Wiriting in the Wall Street Journal Amy Myers Jaffe of the James A. Baker III Institute for Public Policy at Rice University says technological advances that ease the extract of the huge quantities of natural gas in shale rock are a game changer that will make natural gas cheap and plentiful for decades to come.
Over the past decade, a wave of drilling around the world has uncovered giant supplies of natural gas in shale rock. By some estimates, there's 1,000 trillion cubic feet recoverable in North America alone—enough to supply the nation's natural-gas needs for the next 45 years. Europe may have nearly 200 trillion cubic feet of its own.
We've always known the potential of shale; we just didn't have the technology to get to it at a low enough cost. Now new techniques have driven down the price tag—and set the stage for shale gas to become what will be the game-changing resource of the decade.
I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy.
Sounds really exciting, right? If you click thru and read the full article you'll see she raises nary a doubt about the prospects for shale gas - let alone raises concerns about CO2 emissions from burning it if it can all be extracted as easily as she claims. Ms. Jaffe argues the conventional wisdom on shale gas. But that conventional wisdom has some doubters.
The reality, he argues, is that shale gas deposits are a tiny part of the North American production pool – and they are already depleting fast.
Mr. Groppe says that while the average depletion rate in conventional gas wells is about 25 per cent (in other words, if you didn't drill at all for new wells, production would decline by a quarter each year), shale gas shows even more rapid depletion – output tumbles, on average, 45 per cent in the first year for shale wells.
Depletion rates determine how long each well will produce natural gas that can pay off the cost of the well. Slow depletion rates (i.e. slow rates of decline in output) mean lower total cost per 1000 cubic feet or million BTUs. The sunny view of shale rock natural gas depends on the slow rates of depletion.
I was surprised (and not happy) to learn that Groppe's taking a position similar to that staked out by geologist Arthur Berman who also says the shale gas wells deplete rapidly. Natural gas industry pressure over his writing got Berman fired from the magazine Oil World. You can find rebuttals to Berman's argument on the web. Berman's response? Facts are stubborn things. You can read more about the controversy here.
With Peak Oil approaching our economic future is riding on the cost of substitutes. Natural gas could substitute for some current uses of oil directly and also indirectly by powering electric power plants to generate electricity for electric cars and electrified rail. Future prices of natural gas depend heavily on natural gas shale depletion rates.
| Share | | Randall Parker, 2010 May 11 12:13 AM Energy Fossil Fuels |
The burning of the dead, to keep the living warm, sounds like your lots definition of hell doesnt it?
Beware conflicts of interest in deriving NG shale depletion rates.
NG is a much better used as a chemical feedstock than burned unless we really _do_ have NG "to burn" which, even if there is "enough to supply the nation's natural-gas needs for the next 45 years", we _don't_.
This argument applies to a lot of non-renewable resources. What is necessary is a tax policy that creates an incentive for long-term with-holding of exploitation of non-renewable natural resources:
Shift the tax base from economic activity (sales, value added, income, capital gains, etc.) to instead tax net liquidation value of assets at the risk free interest rate, with a standard individual exemption equal to one-half of the sum of the median capitalization of a job plus the median price of a home (end any penalty for unified households). This will tend to put non-renewable resources into the banking system as the backing for individual savings accounts.
parker, ngas inventories are still easily over the 5 year avg.,
http://americanoilman.homestead.com/GasStorage.html
Groppe's inventory and price predictions are not necessarily condemning overall quality of shale gas formations, but on short term drilling activity most likely.
http://intelligencepress.com/features/bakerhughes/
Shale gas is drawing more interest from large producers into US domestic land-based properties than has been seen for many years.
Technology moves at an exponential but incremental pace. Shale gas is just the latest jump. There will be many others. The next one will be somewhere else in the energy industry. The most certain thing is that new sources of energy will appear from unpredictable places and the overall availability of energy will go up and up.
Those interested in the process of drilling conventional and shale gas wells might be interested in the program "License to Drill". This has been shown on the Discovery channel in Canada, and may eventually show up on Discovery USA. Each of the 6 episodes follows two drilling rigs, one looking for conventional gas in the MacKenzie delta in the Canadian high arctic, and one in northern British Columbia drilling for shale gas. The shale gas rig gets stalled for quite some time when they have technical difficulties with directional drilling, which is needed to make a near vertical well turn horizontally to intersect a band of gas bearing shale. Particularly interesting is an episode in which the shale gas well is completed, the drill rig moved away, and a frac crew from a specialist company arrives to fracture the shale with high pressure water, mixed with sand to prop the fractures open. This isn't a small operation - it involves perhaps a couple of dozen trucks each with a huge diesel driven high pressure pumps, a network of ponds and tanks, and a sphagetti tangle of high pressure lines converging on the well head.
There's evidence from some shale gas fields that at least some of the gas is biogenic, produced by anaerobic bacterial processing of organic matter in the shale. This processing is inhibited at high salinity. If we can fracture shale, introduce microorganisms and water with low salinity, shale gas could become a kind of renewable resource (until the kerogen in the shale is depleted).
That's emphatically not a renewable resource, but it is a way to get a lot more fuel (and carbon) out of deposits which have little or no recoverable fuel as they are.
decline rates of texas gas wells, looks like a high decline rate isn't anything new, yuk yuk, "Mr. Groppe says that while the average depletion rate in conventional gas wells is about 25 per cent (in other words, if you didn't drill at all for new wells, production would decline by a quarter each year), shale gas shows even more rapid depletion – output tumbles, on average, 45 per cent in the first year for shale wells."
first year decline rates here are higher than the groppe standard since the mid nineties
So the EROEI of gas wells has been dropping? It looks like there was a sag in the production rates around 1990 but the decline rates have increased again along with them.
I think DD&A and G&A costs combined of all exploration and production outfits's are now easily above $3, not all that great for profits if gas drops below $4.
Ld Elon said at May 11, 2010 12:48 AM:The burning of the dead, to keep the living warm, sounds like your lots definition of hell doesnt it?