Background on natural gas revolution

I am rapidly getting educated on the revolution in oil that is underway. Haven’t dug into the natural gas revolution that has been going on a long time.

The Economist has a 14 page special report on natural gas in their July 14 edition: An unconventional bonanza.

If you are reading my posts on energy, you will want to check out their articles.

A few of the things I learned is that natural gas is very difficult to transport. As a result, there is a limited international market. That means that most gas is sold and used in the country where it is produced. That would be why prices in the US have dropped so radically but stayed stable elsewhere.

The technology is evolving rapidly. This also means the costs to drill are dropping and will probably continue to drop:

From the article Gas works:

The cost of getting at the gas has come tumbling down as techniques have become more efficient. Drilling multiple wells from a single pad, up to six at a time, has made operations cheaper. Three-dimensional seismic imaging has made it easier to find sweet spots where gas might flow in large quantities. Horizontal drilling sections have got longer. Break-even costs have plummeted.

The article Landscape with well gives a superb and short description of horizontal drilling and fracking. Amongst other things it describes the limited landscape disruption from a gas well. After the well is in production there are some pipes visible above ground along with a water tank.

The article also describes the drop-off in production:

The gas rushes out rapidly in the first year or so before tailing off quite fast to a third of the original flow and gradually declining thereafter.

That article has a great graphic on a drilling site. The groundwater is at 100 meters. The horizontal drilling is at 2200 meters and appears to be about a 500 meter run an illustration. As usual that shows about 2100 meters, or around 6000 feet, between the aquifer and the drilling.

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