A “revolution” in natural gas production is underway in the United States, and the “shale gale” is spreading from Louisiana and Arkansas to Pennsylvania and New York, writes Pulitzer Prize winning energy economist Daniel Yergin.
Writing in The Wall Street Journal, Yergin, with collaborator Robert Ineson, indicates the supply impact of this trend has been quite dramatic.
“In the lower 48, states thought to be in decline as a natural gas source, production surged an astonishing 15 percent from the beginning of 2007 to mid-2008. This increase is more than most other countries produce in total,” writes Yergin.
“Yet the natural gas revolution has unfolded with no great fanfare, no grand opening ceremony, no ribbon cutting. It just crept up.
“In 1990, unconventional gas — from shales, coal-bed methane and so-called ‘tight formations’ — was about 10 percent of total U.S. production. Today it is around 40 percent and growing fast, with shale gas by far the biggest part.”
Yergin notes that the potential of this "shale gale" only became clear to policymakers in Washington, D.C. during recent months.
“Yet it is already changing the national energy dialogue and overall energy outlook in the U.S. — and could change the global natural gas balance,” Yergin writes.
“The recent increase in estimated U.S. gas reserves by the Potential Gas Committee, representing both academic and industry experts, is in itself equivalent to more than half of the total proved reserves of Qatar, the new LNG powerhouse.”
Others report an uptick in investment in the natural gas industry. The New York Times indicates that Denbury Resources, a natural gas producer, is buying Encore Acquisition for $4.5 billion.
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