Tuesday, December 08, 2009

Horizontal Drilling Expands Natural Gas Reserves

Using a relatively new new technique, oil engineers and geologist are now able to drill horizontally to extract natural gas from shale.

The technique has been used across Texas, Oklahoma, Louisiana and Pennsylvania for the past decade, resulting in a 40 percent increase in U.S. natural gas supplies in recent years.

The increased production has created a glut of the gas in the U.S., helping to drive down gas prices and utility costs.

Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, calls the new method of producing gas “is the biggest energy innovation of the decade.”

Natural gas produces fewer emissions of greenhouse gases than either oil or coal, making it a favorable alternative.

Now Europe is seeking to expand in its reserves of the cleanest fossil fuel. The hope is that the continent can reduce its dependence on Russian natural gas.

Initial estimates of recoverable shale gas in Europe range up to 400 trillion cubic feet. Though that is less than half the industry’s estimates of what is recoverable in the United States, it could eventually drive down prices, which are sometimes twice as high as those in the U.S.

By some estimates, the horizontal drilling technique could result in at least a 20 percent increase in the world’s known reserves of natural gas.

One recent study by the Cambridge consulting group, calculated that the recoverable shale gas outside of North America could turn out to be equivalent to 211 years’ worth of natural gas consumption in the United States at the present level of demand, and maybe as much as 690 years.

The low figure would represent a 50 percent increase in the world’s known gas reserves, and the high figure, a 160 percent increase.

If the U.S. can convert more of its transportation fleets to use natural gas rather than gasoline, it would increase energy independence and security, as well as reducing costs and carbon emissions.

On a global scale, those benefits would obviously be greatly magnified.

Amidst all the dire peak oil news, this at least provides us with some semblance of hope.

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