The supply of natural gas is more adequate than the supply of oil at this time. However, as the demand for natural gas, a "clean" fossil fuel, increases, its use will continue to grow and, eventually, there will be Peak natural gas similar to Peak Oil (now occurring).
The role of LNG (liquefied natural gas) in supplying natural gas is also discussed as is the effect of the increasing shortage of natural gas on natural gas prices.
Is Natural Gas the True Energy Crisis? A leading Canadian newspaper recently wrote, "Forget oil! Natural Gas is the True Energy Crisis!"
We have to listen to the Canadians when they talk of natural gas supply because the Canadians are becoming an increasingly important source for the natural gas supply needed by the United States.
Unfortunately for the U.S., the natural gas supply situation is only marginally better than the world supply of oil. Consider the following:
a. The US has 3 % of the world's known natural gas reserves. The big three are Russia, Iran, and Qatar which, together, contain over 50 % of the world's natural gas reserves.
b. U.S. natural gas production peaked in 1972 and, since 1998, replacement of natural gas used in the U.S. has been well below 100%. So we are now using gas faster than we are producing it. We are living off accumulated natural gas reserves, natural gas imports from Canada and Mexico, and a small amount of natural gas obtained from LNG imports.
c. Natural gas demand in the U.S. will rise over 50% in the next two decades. This is the figure that is out there but it will be demand only! They may wish for 50 % increase in supply for the anticipated increase in natural gas usage, but where will the gas come from? (LNG is virtually the only possible source that could provide a large additional supply of natural gas.)
d. 99% of the natural gas used in the U.S. is produced in North America. Production of natural gas in the U.S. peaked in 1972 and we have been on a production plateau ever since. Production will soon start a downward slide from which there will be no recovery. Then, it will be up to Canada, Mexico and LNG to make-up the shortfall in natural gas supply. Neither Canada nor Mexico have as much natural gas as once thought although exploration into shale formations in Canada is getting hot as it did in the United States. This shale formation gas may kick Canada's gas reserves up substantially. But those reserves are not proven yet.
e. Rising natural gas prices lie ahead as gas usage outstrips gas supply.
Peak Natural Gas Production in U.S. Back in 1973, we reached peak oil production in the U.S., and, surprise, surprise, not too many years later, we begin to approach peak natural gas production at about 19 trillion cubic feet per year (Tcf). What happened to the infinite supply of gas we were once supposed to have?
The U.S. now has to import about 20% of the natural gas consumed in the country. Demand for natural gas is climbing in the U.S. and domestic production is slipping.
"Not to worry," as some people like to say. "Canada can keep us supplied with natural gas, right, Canada?"
Doesn't Canada has a Large Supply of Natural Gas? Well, Canada has been a good neighbor, probably a better neighbor to us than we would have been to them under similar circumstances. They have recently been supplying the U.S. with about 15% of U.S. natural gas needs as our natural gas production stabilizes and edges downward and our demand for natural gas soars upward.
But the demand for natural gas in Canada is increasing also. At some point, they may have to start rationing the natural gas exported to the U.S.
Which Countries Have Natural Gas Supplies for Export? The natural gas reserves of the world are distributed similarly, but not identically, to those of oil reserves. Russia has the largest natural gas deposits in the world although some experts feel they have damaged both their oil and natural gas fields with poor production practices. Iran has the second largest deposits of natural gas. Both countries are moving into the LNG export business and may eventually play a big role in producing and shipping LNG to the U.S.
Qatar's natural gas reserves. Although, Qatar's official natural gas reserves place them in third place behind Russia and Iran, they may be number one. Although a very small country, their offshore North Field gas field could contain as much as 900 trillion cu ft. of natural gas. An incredibly large deposit of natural gas! Qatar could become the "giant" in natural gas (and in providing LNG for export to the U.S.
You have to wonder how long a small, virtually defenseless, country like Qatar can maintain its independence when the big boys get really desperate for new energy sources.
Mice like Qatar have to beware when the elephants start dancing!
Natural Gas - The Clean Fuel. Of all fossil fuels, natural gas is environmentally cleanest (the "clean" fuel), is reasonably priced, and is a very efficient fuel to use.
Natural Gas - The Power Plant Fuel. 95 % of all new power plants being built are to be fueled by natural gas.
Natural Gas - Home Heating Fuel. 60 % of American homes are heated by natural gas.
Most New Wells are for Natural Gas. 80 % of all wells presently drilled in the U.S. are for natural gas, not oil. Still, new natural gas reserves found lag the amount needed. Let's face it - the U.S. is about drilled out! We have no choice but to import natural gas.
Many New Gas Wells. In Texas alone, over 6,000 gas wells are drilled each year. In Alberta, Canada, over 7,000 gas wells are drilled annually. And still, they are having difficulty keeping up with natural gas demand.
Canadian Natural Gas. Canada currently supplies 15 % of the natural gas used in the U.S. and we need even more from Canada. Hopefully, their geological shale formations, now being explored, will be found to be rich in natural gas as these same type shale formations were in the U.S. They are now looking very hard for gas in those Canadian shale formations.
Relation of Oil Prices vs. Natural Gas Prices. Over the years, the price of a barrel of oil is more expensive than a thousand cubic feet (MCF) of natural gas by a ratio of about six to one. Both oil prices and natural gas prices are rising rapidly.
Hurricanes Katrina and Rita. Natural gas production in the Gulf of Mexico during 2005 and 2006 was greatly reduced due to Hurricanes Katrina and Rita. As a result of the production interpretation, gas supplies for awhile were lower than normal and natural gas prices per 1,000 cubic feet climbed from $6 to over $13. These prices have dropped back to about $9 as Gulf of Mexico natural gas facilities continue to come back on line.
A few words on LNG now, and more will follow on another web page.
LNG is natural gas that has been cooled and liquefied. The volume of LNG is 1/600 the volume of an equivalent quantity of natural gas. This liquid natural gas can be shipped in LNG tankers.
There is an enormous amount of effort underway in the U.S. at this time regarding LNG.
For more detailed information, please visit LNG - Liquefied Natural Gas. Also, for information on some of the companies working in the LNG field, please visit Oil & Energy Company Stocks.
As the reader can see, I am hot on LNG. It and GTL (see below) are our best chances to beat Peak Oil and the energy crisis (short term only - in a decade or so, we will also reach Peak natural gas.)
The rapid development of GTL in South Africa is very welcome. It is another example of a foreign country eating our lunch in technology. While we invade Iraq and lose three thousand soldiers dead while seeking to stabilize our Middle East energy sources, Sasol, headquartered in South Africa, jumps in and gets a head start on making this clean, non-explosive, diesel-like fuel from natural gas. It is going to sell well in Europe where gasoline is being rapidly abandoned in favor of diesel. (The U.S. is lagging the developed world in diesel use.)
Meantime, Iraq's oil production is lower than when we invaded.
Was this administration clever or what?
The only problem with GTL is time. Like LNG, GTL will take years of development before it can make a meaningful impact.
Eventually, I think LNG and GTL will help us combat the ill effects of Peak Oil. If the arrival of Peak Oil can only be delayed long enough. If............
Very Deep Gas (Thomas Gold Gas)
Coal Bed Gas
Garbage Dump Gas
None of the three above alternate sources of natural gas are well developed but all have some potential and we should continue to move ahead with their development. Very deep gas is still somewhat of a dream but the late Thomas Gold thought it was there and, if the genius, Thomas Gold, thought it was there, it very well may be.
In regards to coal bed gas, beware. It may someday become an excellent source of natural gas but the hucksters are on to it. The week doesn't go by that I don't get another flyer in the regular mail or e-mail trying to get me to invest in some small coal bed gas company and be rewarded by an increase in the value of the investment by ten-fold in just a few months. Am I missing a good bet or what? Hopefully, the hucksters will be right this time. We need the gas.
Methane obtained from mining ocean bed hydrates is not listed above. The potential supply from this source would be virtually inexhaustible....if it were available. However, so far, no one has been able to develop a technique to economically recover the ocean bed hydrate methane.
An ominous report on tundra hydrates appeared recently. The article said that a huge tundra area in northern Canada was thawing and that huge quantities of methane could be released. Methane is a powerful greenhouse has and could increase the global warming threat. Maybe we should mine these hydrate deposits to delay global warming as well as obtaining a natural gas supply.
1. Oil Natural gas supplies are important as the energy crisis arrives but the dwindling oil supplies make all the headlines.
2. Hybrid Car. Development of hybrid car technology could help the U.S. deal with the energy crisis until alternative energy sources are developed.
3. Oil & Energy Crisis. Peak Oil is just around the corner; eventually we will also have Peak natural gas. Alternative energy, anyone?
Natural gas is a clean fuel for which there are increasing uses and an increasing demand. Natural gas supply, however is, like oil, limited and the U.S. has already passed the peak natural gas production point and reserves are not adequate to permit natural gas production increases. Peak world natural gas will eventually occur and problems with natural gas supply will follow.
Last Updated: 07/02/08
e-mail me @ vanc13@cox.net
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