In 2009, natural gas prices plunged to below $4 per MMBtu where many "Experts" are saying that prices will remain low for decades as a result of technology break-throughs allowing for sizable increases in natural gas supply for North America. The Energy Information Agency (EIA) just released data projections reflecting this potential increased supply in natural gas.
In looking at the below EIA data projections, a couple of things stood out which are not usually discussed. Unproven "potential resources" and �reserves� are not interchangeable terms.
Reserves are quantities known with relative certainty that can be recovered or are directly indicated by wells that have already been drilled. They are a small subset of the total resource base. In the below chart, natural gas reserves are represented by the dark blue portion at the base of each bar. And the growth in the total potential resource base in the last few years is particularly notable. Activity and new technology directly led to the growth of the resource estimate, mostly in the shales.
The technology advancement providing for the significant increase in natural gas supply is called hydraulic fracturing. The New York Times and Business Week have current articles discussing this technology and associated environmental concerns of water use and pollution.
In developing biomass energy projects (e.g., biomass gasification to directly displace natural gas for commercial thermal drying) we often now hear the question "Why should we develop biomass energy projects when the price of natural gas is so low?"
While we do not have a "crystal ball" of the future, one should keep an eye on how the topic of water use/quality and hydraulic fracturing in natural gas field development plays out in the coming years -- as this may become a major issue in realizing future supply resources of natural gas (and thus price).
0 comments:
Post a Comment