Shale gas resources in the U.S. are abundant and contribute to record natural gas production
In a recent New York Times article entitled, “Insiders Sound an Alarm Amid a Natural Gas Rush”, the publication asserts that shale gas developments across the nation are to be compared to an Enron-like ponzi scheme. Among other claims, the story suggests that energy companies have overestimated shale gas reserve quantities and that the costs of drilling shale gas wells are uneconomical.
For starters, it is a simple fact that shale gas resources in the U.S. are real and abundant. Recent estimates show that the U.S. holds nearly 1,000 trillion cubic feet of recoverable natural gas in its shale gas deposits. In fact, the federal government’s own Energy Information Agency attests to these reserve numbers and agrees that they will play a significant role in our nation’s energy portfolio. Currently, the U.S. produces nearly 30 trillion cubic feet of natural gas per year from offshore and onshore resources. That is the most annual natural gas production in U.S. history and shale gas has played a large part in that increased production.
It is also a fact that shale gas wells are becoming less profitable and taking longer periods of time to payout due to sluggish natural gas prices. But, the declining price and economics are a result of substantial supply increases of natural gas that these shale developments have produced.
The New York Times reporter points to a decrease in production in the Barnett Shale region. However, production and rig activity reports do not seem to support this claim. Today, the Barnett Shale produces 5.6 billion cubic feet of gas per day. Two years ago, the Barnett was producing 5.3 billion cubic feet per day. With over half of the rigs that were in operation a year ago now gone, the statement that production is declining is simply not true.
The assertion that the Haynesville Shale has not lived up to its expectations is a bold and outlandish statement. Since its development began in 2008, the Haynesville Shale has resulted in the injection of over $22 billion into the local and state economy in Louisiana, just in fiscal years 2008 & 2009 alone. In fact, while other states have lost jobs and revenue, the Haynesville Shale development has shielded our state from the economic recession.
As has been the case since the first shale gas well was drilled, advancements in natural gas drilling technology will continue to drive down the costs associated with developing these reservoirs. Companies are finding new and innovative ways to positively impact their bottom line, while also drilling more safely and efficiently. Some of these measures include utilizing drilling rigs that run on natural gas and advancements in the hydraulic fracturing and drilling process.
The article also makes claim that the hydraulic fracturing process is a threat to the environment. Contrary to the reporter’s claims, hydraulic fracturing is essential to the development and production of shale gas resources. The process is well-regulated by the states and conducted safely, with a proven track record. The oil and natural gas produced thanks to this technology helps fuel our nation’s economy by providing jobs, and the energy needed to heat our homes, fill-up our cars, generate electricity and create the basic materials for such things as fertilizer and plastics of every variety.
Hydraulic fracturing is an environmentally responsible way to make the most of our American energy resources. Without it, wells that would have run dry years ago, or would never have been drilled at all, are made viable. Experts believe 60 to 80 percent of all wells drilled in the United States in the next ten years will require fracturing to remain profitable and operating.
It is fair to say that the New York Times missed the mark with this story. With a country as energy dependent as the United States, it is imperative that we are producing our own energy sources to ensure the continuation of our American way of life. Our abundant natural gas resources, produced in areas such as the Haynesville Shale, help us to do just that for generations to come.
Don Briggs is president of the Louisiana Oil and Gas Association.