ft3 of gas and over 420 billion barrels of oil.
The glut of gas has driven down prices, creating demand in many different sectors.
Growth in shale developments means new pipe needed
All of the growth in new supplies and customers has meant the need for new pipe. In Ohio, DTE Energy, Enbridge Inc., and Spectra Energy Corp. are developing the NEXUS gas transmission project that would move up to 1 billion ft3/d of Utica shale gas to consumers in the US Midwest and Ontario.
Elba Express Co. LLC and Southern Natural Gas Co. are expanding their gas gathering and transportation systems in the South US by as much as 1 billion ft3/d in order to serve the Elba Island LNG terminal in Georgia.
EnCana’s Kitimat LNG project will be supplied by the Pacific Trail Pipeline, a proposed, 36 in. dia. pipe stretching 463 km from Northeast British Columbia.
Enterprise Products Partners is expanding its Aegis pipeline system in Texas and Louisiana to gather and deliver up to 425 000 bpd of pure ethane to customers along its 270 mile length.
In all, the Interstate Natural Gas Association of America (INGAA) predicts tens of billions of dollars’ worth of investment in the next several years.
Rest of the world
How can the rest of the world benefit from the shale gas revolution? Recently, the EIA examined 137 shale basins around the world and concluded that there were almost 8000 trillion ft3 of technically recoverable natural gas in regions outside North America; China, Argentina, Algeria and Mexico accounted for almost half of these resources.
However, the experience in North America may not necessarily play out on respective pipeline sectors elsewhere due to different circumstances, including the extent and location of resources, regulatory frameworks, environmental concerns, public opposition to fracking and existing energy infrastructure.
Countries in the European Union
Countries in the European Union possess significant shale gas resources. The UK’s Office of Gas and Electricity Markets (Ofgem) estimated European shale gas resources at around 1250 trillion ft3 in place, much of it in Poland, France and the UK. In the UK, Cuadrilla Resources estimates 200 trillion ft3 of natural gas in place at its exploration license area in the Bowland basin shale.
The development of shale gas in the EU faces significant hurdles. France has issued an outright ban, and President Francois Hollande is adamantly opposed to discussing the issue further.
Initial well output in Poland has been disappointing, and several companies have cut back on exploration plans.
Protesters in the UK have impeded efforts by exploration companies to drill wells. The influx of cheaper coal from the US and policies favouring renewables have undercut gas utilities to the point where facilities are being mothballed. The Nord Stream pipeline system running from Russia to Germany beneath the Baltic Sea is delivering large new volumes to the region.
Still, the benefits that have accrued to the US and Canada are motivating some jurisdictions to promote shale gas development. The UK government is dangling tax breaks to encourage shale gas exploration and production in order to meet future utility demand; officials estimate that 26 GW of gas-fired capacity will added to the national grid by 2030.
Ukraine sees shale gas as a means of gaining energy independence from Russia, which has cut off supplies several times over payment disputes. The government signed a US$ 10 billion, 50 year deal with Royal Dutch Shell to explore for shale gas in the country’s eastern regions.
Even if shale gas were to be developed, the EU does not have an integrated pipeline gathering and distribution system similar to North America. Creating such as system would be a multi-billion Euro exercise and involve the co-ordination of not only dozens of regulatory agencies, but reconciling contradictory energy policies in member states.
Read the article online at: https://www.oilfieldtechnology.com/exploration/31122013/global_shift_to-_shale_-part_one/