The supply of natural gas is more adequate than the supply of oil at this time. However, as the demand for natural gas, the "clean" fossil fuel, increases, its use will continue to grow and, eventually, there could be a "Peak Natural Gas" similar to Peak Oil (now approaching).
The role of LNG (liquefied natural gas) in supplying natural gas is discussed.
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 U.S., the natural gas supply situation is much better than the world supply of oil. 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 natural gas reserves. However, in the last few years, massive reservoirs of natural gas have been discovered in U.S. shale formations. Better still, the technology for recovering the natural gas from the shale formations has advanced rapidly and the shale formation natural gas is now literally flooding the market.
b. U.S. natural gas production peaked 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 discovery of the shale formation natural gas changed all that, at least temporarily and, hopefully, for many years For the past two years, we have been producing natural gas about as fast as it is consumed and the trend appears steeply upward. So much so that I have recommended that the U.S. commence a program of exporting excess natural gas to gas-poor countries like Japan. It would certainly help with our balance-of-trade problems. It would also help with the approaching Peak Oil problem although Peak Oil may also be delayed in occurring because of the recession and the development of technology to recover oil from shale formations, e.g. Bakken. (Yes, shale formations have also been discovered to have lots of oil and the same new technology that is allowing production of natural gas from shale works with oil-bearing shale formations as well.)
c. Natural gas demand in the U.S. will rise over 50% in the next two decades. If the Boone 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 and may eventually play a big role in producing and shipping LNG to the U.S.
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 his former position as the country with the largest gas reserves. What a difference a few years and new technology make!
Although, Qatar's official 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 natural gas. An incredibly large deposit of natural gas! Qatar could become the "giant" in natural gas production.
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 presently drilled in the U.S. are for natural gas, not oil. Still, new natural gas reserves found lag the amount needed. Let's face it - the U.S. is about drilled out! We have no choice but to import natural gas.
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. And still, they are having difficulty keeping up with natural gas demand.
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.
Hurricanes Katrina and Rita. 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 $5 as Gulf of Mexico natural gas facilities continue to 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.
There is an enormous amount of effort underway in the U.S. at this time regarding LNG.
For more detailed information, please 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 LNG. It and GTL (see below) are our best chances to beat Peak Oil and the energy crisis (short term only - in a decade or so, we will also reach Peak natural gas.)
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 invade Iraq and lose four thousand soldiers dead while 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. It is going to sell well in Europe where gasoline is being rapidly abandoned in favor of diesel. (The U.S. is lagging the developed world in diesel use.)
Meantime, Iraq's oil production is no higher than when we invaded.
Was this administration clever or what?
The only problem with GTL is time. Like LNG, GTL will take years of development before it can make a meaningful impact.
Eventually, I think LNG and GTL will help us combat the ill effects of Peak Oil. If the arrival of Peak Oil can only be delayed long enough. If............
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.
While not strictly a "deep gas" well as defined by Gold, I see where the Blackbeard well in the Gulf of Mexico is down to over 30,000 feet and may go as deep as 38,000 feet.
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 regular mail or 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 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 methane could be released. Methane is a powerful greenhouse has and could increase the global warming threat. Maybe we should mine these hydrate deposits to delay global warming as well as obtaining a natural gas supply.
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 and an increasing demand. Natural gas supply was, like oil, considered limited until the recent development of the shale formation natural gas.
Last Updated: 03/10/10
e-mail me @ vanc13@cox.net