Wednesday, December 30, 2009

[Top 10] #2: Perception of Natural Gas Shifting from Scarcity to Abundance

The longstanding dominant perception of the natural gas industry was that we were going to run out of gas in our lifetimes. With the advent of shale gas production, that paradigm has been smashed. The new paradigm, which is gaining gradual acceptance, is one of natural gas abundance, not scarcity.

This is a big deal and is still a work in process as the word continues to get out. But the big news is that the word is, in fact, getting out.

Earlier in the year, the Potential Gas Committee reported that gas reserves in the U.S. are approximately 2,074 Tcf, an increase of 35% from the previous report two years ago. The promise of shale gas has reinvented the domestic natural gas industry. What is really astonishing was that as rig counts were cut by more than half over the past 15 months, gas production continued to grow. The major gas-in-storage drama of the past six months is a direct result of strong wells putting up big numbers with fewer drilling rigs. If, for some reason, production in North America were to flag, there will be gigantic LNG tankers at major ports lined up to take up the slack.

This change in perception is big because when key decision makers in government and business understand that natural gas is a plentiful, dependable resource, consumption will increase and natural gas will be closer to widespread use.

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