AN ENERGY WITH A BRIGHT FUTURE

As the world’s oil resources decline, consumer countries are looking to diversify their energy supply. There are large reserves of natural gas still waiting to be developed and an increasing number of uses to which it can be put.

The gradual decline in natural gas reserves in the OECD countries combined with a growing demand for more environmentally friendly energy and a wide range of key technological breakthroughs have opened up a huge number of transport and hence selling options for natural gas. At the end of the 1990s, industry observers predicted that demand for gas would grow at about 3% per year. The most recent forecasts put growth at about 2% per year through to 2020, compared with an estimated 1.3% for oil. So gas is expected to gain the fastest ground in the overall energy mix.
Over the last ten years, power generation has becoming the driving force behind global growth in gas demand, accounting for half the increase. Some 40% of power generation is fuelled by coal, 25% by gas and 13% by nuclear energy, and power is a very competitive segment. The recent rise in gas prices, triggered by their indexation to oil prices, has undercut further moves to gas while coal prices have remained relatively stable. Nevertheless, gas is expected to overtake coal as the number two primary energy with about 23% of world demand by 2030. Six countries alone account for half of the world’s gas consumption: the United States (23%) and Russia (15%), followed by the United Kingdom, Canada, Germany and Iran with just over 3% each.

The late development of gas exploration points to even more of a question mark over gas reserves remaining to be discovered than remaining oil reserves, especially when it comes to deep gas and non-conventional gases. Observers estimate that between 50 Tm3 and 100 Tm3 could be discovered in the coming years. Offshore zones have significant potential here, especially the deep offshore and the Arctic zones, where gas exploration-production operations have benefited from the technological advances made by oil teams. Certain countries, such as Egypt, are moving ahead very fast in this area.

Non-conventional gas resources include coal-bed methane, tight gas (gas in low-permeability sandstone reservoirs) and shale gas. A lot of work has been done on these in the United States, where non-conventional gas accounts for nearly a third of domestic production. On a world scale, resources of coal-bed methane are estimated at 100 Tm3 to 260 Tm3 . Producing this gas can have a positive environmental impact because recovery can be improved by injecting CO2 into the lower levels, thus also providing a carbon sequestration solution. Yet there are two major obstacles to coal-bed methane production: the “reservoir” characteristics of the coal beds and the huge amounts of produced water to be treated. Tight gas sands is the rather vague term used for sandstone gas reservoirs with very low permeability (less than 0.1 millidarcy). Low permeability means that the gas moves only with great difficulty inside the formation, making production using conventional techniques uneconomical. Tight gas resources have been estimated at about 400 Tm3 . Shale reservoirs also concern low-permeability rock, but the gas is “free” or “stuck” to organic particles (like coal-bed methane). Resources of shale gas are thought to stand at 40 Tm3 .

Half of the development projects in North America over the next ten to twenty years could be aimed at producing these non-conventional gas resources. The United States, which passed its gas production peak not long ago, is the leading player in exploration and production of coal-bed methane, tight gas and shale gas.

Total – Energies, clicking to open another window is required.