The Importance And Many Uses Of Natural Gas

The following article at geology.com is an excellent summary of the many uses of natural gas, the demand for it, its cost and production cycles. It is obviously an enormously important resource. Go here to see the entire article.
Peter

The Many Uses of Natural Gas
July 29, 2010 Geology.com

Natural gas is important as a fuel and as a raw material for manufacturing. This article explores the many uses of natural gas and has a number of graphs to illustrate variations in use by season, by industry sector and over

Natural gas is used by everyone, in one way or another. Right now, and in the foreseeable future, there is no replacement, no "alternative" for it.

Prices for natural gas vary from one place to another as geology.com shows in the above map. The production of gas close to the areas where gas is now very expensive will have a great positive impact on those areas.

Range Resources Betting Heavily On The Marcellus Shale Gas Play

With offshore drilling in the Gulf of Mexico in limbo, activity is shifting to onshore oil and gas exploration and drilling opportunities. One thing is certain, America and the world, recession or not, global warming or not, people are going to use and need energy. We can't afford to wait around for "pie in the sky" ideas like solar, wind, nuclear, and geothermal energy to meet our needs. Natural gas as a pre-eminent energy source is looking better all the time. Obviously many others see the same thing. I wonder when our leaders in Washington D.C. will catch on.
Peter


Range hikes spending for Marcellus activity

By OGJ editors (source)
HOUSTON, July 27 – Range Resources Corp., Fort Worth, hiked its 2010 capital budget $215 million to $1.2 billion, all but $5 million of which is related to expanding activity in the Marcellus shale play in Pennsylvania.

The company plans to end 2010 producing a net 200-210 MMcfd of gas equivalent from the Marcellus, up from 180-200 MMcfed estimated earlier, and end 2011 at 400-420 MMcfed, up from 360-400 MMcfed. Current output is 160 MMcfed.

The other $5 million spending hike is related to acquired properties in western Virginia (OGJ Online, July 27, 2010).

Of the Marcellus spending hike, $65 million is to drill 18 wells in the southwest part of the play and to complete 15 of them by the end of 2010, and $73 million is for pre-winter construction of drilling locations, roads, and other facilities for wells to be drilled in 2011.

Range is combining 14,000 net acres in Bradford County, Pa., with Talisman Energy Inc., Calgary, in an industry joint venture in which Range will own 33% in the combined acreage position. Talisman, which has drilled several excellent wells in the area, will be operator for the joint venture, for which Range’s share of costs is likely $25 million for the rest of 2010.

Another $40 million is for Marcellus shale leasehold, and $7 million is for seismic.

In the southwest part of the play, 30 MMcfed of pipeline capacity is to be complete in the fourth quarter and a further 150 MMcfed is set for first quarter 2011.

The first phase of the Lycoming County pipeline project in the northeast part of the play is scheduled to begin flowing gas by yearend 2010. Firm take away capacity has been contracted for both the southwest and northeast areas.

Range previously announced an encouraging test of its first Upper Devonian shale horizontal well. Given the Upper Devonian’s prevalence across the company’s acreage position, it is very encouraged regarding the increased unproved resource potential this well implies on the southwestern Pennsylvania acreage.

The company’s Marcellus shale team plans to drill two more Upper Devonian test wells in 2010 and one Utica shale well early in the first quarter of 2011.

Will Shale Gas Create An International Economic Energy Revolution?

Increased finding, production and usage of natural gas may affect the world economy. There are questions and challenges for sure, but the technology to find and produce this gas is well-established and in most places, particularly the United States, the infrastructure to transport and use this gas already exists. Now if the Federal Government will let us explore for, drill and complete the necessary wells, we might be a able to pull ourselves out of this economic recession.
Peter

WoodMac: Pay attention to 'unconventional gas revolution'

Eric Watkins
OGJ Oil Diplomacy Editor (source)

LOS ANGELES, July 23 -- Global unconventional gas has the potential to reshape global gas dynamics, according to a report by analyst Wood Mackenzie. Indeed, according to the report’s authors, companies that position themselves early will be best placed to benefit from the “unconventional gas revolution.”

Rhodri Thomas, a principal analyst from WoodMac’s unconventional gas service, said, “Development of just a small proportion of this resource could dramatically change local gas markets with further implications for global gas dynamics.”

Specifically, according to Thomas, unconventional gas could reduce import requirements, provide additional export sources, and impact global gas pricing. “There is huge potential but there are also huge associated challenges and uncertainties,” Thomas said.

“For potential suppliers, specific issues include the need to develop a gas marketing strategy cognizant of lengthy initial ramp-up periods, potentially unreliable early production and often illiquid local markets,” said Noel Tomnay, head of global gas service for WoodMac, and coauthor of the report.

“Such strategy development will likely include partner screening, particularly for those companies without a suitable gas portfolio and/or local gas marketing capabilities,” Tomnay said.

The authors note in particular the potential effect of unconventional gas on geopolitics, especially in Europe where “successful development of unconventional gas will mean indigenous supply for countries which currently rely on imports.”

According to Tomnay, reduced import dependency could “significantly blunt” the future pricing power of key gas exporters such as Russia.

“In Asia, the potential for indigenous unconventional gas production is higher than in Europe and the relative expectation of import dependency lower,” said Tomnay. As a result, he said, the impact of unconventional gas “could be greater” in Asia than in Europe.

Unconventional gas in fact “could put a significant dent in, or even negate, incremental gas import requirements in key Asian markets and could also provide an additional competitive threat to future LNG export expansion from high cost projects such as in Australia.”

While the longer term impact of unconventional gas could be profound, the reality is that outside of North America and eastern Australia the economics and logistics of undertaking large scale unconventional gas operations have yet to be proven.

More to the point, some of the key success factors behind the rapid growth in North America are missing. As a result, the pace of growth is likely to be slower than that witnessed in North America and substantial volumes on a global scale are unlikely before 2020.

“It is too early to say how the future of unconventional gas will play out, but it is clear that stakeholders across the gas value chain—gas suppliers, resource holders, buyers and policy makers—need to understand the possible impact of future developments,” said Thomas.

“Those that do this early and monitor key signposts will be best placed to benefit from the unconventional gas revolution,” Thomas said.