įederal price controls on natural gas led to shortages in the 1970s. Horizontal drilling began in the 1930s, and in 1947 a well was first fracked in the U.S. Shale gas was first extracted as a resource in Fredonia, New York, in 1821, in shallow, low-pressure fractures. ĭerrick and platform of drilling gas wells in Marcellus Shale – Pennsylvania But shale-gas discoveries are also opening up substantial new resources of tight oil, also known as "shale oil". Some 2011 studies pointed to high rates of decline of some shale gas wells as an indication that shale gas production may ultimately be much lower than is currently projected. More recent studies have also concluded that life-cycle shale gas GHG emissions are much less than those of coal, among them, studies by Natural Resources Canada (2012), and a consortium formed by the US National Renewable Energy Laboratory with a number of universities (2012). Ī 2013 review by the United Kingdom Department of Energy and Climate Change noted that most studies of the subject have estimated that life-cycle greenhouse gas (GHG) emissions from shale gas are similar to those of conventional natural gas, and are much less than those from coal, usually about half the greenhouse gas emissions of coal the noted exception was a 2011 study by Howarth and others of Cornell University, which concluded that shale GHG emissions were as high as those of coal. China is estimated to have the world's largest shale gas reserves. Shale gas has become an increasingly important source of natural gas in the United States since the start of this century, and interest has spread to potential gas shales in the rest of the world. Since the 1990s a combination of horizontal drilling and hydraulic fracturing has made large volumes of shale gas more economical to produce, and some analysts expect that shale gas will greatly expand worldwide energy supply. Shale gas is natural gas that is found trapped within shale formations. should get used to the likelihood of high double-digit gas prices," said Albert Lin, executive director of Pearl Street Station Finance Lab, which conducts economic analysis related to the energy sector.Total natural gas rig count in the US (including conventional gas drilling) gas prices increasingly are set by global demand - not domestic consumption, say experts. The growth will require more pipelines to avoid transportation constraints, he said.Īnother change: U.S. "They are making a lot of money at these prices," he said, referring to natural gas producers. "Natural gas is far, far from a waste product," said Joel Moxley, chief executive at GPA Midstream Association, whose members are seeing a boost from higher volumes on their gathering and processing systems. This week, Cheniere Energy disclosed plans to expand its Corpus Christi LNG plant, a move that will take years to complete. LNG developer Tellurian (TELL.A) in July moved to expand its gas holdings, spending $125 million on land to feed a proposed Louisiana export plant. Exxon Mobil this month said it is selling its Fayetteville shale properties after finding a buyer for North Texas gas that had been on the market for at least a year. High prices are helping revive asset sales in U.S. Conoco also said it plans to increase exposure to natural gas, and invest in two LNG projects. Three months earlier, it said the field was unlikely to get additional resources. APA Corp (APA.O) in August said it moved a rig into a West Texas gas field and began drilling again. This includes year-over-year volume increases in the three largest fields of 2.6% in Appalachia, 7% in Permian and 13.9% in the Haynesville shale fields. shale gas production is projected to reach 93.84 billion cubic feet per day (bcfd) in September, up 6.715 bcfd from a year ago, according to the Energy Information Administration. They can either pay to close those hedges, if able, or risk missing out on the price gains, Hagerty said. Producers including CNX Resources (CNX.N) and Southwestern Energy (SWN.N) hedged about 60% of their 2022 production, placing a ceiling of around $3 per mmcf. Hedging is when companies sell future production at fixed prices, which can be lower in a rising market.īTU has raised its forecast for 2022 gas production for four straight months, with its current outlook 365 million cubic feet per day (mmcfd) higher than April's view, while holding its 2022 oil outlook flat. prices, said Matt Hagerty, a senior analyst for market researcher BTU Analytics, a FactSet company. It is adding two drilling rigs in the Haynesville gas field and recently signed an agreement to deliver the fuel to Golden Pass LNG, a proposed LNG exporter.Ĭompanies like Conoco that do not hedge gas production are getting the benefit of strong U.S. Chesapeake Energy, which in 2019 spent nearly $4 billion to buy an oil-producer, now plans to sell that property and become a pure-play gas company.
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