U.S. Natural Gas Boom: The Race to Tap Shale's Potential

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". . .a shale gas well can continue to pump gas steadily for 20 or 30 years. . ."

Natural gas prices are at a six-year low, but that's not slowing one unconventional—and historically costly—method for extracting gas for energy. Shale gas reserves are contributing to the 11% rise in natural gas production the U.S. has seen in the past two years. But the deposits have been known about for decades—why are these resources drawing attention now?

America's first natural gas well tapped the shale underneath Fredonia, New York, in 1821. But the trapped gas could only trickle through the dense shale and the endeavor proved unprofitable for large-scale exploration. The problem with shale gas lies in its density. Despite the fact that some shale layers are continuous for hundreds of miles, traditional vertical wells could draw gas only from a tiny area.

Shale's true potential was first seen during the 1970s energy crisis when the Carter Administration predicted the U.S. had an overabundance of shale gas, says Penn State's Terry Engelder who studies the Marcellus shale. At the time, there was no economical way to tap these rocks, so the administration pushed for more research to tackle the problem of taking advantage of the dense, gas filled rocks.

In the 1990s, energy explorers began to refine a process called horizontal drilling. This technique, which drills through a layer of shale, can complete a full 90-degree turn underground by boring with an angled coupling that can turn about 10 degrees per 100 feet.

Even with better technology, techniques and huge prospects for profit, times are tough in the natural gas business. Drilling a horizontal well can cost four times as much as conventional drilling—about $4 million, compared to the $1 million for a vertical well and this extra up-front cost hurts when natural gas prices are low.

If energy companies can overcome the current recession and start exploiting shale gas, the volume of these deposits has the potential to change energy policy, Engelder says. If gas companies can prove the reliability they claim—that a shale gas well can continue to pump gas steadily for 20 or 30 years—policy makers could count on a huge, consistent domestic supply of natural gas to replace carbon-dense oil or coal.

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