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Page added on May 24, 2014
EIA Seriously Exaggerates Shale Gas Production in Drilling Productivity Report
“Natural gas output from US’ Marcellus edges closer to 15 Bcf/d: EIA” declared the headline in Platts that attracted my attention, since the latest data on the Marcellus shale gas play of PA and WV indicated production was less than 12 bcf/d. This headline was based on the latest issue of the EIA’s new monthly Drilling Productivity Report published April 14. Reading further the article claimed that the Haynesville shale play “peaked at about 10 Bcf/d in 2012”, when in fact it had peaked at closer to 7 bcf/d in 2011. These errors are serious exaggerations of reality and bear further investigation, as the EIA Drilling Productivity Report is widely read and quoted in the media.
Fortunately the EIA also publishes independent production data by shale play in itsNatural Gas Weekly Update. A check of production data for the Marcellus revealed that it was at 11.8 bcf/d in February and that the Haynesville had indeed peaked at 7.2 bcf/d in November 2011. These figures are also corroborated by Drillinginfo, a commercial database which is used by the EIA.
There are four shale plays in common between the two EIA reports – the Marcellus, Haynesville, Bakken and Eagle Ford. The actual shale gas production from them, as provided in the EIA weekly update and confirmed by Drillinginfo, is illustrated in Figure 1.
Figure 1 – Actual shale gas production from four plays from 2007 through February 2014 (data here).
The production for the same plays over this period from the EIA Drilling Productivity Report is illustrated in Figure 2. This amounts to revisionist history as these plays produced essentially nothing in 2007 yet are listed as producing nearly 7 bcf/d then by the EIA.
Figure 2 – Shale gas production from the four plays in Figure 1 as reported by the EIA Drilling Productivity report (data here).
The aggregate error in reporting production from these four shale plays is illustrated in Figure 3. Production in February, 2014, is stated to be more than 7.8 bcf/d higher in the EIA Drilling Productivity Report than it actually is – an error of 38 percent on the upside, equivalent to more than 10 percent of the total gas production of the U.S.
Figure 3 – Overestimation of shale gas production in the EIA Drilling Productivity Report compared to actual production for the plays and time period illustrated in figures 1 and 2.
Real production data usually lags two months behind, and the most recent months are subject to revisions. Yet the EIA’s Drilling Productivity Report confidently reports production for the current and following month to the nearest mcf (or barrel, for oil), along with aggregate depletion. Given the errors illustrated above, this is a gross distortion of the facts—and always on the upside.
Furthermore, the EIA’s decision to start putting out a report highlighting production per rig, rather than production per well, implies that rigs, not wells, are what is important. But the physical footprint on the environment is wells, not rigs, and wells determine the capital input required, plus the actual flows to markets. Presumably, given the efficiency improvements of pad drilling and other innovations allowing a rig to drill more wells per unit of time, the growth statistics per rig would make shale look ever rosier. And inflating the actual production numbers would make shale look rosier still.
The EIA is the elephant in the room when it comes to energy statistics. Its data and forecasts are widely used by analysts and the media and influence energy policy. There is no room for the significant scale of errors and distortions reported herein.
David Hughes is a geologist and veteran of 32 years with the Geological Survey of Canada, where he conducted and managed research projects on coal, unconventional gas and big picture energy issues. He is president of Global Sustainability Research Inc., a consultancy dedicated to research on energy sustainability issues, and is a Fellow of the Post Carbon Institute. His work has been covered widely in the popular press and other media.
12 Comments on "EIA Seriously Exaggerates Shale Gas Production in Drilling Productivity Report"
Plantagenet on Sat, 24th May 2014 7:26 pm
The obama administration has proven themselves to be utterly incompetent. From letting Vets die at the VA hospitals, to bailing out insurance companies who didn’t make their Obamacare numbers, to cooking the BLS unemployment numbers by not counting “discouraged” workers, to overestimating US NG production, its best to be careful when looking at any kind of US government data these days.
Ron Patterson on Sat, 24th May 2014 9:43 pm
Plantagenet, you remind me of the local politicians here in Alabama. Even the local road commissioner is running against Obama. “Help fight Obama” is what every they are all saying in their ads.
The EIA is run by career employees who played the same game under Bush. Obama has nothing with their fudging the data. And I know you know that, just like the local candidate for road commissioner knows Obama is not responsible for the potholes. But they never miss a chance to blame Obama for anything they can.
Norm on Sat, 24th May 2014 9:50 pm
stop picking on plantagenet. he got as much right to be here as you. i don’t see much problem with what he says. yeah the obama administration is just another ‘kick the can’ type of government without any real plan for the future. they aren’t leadership, no more than captain schettino is leadership. BUT the republi-con’s would have been even worse.
northwestresident on Sat, 24th May 2014 10:26 pm
Plantagenet is a compulsive Obama blamer. It is an illness that he just can’t get over. Plantagenet is obsessed with Obama, just like so many other old white men in this country who find that blaming Obama for anything and everything is a panacea for all the emotional issues and frustrations with life that plague them. Sad, but true.
GregT on Sat, 24th May 2014 10:38 pm
Plant does have every right to be here, and I haven’t heard anyone say anything to the contrary
That does not mean that the rest of us don’t have the right to point out how ridiculous his fixation is on the POTUS, and how completely wrong he is on his views that Obama is in control of everything that Plant believes is wrong in the world.
Norm on Sun, 25th May 2014 3:10 am
It is a fine line to understanding that Obama is a severe disappointment, versus thinking that Obama masterminds the current situation. From external viewpoint its hard to see the difference. I have met plenty of dumb trailer trash hicks who collect guns, smoke cigarettes, drink beer, listen to Rush Limbaugh and hate Obama. They all live on welfare, union disability, and food stamps, but think they want to ‘live free’ under Mitt Romney….. who would not only take away their last $50 but would turn them into canned dog food by the end of his inaugural week. What a joke they don’t even know how they fit into this end-times political game. Its very typical to see Obama haters who listen to Rush Limbaugh but live off welfare and vote Republican. From seeing such demented deranged people, i come up with my excellent acronym, ‘Teabaggers On Welfare In Trailers’ or ‘TOW IT’. Surely plantagenet is not one of those?
Ron Patterson on Sun, 25th May 2014 8:35 am
The main problem is the fact that his Obama rant deflected attention away from the importance of this story.
Why did the EIA choose to inflate shale gas production? What do they, or anyone else, gain from this charade?
Oh, one more thing. They may all be republicans, rolling in the floor with laughter that someone is blaming Obama for it.
Cloud9 on Sun, 25th May 2014 8:52 am
The industry knows it needs investors. Talking up decline is counter productive.
Juan Pueblo on Sun, 25th May 2014 10:59 am
I hardly ever comment, but I read the articles and, particularly, the comments on this site on a daily basis.
As much as I dislike Obama, I have to admit that Plant’s Obama bashing is boring, tiresome, and out of subject; and I’d be glad it if it ended. It doesn’t add anything good to the conversation.
northwestresident on Sun, 25th May 2014 11:09 am
Juan Pueblo — That IS the main point. There are political discussion websites that would welcome Plantagenet and his anti-Obama quips and accusations with open arms. Why does Plantagenet come to a peak-oil related website to try to stir up anti-Obama political discussion? Is he trying to annoy and distract other visitors to this site, or is he unaware of how inappropriate his political-oriented posts are here? Probably a little of both.
oilystuff on Sun, 25th May 2014 11:25 am
Regardless of whether the data the EIA provides the American public is intentional deception or simply gross inefficiency, it is the wrong data and a disservice to Americans who need to know the truth about America’s energy future.
As an employer if my folks are screwing up it is a reflection on me and I stand up to it, take responsibility, and fix it. ASAP, not months down the road. For anyone who thinks that’s the leadership mantra of this current administration, I can’t help you. I recall being told by Mr. Obama that we had over 100 years of gas reserves in America. My guess is that he is getting his poop from the EIA?
This EIA reporting discrepancy is a bad deal. People who look to bigger government for all the correct data, the truth, all the answers to everything should be very disappointed in this story. If you need somebody to blame, and don’t want to blame the front office, who do you blame? More importantly, how do you fix it? How do we make plans for our energy future when we get lied to all the time by public companies and by the government?
northwestresident on Sun, 25th May 2014 1:46 pm
oilystuff — It is the fat cat financial elite behind the scenes that are running the show. Blame them. They own and control the public companies just as they own and control the politicians on both sides. Obama claiming that America has 100 years of gas reserves, and Motley Fool claiming that America “could” become energy independent, and Forbes trumpeting the limitless earnings potential in shale oil investments, etc… are ALL being driven and directed by forces much greater than the POTUS or by any one politician.