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Page added on May 10, 2013
No “Peak Natural Gas” Anytime Soon
One does not hear much these days about “peak oil”, as new technologies are developed and implemented that, together with market conditions, make feasible the exploitation of previously uneconomical or irretrievable deposits. A new report by the Diplomatic Center for Strategic Studies (DCSS), based in Kuwait, just published, confirms an International Energy Agency report from two years ago, estimating that under present rates of consumption, global supplies of natural gas could last up to 250 years, until the middle of the twenty-third century.
The figure is slightly speculative, as it refers to “potential” reserves, such as Chinese shale gas that may or may not be actually recoverable. But it leaves no doubt that the American success with unconventional gas is not just a national but a global game-changer. The DCSS report adds the interesting nuance that natural gas is fairly evenly distributed around the world, and all regions have recoverable resources in sufficient quantity to last at least 75 years, i.e. until the last decade of the present century.
At the same time, development of shale gas outside North America will go much slower than it has gone in the U.S. and Canada. The Americans and Canadians were able to mobilize large amounts of capital in a relatively short span of time and already had a significant cadre of highly technically trained personal, not to mention the industrial base and process technology necessary for manufacturing the large amounts of sophisticated equipment necessary.
The geophysical aspects also vary widely. In Poland, for example, which has been estimated to have large amounts of shale gas, it turns out that this is not so easily recoverable because the rock is deeper and there are more complicated geological formations through which it is necessary drill to get to it. So the handwriting was on the wall for the separate decisions by Canada’s Talisman Energy and the U.S.-based Marathon Oil this week to sell their interests in shale gas ventures in Poland. China has this problem too, in addition to which water for hydraulic fracturing (fracking) is in short supply in the remote regions where the rock is to be found.
Natural gas, along with oil and coal, will continue to make up about 80% of world consumption. A recent BP report interestingly shows that the three hydrocarbons have been converging such that each of them now represents just about one-third of that 80%. The remaining 20% is equally divided among solar, wind, and “other” alternative energy sources. Although there is a tendency these days to refer to natural gas no long as “clean fuel” but as “cleaner fuel”, it is unlikely that political and economic momentum in its favor will abate anytime soon either. But economic and geophysical conditions strongly favor North America in the shale gas revolution.
By. Robert M. Cutler
11 Comments on "No “Peak Natural Gas” Anytime Soon"
rollin on Fri, 10th May 2013 12:08 pm
I give land based nat gas eight to ten years before a long downhill ride. This may be countered by methane hydrate development, but that will be expensive.
Arthur on Fri, 10th May 2013 12:38 pm
There is not going to be a real carbon fuel shortage any time soon, not before 2030. True, fossil fuel is going to remain expensive and slowly will get more expensive, economic growth is over for ever but a collapse is going to be avoided due to ever larger efficiency, demand destruction like less car miles in smaller cars and rapid introduction of renewable energy. And then there is the methane hydrates/fracking wild cards. There is no doubt that there are trillions of barrels of oil in the ground and maybe technologies are going to be developed for their exploitation (mind you, I am NOT advocating this for environmental reasons!). It is not going to be a rough decline, at least not in the West. Financial collapse, civil unrest and war are more likely disasters waiting to happen.
BillT on Fri, 10th May 2013 2:09 pm
Collapse is more likely going to happen to the world economy. We may not run out of gas or oil. We just won’t be able to afford it. That is, IF there is not a world war that stops everything permanently before that happens. Usually, the last gasp of an empire is a huge war. We are overdue.
shortonoil on Fri, 10th May 2013 2:33 pm
“How fast is question.”
Since various crude have different chemical compositions it is necessary to define which crude to answer the question “How fast”. It has been conventional crude (API 30 – 45) that has for the last century provided the bulk of the energy used to power the world’s transportation machinery. Lighter crude (API > 45) have lower per unit energy densities, heavier crude (API < 30) require more energy to process. Conventional crude provides the "energy window" that is needed to drive the world's economies.
From a volumetric perspective, conventional crude production is now falling at about 1% per year. From an energy point of view (which is the critical metric) and primarily because of increasing well depth and increasing water cut that quantity is falling at 2.6% per year. Both of this quantities are accelerating. By 2025 the energy metric will be declining at 25.5% per year.
As economic conditions are dominated by trade, and trade by transportation we can expect a significant decline in the world's economic activity over the next decade.
Plantagenet on Fri, 10th May 2013 5:10 pm
Obama said NG would last 100 years—this new study says 250 years. Either way, we’ve got a lot more NG then the “peak NG” folks have been claiming.
GregT on Fri, 10th May 2013 5:18 pm
“Financial collapse, civil unrest and war are more likely disasters waiting to happen.”
Correct, and all three will be the result of a decline in EROEI of fossil fuel production. It has already started and will continue to get worse, until a tipping point is reached. The point at which modern industrial society and our monetary systems can no longer function. The point of collapse, and that point is not far away.
keith on Fri, 10th May 2013 6:54 pm
Every things fine, invest in fossil fuels. Please! We need your money!
James A. Hellams on Fri, 10th May 2013 8:17 pm
In all the hype about natural gas being so abundant to last 250 years, I suggest you go below that hype and look at what it really is.
First, GregT is absolutely right. EROEI is not even mentioned in this report.
Secondly, and also important, is that nothing is mentioned about the equivalency of the natural gas in terms of oil.
Natural gas is a very poor substitute for oil. One gallon of gasoline contains a minimum of 100,000 BTUs of energy. One cubic foot of natural gas contains 1,000 BTUs of energy. For every gallon of gasoline, you would need 100 minimum cubic feet of natural gas.
When you read all the hype about natural gas being the savior of our addiction to oil; I suggest you divide the total number of cubic feet of natural gas by 100,000, minimum, to get the number of gallons of oil equivalent. Next, divide that number by 42; and you will get the total number of barrels of oil equivalent. After you have done this, divide that by the number of billions of barrels of oil consumed annually worldwide. After you have done these calculations; you will have completely discredited all the hype about natural gas rescuing us from our addiction to oil!
James A. Hellams on Fri, 10th May 2013 8:37 pm
As a follow up to my comment, I did not even mention the additional BTUS per gallon consumed by aviation, trucking, and railroads. When you add in these consumptions; the natural gas supply will dwindle even faster!
LT on Fri, 10th May 2013 11:12 pm
I agree with Mr.James A. Hellams’s analysis!
Harquebus on Sat, 11th May 2013 12:42 am
The increased costs of extracting energy feed back.