Monday, March 23, 2009

CERA's Review on Natural Gas

I didn't want to do two posts on natural gas today, but I noticed this piece from CERA. Read some of it below; it's titled "Technology Drives North American Gas Renaissance: New CERA Analysis"

North American natural gas is entering a new era in which supply is no longer constrained, according to a new Cambridge Energy Research Associates (CERA) multiclient study, Rising to the Challenge: A Study of North American Gas Supply to 2018. A revolution in technology has unlocked “unconventional” gas resources, dramatically changing the prospects for the market. Demand, rather than supply, will be the challenge for the market going forward, accentuated currently by the economic crisis.

In Rising to the Challenge, CERA, an IHS Inc. (NYSE: IHS) company, has developed its supply outlook based upon detailed analysis of gas fields and then tested it using its North American gas market modeling capabilities to provide a supply analysis at the play level that is integrated with CERA’s market outlook. The study concludes that the North American natural gas market can now be largely supplied by North American gas production.

The main driver of supply growth in the years ahead will undoubtedly be unconventional gas production, which has benefited disproportionately from technology. Domestic gas producers explored a variety of technologies to exploit the known unconventional resource base. The success of these efforts became evident in 2007-2008 when production in the lower 48 United States grew rapidly - from a 2007 low of 49.8 billion cubic feet per day (Bcf/d) in February to 56.7 Bcf/d in July 2008, an increase of 6.9 Bcf/d and almost 14 percent in just 17 months.

[...]

Given the increased productivity of unconventional wells, the study concludes that it is not necessary to increase drilling activity to maintain – or increase – production. After years of developing unconventional gas with its long-lived production, in the aggregate, the average decline rate will fall. This means, the study says, that a smaller quantity of new production is required to offset natural production declines. CERA does expect production to increase, with dry gas productive capacity growing from an average of 53.5 Bcf/d in 2009 to 60.6 Bcf/d in 2018 in the lower 48 United States, and from 15.8 Bcf/d in 2009 to 19.6 Bcf/d in 2018 in Canada.

- Brewskie

No comments:

Post a Comment