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US poised to use more natural gas

Posted on 22 May 2009

 With the abundant production of shale gas and tremendous investments made in natural gas transportation in recent years, the US is perfectly poised to use natural gas in a greater capacity in the coming years, said Steve Hiatt, VP commercial & industrial sales, Simons Petroleum, at the 2009 IADC Drilling Onshore Conference & Exhibition on 21 May in Houston. For example, natural gas can certainly become a cleaner-burning replacement for coal, which now accounts for nearly half of all US electricity generation.

Mr Hiatt noted that unconventional shales have rapidly become natural gas hotbeds in North America, with drilling contractors following their customers into these shale basins over the past decade. And with much-improved hydraulic fracturing and horizontal drilling technologies, the industry has been able to economically produce these reserves at mass volumes.

 With the abundant production of shale gas and tremendous investments made in natural gas transportation in recent years, the US is perfectly poised to use natural gas in a greater capacity in the coming years, said Steve Hiatt, VP commercial & industrial sales, Simons Petroleum, at the 2009 IADC Drilling Onshore Conference & Exhibition on 21 May in Houston. For example, natural gas can certainly become a cleaner-burning replacement for coal, which now accounts for nearly half of all US electricity generation.

Mr Hiatt noted that unconventional shales have rapidly become natural gas hotbeds in North America, with drilling contractors following their customers into these shale basins over the past decade. And with much-improved hydraulic fracturing and horizontal drilling technologies, the industry has been able to economically produce these reserves at mass volumes.

 In fact, over the last decade, production from unconventionals has increased by approximately 65%. As a percentage of total US production, unconventionals have gone from 28% in 1998 to 46% by 2007. Moreover, operators expect that number to exceed 50% by the end of 2009, Mr Hiatt said.

Looking at land rig count stats, he said that there are approximately 918 currently active rigs in the US, compared with 1,912 last year. That’s a drastic 52% decline, and some of the largest activity decreases have taken place in Texas, the Rockies and the Mid-Continent.

On the plus side, Mr Hiatt noted that shale gas wells have dramatic decline production rates, and that means extensive and ongoing drilling and completions will be required.

Another positive is that, despite low natural gas prices, operators have remained relatively active in unconventional gas shale basins like the Haynesville, Fayetteville and Woodford shales. The exception has been the Barnett Shale, which has seen a steep 52% decline in activity year-on-year.

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