New Technology Drives Surge in Natural Gas Production

Horizontal drilling allows gas producers to access shallow shale rock formations and extract more of their trapped gas reserves. (image: oilandgasevaluationreport.com)

A surge in US natural gas production and subsequent propane supply boom is the result of horizontal drilling combined with more hydraulic fracturing, the US Energy Department says.

The Energy Information Administration yesterday released data highlighting the rapid jump in horizontal drilling operations in recent years to access shale gas formations.

In Texas’ Barnett shale, the most developed shale area in the US, the number of producing horizontal wells rose from fewer than 400 in 2004 to more than 10,000 last year. Annual production from horizontal wells exceeded vertical well production for the first time in 2006, and now accounts for 90 percent of Barnett natural gas production

The EIA report says shale deposits are typically thin layers of rock covering wide areas. Horizontal drilling lets producers drill through much more gas-producing rock – traversing up to 5,000 feet or more of a given shale deposit. Vertical wells however go through the deposit, tapping only a small vertical layer of shale, producing less natural gas and propane.

“When combined with hydraulic fracturing to break apart the relatively impermeable shale, horizontal wells allow considerably greater gas production than vertical wells, more than enough to make up for their greater expense.”

The downside, however, is environmental concerns associated with the controversial “fracking” practice. It involves a cocktail of undisclosed chemicals being blasted beneath the ground to dislodge the gas and has been implemented in the contamination of ground water.

As we reported yesterday, France has just become the first country to ban fracking because of environmental concerns, despite lying on a potential goldmine of shale gas reserves.

As crude prices rise and the US seeks to reduce its reliance on foreign oil, it will increasingly rely on domestically-produced natural gas and alternative fuels such as propane. It is therefore crucial for the federal authorities to set environmentally sound regulations, while allowing industry to tap the billions of estimated barrels gas reserves that lie beneath the US.

Click here to view an interactive map showing how horizontal drilling has displaced traditional vertical drilling since 1997 in the Barnett Shale.

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