With the new year upon us, here is a preview of several energy-related issues and events we will likely see this year:
Expansion of natural gas production, transmission and distribution. The spread of hydraulic fracturing or fracking as a technique to produce natural gas from previously-uneconomic sources appears to be the largest revolution in the U.S. energy landscape in decades. Natural gas will continue to displace coal and oil as an energy source in 2013, particularly for the generation of electricity. The availability of cheap natural gas will also lead to the development of more local distribution company pipelines, enabling more businesses and homes to connect to natural gas supplies. 2013 will likely also bring proposed new natural gas transmission pipelines, connecting gas sources like the Marcellus and Utica shale fields to consumers across the country.
Offshore wind in U.S. waters. 2013 may see the construction of the first offshore wind projects in United States waters. Cape Wind's project off Massachusetts may start cable work or other construction this year, as may Deepwater Wind's Block Island project off Rhode Island and Fishermen’s Energy's project off Atlantic City, New Jersey. Congress's last-minute extension of the Investment Tax Credit or ITC gives a significant boost to offshore wind projects capable of beginning construction in 2013. Not only was the tax credit's deadline extended by one year, but Congress also changed
the trigger from being "placed in service" to commencing construction by December 31, 2013. No offshore wind projects are currently operating or under construction in U.S. waters, so 2013 could be the year the first projects enter the water. The federal Bureau of Ocean Energy Management is expected to continue its leasing program, making more ocean sites available for future offshore wind projects.
Keystone XL pipeline. The Keystone XL pipeline, a $7 billion proposed extension of an existing crude oil pipeline, is slated to connect Alberta, Canada to Texas. In 2011 and 2012, the project faced public scrutiny and failed to secure necessary federal and state approvals. Among other permits, the project faces State Department review because it would
enable imports or exports of oil across the national border with Canada. Meanwhile, project lead TransCanada is moving ahead with the construction of some of the domestic legs of the project, and the full project is likely to come back up for review this year.
Energy efficiency continues to grow. Investments in energy efficiency are likely to continue to grow in 2013. Using fuels and energy sources more efficiently saves money for businesses and homeowners capable of making the investment. It can also lower market prices for electricity and fuels by reducing demand, spreading the savings across all consumers. New England regional electric grid operator ISO New England recently revised its load forecast to predict no increases in the demand for electricity through 2021 as a result of increased investment in energy efficiency. This trend is likely to continue nationwide.
With 362 days left in the year, these issues and events are likely to be discussed for some time to come. Will these predictions come true in 2013?
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label fracking. Show all posts
Showing posts with label fracking. Show all posts
Marcellus shale gas drilling slows
Tuesday, July 10, 2012
Natural gas drilling activity has declined in parts of the Marcellus Shale formation under Pennsylvania and other eastern states, largely as a result of low gas prices. These prices in turn are largely the result of significant increases in the available supply of recoverable natural gas made possible by horizontal drilling techniques and hydraulic fracturing or fracking. As a consequence, many natural gas producers are focusing on areas of shale rich in both gas and natural gas liquids.
The Marcellus Shale, a layer of ancient marine sediment rich in organic material and extending beneath Pennsylvania, Ohio, West Virginia, New York, and Maryland, is believed to be one of the world's largest natural gas fields. In 2008, drilling activity in the Marcellus Shale began to increase significantly, as these newer drilling techniques and increases in the price of other fuels like oil made the shale gas economically feasible to recover. (Compare this map of Marcellus shale drilling activity in Pennsylvania from 7/25/2008 to this map of permits issued as of March 9, 2012.) As of this spring, Pennsylvania alone had issued 11,772 permits for vertical and horizontal gas wells in the Marcellus formation.
One result of the expansion of shale gas production is a significant decrease in the price of natural gas. Since 2008, natural gas prices at the Henry Hub in Louisiana (where gas as a commodity is typically priced) have fallen from over $12 per million British thermal units (MMBtu) to as low as $2 per MMBtu. Other factors have played a role in this price decline, such as a mild winter with lower-than-expected heating demand and the overall economic slowdown, but the increase in supply due to shale gas production is viewed as a major cause of the price decline.
Now, one of the effects of the price decline is a decrease in natural gas drilling activity. This decrease is particularly marked in areas where the shale produces "dry gas", or natural gas that is primarily methane and is low in so-called natural gas liquids. Natural gas liquids -- hydrocarbons other than methane that are extracted when natural gas is processed in a natural gas treatment facility -- include ethane, propane, and butanes. These natural gas liquids are important feedstocks for the production of many chemicals and plastics, and add value to the natural gas produced from "wet" shales.
Where shale gas contains significant amounts of natural gas liquids, production appears steady or increasing, while gas producers in areas with lower amounts of natural gas liquids are now saying that they are having a hard time making money off gas alone. If this trend continues, areas of dry gas like much of the known portions of the Marcellus Shale may continue to see a slowdown in drilling activity while producers focus on areas rich in natural gas liquids.
The Marcellus Shale, a layer of ancient marine sediment rich in organic material and extending beneath Pennsylvania, Ohio, West Virginia, New York, and Maryland, is believed to be one of the world's largest natural gas fields. In 2008, drilling activity in the Marcellus Shale began to increase significantly, as these newer drilling techniques and increases in the price of other fuels like oil made the shale gas economically feasible to recover. (Compare this map of Marcellus shale drilling activity in Pennsylvania from 7/25/2008 to this map of permits issued as of March 9, 2012.) As of this spring, Pennsylvania alone had issued 11,772 permits for vertical and horizontal gas wells in the Marcellus formation.
One result of the expansion of shale gas production is a significant decrease in the price of natural gas. Since 2008, natural gas prices at the Henry Hub in Louisiana (where gas as a commodity is typically priced) have fallen from over $12 per million British thermal units (MMBtu) to as low as $2 per MMBtu. Other factors have played a role in this price decline, such as a mild winter with lower-than-expected heating demand and the overall economic slowdown, but the increase in supply due to shale gas production is viewed as a major cause of the price decline.
Now, one of the effects of the price decline is a decrease in natural gas drilling activity. This decrease is particularly marked in areas where the shale produces "dry gas", or natural gas that is primarily methane and is low in so-called natural gas liquids. Natural gas liquids -- hydrocarbons other than methane that are extracted when natural gas is processed in a natural gas treatment facility -- include ethane, propane, and butanes. These natural gas liquids are important feedstocks for the production of many chemicals and plastics, and add value to the natural gas produced from "wet" shales.
Where shale gas contains significant amounts of natural gas liquids, production appears steady or increasing, while gas producers in areas with lower amounts of natural gas liquids are now saying that they are having a hard time making money off gas alone. If this trend continues, areas of dry gas like much of the known portions of the Marcellus Shale may continue to see a slowdown in drilling activity while producers focus on areas rich in natural gas liquids.
February 16, 2011 - Louisiana natural gas production
Wednesday, February 16, 2011
Natural gas is a key component of the U.S. energy mix. Even here in New England, relatively far from gas production zones, gas-fired generation accounts for more than a third of the electricity produced. Where local distribution companies operate, consumers can also use gas for heating.
Louisiana is a major source of natural gas supply in the U.S. While the Outer Continental Shelf (OCS) offshore Louisiana provides a large part of the gas flowing out of the state, north Louisiana’s Haynesville Shale is seeing increased production. Laid down as sediments in a shallow marine environment during the Jurassic (about 150 million years ago), the Haynesville Formation includes shale units that are now about 2 miles deep beneath northwestern Louisiana, southwestern Arkansas, and eastern Texas.
Gas production from the Haynesville Shale is booming, thanks in part to hydraulic fracturing or “fracking”. That's the same technique of cracking open the gas-containing strata by forcing high-pressure water, chemicals, and mechanical "proppants" underground to hold the layers of rock open and let the gas flow out. About 61% of Louisiana’s gas production came from the formation, bringing the state's total 2010 production to around 2 trillion cubic feet of natural gas. That level of production is not only 36% above 2009 levels, but is moreover the highest level of production since 1984.
The environmental impacts of this technique are still under evaluation, but customers are already feelign one impact of fracking: low gas prices, as the nation's supply has risen significantly. According to the federal Energy Information Administration, natural gas prices are predicted to average $4.02 per thousand cubic feet in 2011, about 9% below 2010's average pricing.
Will gas continue to be produced at these levels? Will these low prices continue? Are any other regulations needed to protect safety and the environment? If so, what will that mean for gas pricing?
Louisiana is a major source of natural gas supply in the U.S. While the Outer Continental Shelf (OCS) offshore Louisiana provides a large part of the gas flowing out of the state, north Louisiana’s Haynesville Shale is seeing increased production. Laid down as sediments in a shallow marine environment during the Jurassic (about 150 million years ago), the Haynesville Formation includes shale units that are now about 2 miles deep beneath northwestern Louisiana, southwestern Arkansas, and eastern Texas.
Gas production from the Haynesville Shale is booming, thanks in part to hydraulic fracturing or “fracking”. That's the same technique of cracking open the gas-containing strata by forcing high-pressure water, chemicals, and mechanical "proppants" underground to hold the layers of rock open and let the gas flow out. About 61% of Louisiana’s gas production came from the formation, bringing the state's total 2010 production to around 2 trillion cubic feet of natural gas. That level of production is not only 36% above 2009 levels, but is moreover the highest level of production since 1984.
The environmental impacts of this technique are still under evaluation, but customers are already feelign one impact of fracking: low gas prices, as the nation's supply has risen significantly. According to the federal Energy Information Administration, natural gas prices are predicted to average $4.02 per thousand cubic feet in 2011, about 9% below 2010's average pricing.
Will gas continue to be produced at these levels? Will these low prices continue? Are any other regulations needed to protect safety and the environment? If so, what will that mean for gas pricing?
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