The supply of natural gas, is more plentiful than oil at this time. As the demand for natural gas, increases, its use will continue to grow.
The role of shale formations in supplying natural gas is discussed. Also discussed is the potential role of US LNG exports in supplying natural gas to gas-poor countries.
Only a year ago or so, A leading Canadian newspaper wrote, "Forget oil! Natural Gas is the True Energy Crisis!" Do we still need to listen to the Canadians in view of all the natural gas we are now extracting from the shale formations?
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Fortunately for the US, the natural gas supply situation is much better than the oil supply situation. Consider the following:
a. The US has only 3 % of the world's known natural gas reserves. The big three are Russia, Iran, and Qatar which, together, contain over 50 % of the world's conventional natural gas reserves. However, in the last few years, massive quantities of natural gas has been discovered in US shale formations. Better still, the technology for recovering the unconventional natural gas from the shale formations has advanced rapidly and the shale natural gas is now literally flooding the natural gas market.
b. US natural gas production peaked, temporarily, in 1972 and beginning in 1998, replacement of natural gas used in the U.S. was well below 100%. We were using gas faster than we were producing it. We were living off accumulated natural gas reserves, natural gas imports from Canada and Mexico, and a small amount of natural gas obtained from LNG imports. The development of shale formation natural gas changed the supply situation. For the past two years, we have been producing natural gas about as fast as it is consumed and the supply trend appears steeply upward---So much so that it is being recommended that the US commence a program of exporting excess natural gas to gas-poor countries like Japan and Korea. It would certainly help with our balance-of-trade problems!
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c. Natural gas demand in the US will rise over 50% in the next two decades. If the Pickens Plan is implemented, that % may actually increase. The Pickens Plan calls for heavy use of natural gas as a bridge fuel while alternative energy sources, e.g. wind power, are being developed.
The natural gas reserves of the world are distributed similarly, but not identically, to those of oil reserves. Russia has the largest natural gas deposits in the world although some experts feel they have damaged both their oil and natural gas fields with poor production practices. Iran has the second largest deposits of natural gas. Both countries are moving into the LNG export business.
However, the above scenario is rapidly changing due to development of the afore-mentioned shale formation natural gas. The U.S. seems likely to return to its former position as the country with the largest gas reserves. What a difference a few years and new technology make!
Although, Qatar's official conventional natural gas reserves place them in third place behind Russia and Iran, they may be number one. Although a very small country, their offshore North Field gas field could contain as much as 900 trillion cu ft. of conventional natural gas. An incredibly large deposit of natural gas! Qatar could become a "giant" in natural gas production and LNG exports.
You have to wonder how long a small, virtually defenseless, country like Qatar can maintain its independence when the big boys get really desperate for new energy sources.
Mice like Qatar have to beware when the elephants start dancing!
Natural Gas - The Clean Fuel. Of all fossil fuels, natural gas is environmentally cleanest (the "clean" fuel), is reasonably priced, and is a very efficient fuel to use.
The Power Plant Fuel. 95 % of all new power plants being built are to be fueled by natural gas.
Home Heating Fuel. 60 % of American homes are heated by natural gas.
Most New Wells are for Natural Gas. 80 % of all wells recently drilled in the US were for natural gas, not oil. This ratio is, no doubt, changing back toward drilling for oil because of the glut of natural gas being produced from the shale formations.
Many New Gas Wells. In Texas alone, over 6,000 gas wells are drilled each year. In Alberta, Canada, over 7,000 gas wells are drilled annually.
Oil Prices vs. Natural Gas Prices. Over the years, the price of a barrel of oil is more expensive than a thousand cubic feet (MCF) of natural gas by a ratio of about six to one. Both oil prices and natural gas prices are rising rapidly but oil prices are rising more rapidly (present oil to gas price ratio of over 30 - 1.)on a relative basis due to the glut of shale gas.
Hurricane Katrina - Effect on Natural Gas. Natural gas production in the Gulf of Mexico during 2005 and 2006 was greatly reduced due to Hurricanes Katrina and Rita. As a result of the production interpretation, gas supplies for awhile were lower than normal and natural gas prices per 1,000 cubic feet climbed from $6 to over $13. These prices have dropped back to about $2.40 as Gulf of Mexico natural gas facilities have come back on line and new natural gas supplies from the shale formations enter the picture.
A few words on LNG now, and more will follow on another web page.
LNG is natural gas that has been cooled and liquefied. The volume of LNG is 1/600 the volume of an equivalent quantity of natural gas. This liquid natural gas can be shipped in LNG tankers.
For more detailed information, visit LNG - Liquefied Natural Gas. Also, for information on some of the companies working in the LNG field, please visit Oil & Energy Company Stocks.
As the reader can see, I am hot on natural gas and natural gas products (e.g. LNG). It is our best chances to beat Peak Oil and the energy crisis.
The rapid development of GTL in South Africa is very welcome. It is another example of a foreign country eating our lunch in new technology. While we fight a war in Iraq and lose over four thousand soldiers dead seeking to stabilize our Middle East energy sources, Sasol, headquartered in South Africa, jumps in and gets a head start on making this clean, non-explosive, diesel-like fuel from natural gas.
The only problem with GTL is time. Like LNG, GTL will take years of development before it can make a meaningful impact on the energy crisis.
Very Deep Gas (Thomas Gold Gas)
Coal Bed Gas
Garbage Dump Gas
None of the three above alternate sources of natural gas are well developed but all have some potential and we should continue to move ahead with their development. Very deep gas is still somewhat of a dream but the late Thomas Gold thought it was there and, if the genius, Thomas Gold, thought it was there, it very well may be!
In regards to coal bed gas, beware. It may someday become an excellent source of natural gas but the hucksters are on to it. The week doesn't go by that I don't get another flyer in the mail or an e-mail trying to get me to invest in some small coal bed gas company and be rewarded by an increase in the value of the investment by ten-fold in just a few months. Am I missing a good bet or what? Hopefully, the hucksters will be right this time. We need the gas.
Methane (natural gas) obtained from mining ocean bed hydrates is not listed above. The potential supply from this source would be virtually inexhaustible....if it were available. However, so far, no one has been able to develop a technique to economically recover the ocean bed hydrate methane.
An ominous report on tundra hydrates appeared recently. The article said that a huge tundra area in northern Canada was thawing and that huge quantities of gas (methane) could be released. Methane is a powerful greenhouse gas and could increase the global warming threat. Maybe we should mine these hydrate deposits to delay global warming as well as obtaining additional natural gas supplies.
1. Oil & Energy Crisis. Peak Oil may be just around the corner. Alternative energy, anyone?
Natural gas is a clean fuel for which there are increasing uses. Natural gas supply was, like oil, considered limited until the recent development of shale formation natural gas reservoirs.
Last Updated: 02/02/12