Conflicting forecasts for natural gas

A new study suggests that estimates for U.S. supplies may be vastly overstated.

 

The wide-scale deployment of hydraulic fracturing, the technique of blasting water and chemicals into the ground to release trapped hydrocarbons, has, over the last decade, vaulted the U.S. into the position of leading natural gas producer in the world.

In these boom times, natural gas has been hailed by a wide cross-section, from energy CEOs to the president, as an important "bridge" fuel source in the shift away from coal. In his latest State of the Union address, President Obama laid out his ambitious vision for natural gas in the national energy mix: “Natural gas – if extracted safely, is the bridge fuel that can power our economy with less of the carbon pollution that causes climate change,” Obama said. 

But, as with shale oil, there is emerging evidence that the U.S. natural gas boom may be built on shaky numbers. 

A recent study from researchers at the University of Texas at Austin found that the estimated volume of natural gas in four of the U.S.’s largest shale plays – the Marcellus, Haynesville, Fayetteville and Barnett – is likely to be vastly overstated.

Wellpads, access roads, pipeline corridors and other natural-gas infrastructure in the Jonah Field of western Wyoming's upper Green River valley. By Flickr user SkyTruth.
Funded with a $1.5 million grant from the Alfred P. Sloan Foundation, the Texas team spent more than three years analyzing industry data and forecasts from the Energy Information Administration (or EIA, the data analysis branch of the Department of Energy), which projects that production from those four major fields will continue to increase for more than two decades before finally plateauing.

“(A) careful examination of the assumptions behind such bullish forecasts suggests that they may be overly optimistic, in part because the government’s projections rely on coarse-grained studies of major shale formations,” writes energy reporter Mason Inman, discussing the University of Texas research team’s findings in the latest issue of the journal Nature. “Now, researchers are analyzing those formations in much greater detail and are issuing more-conservative forecasts.” The results of the UT team’s detailed analysis suggests that instead of peaking in 2040, the “big four” will instead peak in 2020 and decline sharply after that.

The reason, explains Inman, is that gas tends not to be evenly distributed throughout a formation – as the EIA analysis assumes – but is typically found in relatively small “sweet spots.” This not only hints at a lower overall volume of gas, but also means that fewer wells can potentially be drilled to extract what’s there.

The matter is not merely academic. If the estimates are overstated, Inman points out, it could have serious repercussions for companies that are investing heavily in infrastructure projects such as new natural gas fired plants or export terminals to ship liquefied natural gas overseas.  

The findings parallel those of David Hughes, a private analyst who has authored several reports for the Santa Rosa-based Post-Carbon Institute. His latest report, “Drilling Deeper,” released at the end of October, suggests that the top seven natural gas plays in the U.S. will underperform EIA estimates by almost 40 percent between over the next 25 years. “By 2040, production rates from these plays will be about one-third that of the EIA forecast,” reads a press release on Hughes’s report. “Production from shale gas plays other than the top seven will need to be four times that estimated by the EIA in order to meet its reference case forecast.”

In addition to new challenges to once unquestioned resource estimates, recent studies have pointed to major “fugitive emissions” from the nation’s natural gas fields. A study last year from NOAA found that as much as 12 percent of the natural gas produced in Utah’s Uintah Basin escaped into the atmosphere; another NOAA study of the Los Angeles Basin found the percentage as high as 17 percent. (Methane is of particular concern as a greenhouse gas since it is more than 20 times more potent than carbon dioxide in trapping solar radiation in the atmosphere over a period of 100 years.)

In October, as HCN senior editor Jonathan Thompson reported, NASA released findings from its satellites revealing the country’s largest single methane hotspot over the gas fields of the San Juan Basin, in northwestern New Mexico. Though some were quick to point to hydraulic fracturing as the likely cause of the New Mexico methane cloud, the high levels are said to predate the use of the practice in the region. The San Juan Basin is different from other major plays such as the Marcellus in that the gas is trapped in seams within coal formations rather than tight shale rock.

All of which is to say that evidence is mounting, calling into question the vision of natural gas as a clean and abundant fuel source of the future.

Jeremy Miller is a contributing editor to High Country News and he writes from Northern California.