Natural gas from new sources

The convergence of three technologies—horizontal drilling tools, smart drill feedback communications, and fracking, made energy recovery from tight rock formations practical and have made natural gas a dominant player in energy production.


Map illustrates the diversity of natural gas plays in North America. Courtesy: U.S. Energy Information AdministrationFew of us saw this coming. We didn't foresee the important role that would be played by tight natural gas extraction technology on the volume and location of natural gas recovered. Final production figures for 2016 are not yet tabulated, but it is expected that for the first time, more than half the natural gas that comes to market in the U.S. comes from gas wells in shale and other tight rock formations. This was a resource that in previous decades was considered "not economically recoverable."

The term "tight" refers to rock formations which hold gas and oil so closely that it cannot be recovered economically without fracturing the rock. In large part, because of shale and other tight rock-sourced natural gas and oil, the energy picture has dramatically changed. Areas in the Eastern United States and Eastern Canada are producing large volumes of natural gas where it was not previously produced. Western regions that had been in a production decline are now on an upswing.

New sources, new technology

The convergence of three technologies made energy recovery from tight rock formations practical. These were sophisticated horizontal drilling tools and techniques, "smart" drill feedback communications, and hydraulic fracturing—"fracking." Beginning in the early 2000s, use of these tools began contributing to North American energy production capabilities.

Interestingly, although oil and natural gas are associated in many production fields, currently the largest producing tight oil fields and the largest tight gas fields are not in the same areas. According to the U.S. Energy Information Administration (USEIA), of the top ten tight gas-producing fields in the US, only one, the Eagle Ford formation in Texas, is also among the top ten oil fields.

Sources in varied locations

The largest-producing natural gas formation in the U.S. is the Marcellus formation in Pennsylvania and West Virginia. In 2013, this formation accounted for 2,836 billion cubic feet of natural gas. Other important formations include the Newark East Barnett Shale in Texas, and the Haynesville Shale in Texas and Louisiana. Other regions that have major shale gas production include Arkansas, New Mexico, Colorado and Wyoming.

In Canada, a much lower percentage of the country's gas production currently comes from shale and other tight rock formations. Prominent producing areas in Canada include northeastern British Columbia and to a lesser extent, Alberta. In Quebec, Nova Scotia and New Brunswick, promising formations have been identified, but production is still quite low. Canada is a net exporter of natural gas, most of it to the U.S. 

Chart shows one EIA projection of the energy sources for future electric generation. This illustrates the probable growing role of natural gas as a replacement for coal-fired generation. Courtesy: U.S. Energy Information AdministrationDecline of utility carbon emissions 

In a related significant development, electric utility carbon emissions in the U.S. for the first time in decades fell to a level below that of transportation carbon emissions. This follows a steady drop in these utility emissions since 2003. This decline can be attributed to three factors: The retirement of older coal fired generating stations, the increasing installation of lower-emission natural gas fired facilities, and the growing role of renewable electric generation from solar and wind sources.

Where the gas turbine alone is used to operate a generator, it is called a simple-cycle plant. These have been widely used in the past, but the growing trend is toward what is called a combined-cycle plant. Here, the exhaust from gas turbines is directed to a heat recovery device for steam generation. The steam is used to turn a steam turbine for additional generation.

Strong trend toward combined-cycle 

According to the USEIA, in 2018 about 75% of new natural gas-fired generating plants will be of the combined-cycle type. This trend is one of the reasons that natural gas utility emissions are significantly lower. Combined-cycle technology increases the generation efficiency of the plant and thereby reduces carbon emissions per kWh generated.

An example of implementation of this technology was recently given by Siemens spokesperson Dalia El Tawy of Siemens Energy at a Technology & Market Assessment Forum, sponsored by the Energy Solutions Center. She described a decision by the City of Holland, Michigan to replace a coal-fired generating station with a natural gas-fired combined-cycle plant. This plant has two Siemens gas turbines rated at about 50 MWe each, and a steam turbine rated at about 40 MWe.

The byproduct heat from the plant, in addition to feeding the steam turbine, is used to supply an expanded snowmelt system covering over 11.5 acres of city street and sidewalk. This is the largest snowmelt system in the U.S., serving a city in the lake-effect snow area of western Michigan.

This is typical of hundreds of decisions being taken by public and investor-owned utilities in the U.S. and Canada. In a recent USEIA forecast, in 2018 for the first time ever, electric generation from natural gas will exceed that from coal combustion. The world changes.

Export and import in balance

Taken together, the United States and Canada consume a very high percentage of the natural gas produced by the two countries. The U.S. is a significant importer of natural gas from Canada in the west—in Idaho, Montana, and Minnesota. On a somewhat smaller scale, the U.S. is an exporter of natural gas in the east—in Michigan and New York into Ontario and Quebec. Changing production volumes in both countries will cause these balances to continually change in the future. The U.S. is also a major net exporter of natural gas into Mexico. In the case of these three countries, gas movement is almost entirely by pipeline.

Graph shows recent trends in gas in storage in the U.S. Note increase has been gradual because of the growing seasonal diversity of gas usage. Courtesy: U.S. Energy Information Administration

Because of the growing production of natural gas in North America, the trend of natural gas importing into the U.S. by liquid natural gas shipment has remained steady or declined slightly. Of the imported liquid natural gas, in 2015 about 80% came from Trinidad/Tobago. Other sources include Norway, Yemen and other countries. However, on a broad level, imports of liquid natural gas currently represent a small proportion of gas used.

Gas storage trends 

Natural gas is produced at a fairly even rate through the year, but traditionally, the usage pattern is much higher in the winter. For this reason, storage facilities have been developed in the U.S. and Canada to allow withdrawals during times of peak usage, and replenishment during other times of the year. These storage sites include depleted oil and gas production fields, below impenetrable aquifers, and in empty salt caverns.

Storage remains steady

Although the usage of natural gas has increased dramatically in recent years, the available storage capacity has shown few changes. This has not been a problem to date, because much of increase in usage has been by electric generation and manufacturing applications. Electric generation nationwide peaks during summer air-conditioning months, thus tending to even out annual demand patterns. Thus, the unevenness between summer and winter usage has not increased.

Future for natural gas is bright

Natural gas is the fuel that is driving many changes. It is supporting the transition from coal and oil to other methods of electric production. It is making it possible for North America to hold onto many of its traditional industries, and in fact is drawing some companies that have offshored to return home. And it is a lead force in a world that is demanding higher efficiency, lower emissions, and energy to maintain our life style.


Canada National Energy Board/Natural Gas

U.S. Energy Information Administration/Natural Gas 

This article originally appeared in the Gas Technology Spring 2017 issue.

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