Tuesday, May 30, 2017

It Just Never Quits -- May 30, 2017 -- Gas Production From The Permian Basin Is Likely To Triple By 2020

From The Wall Street Journal: The oil play that could flood the natural-gas market.

Gas output from the Permian basin is likely to surge by 2020, rivaling production from Appalachian Marcellus.
The oil-rich Permian Basin is emerging as a major source of new natural gas, a development that could deepen an existing glut and pressure gas prices for years.

The West Texas region has become the most prolific spot for horizontal oil drilling and fracking. The new oil wells also produce natural gas, making it a nearly free byproduct that energy companies can then sell on top of the more-sought-after crude.

Gas production in the Permian Basin is likely to triple by 2020 from its 2010 levels, analysts say. The region is poised to rival new gas output from the Appalachian Marcellus Shale, the U.S.’s biggest gas-producing region.
The numbers:
Gas production in the Permian is expected to increase by 5.5 billion cubic feet a day from the end of last year to reach 12.5 billion cubic feet by the end of 2020, according to energy investment bank Tudor Pickering Holt & Co. in Houston.

The Marcellus, which has long been the fastest-expanding gas field, is likely to add 6.1 billion cubic feet during the same period, not much more than the Permian, though its total production will be two times that of Permian by 2020.
Two thoughts come to mind as I ponder the story and the graph:
  • the demise of solar/wind as a viable economic alternative
  • US exports
From wiki:
According to the International Energy Agency, the top 10 natural gas producers in 2013 produce two thirds of the total world production of 3,479 billion cubic meters.
In billion cubic meters (percent of global production):
  • US: 689 (19.8%)
  • Russia: 671 (19.3%)
  • Iran: 255 (5.9%)
  • Qatar: 161 (4.6%)
  • Canada: 155 (4.5%)
  • China: 115 (3.3%)
  • Norway: 109 (3.1%)
  • Netherlands: 86 (2.5%) -- see 2015 production numbers below
  • Saudi Arabia: 84 (2.4%)
  • Algeria: 80 (2.3%)
That was back in 2013 -- which seems like a lifetime ago, and things have changed greatly since then. 

Compare this with a pretty sophisticated analyst's view back in 2013 (which has now been archived). I linked it at this post, "Exhibit A." The comments, as usual, are priceless.

BP's natural gas production statistics for 2015 are here.
North America (+3.9%) recorded the largest growth increment, driven by continued strong increases in US output, while production in Europe & Eurasia declined by 0.7%, with large declines in the Netherlands and Russia. The Netherlands (-22.8%) recording the world’s largest decline. Large volumetric declines were also seen in Russia (-1.5%) and Yemen (-71.5%).
EIA's 2016 assessment here.

PeakOil's top eight, May 24, 2016. Comments are priceless.

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