Major US supply role seen for unconventional gas

Sam Fletcher
Senior Writer

DENVER, Dec. 14 -- Over the last 20 years, unconventional natural gas in the US has grown from "just modest expectations back in the early 1980s" to become one of the dominant forces of gas supply, said Scott R. Reeves, executive vice-president of Advanced Resources International Inc., Houston, at a 2-day conference in Denver.

"Over that time, coalbed methane (CBM) and gas shale in particular came from being viewed as scientific curiosities to being two of the major contributors to US natural gas supply today. As we look forward over the next 20 years, we expect unconventional gas will play an increasing role towards supplying US domestic gas," said Reeves Dec. 13, the first day of the meeting sponsored by Strategic Research Institute, New York.

Unconventional gas resources include tight gas sands "that some have described as simply at the low-quality end of conventional gas resources. However, they are also unconventional trapping mechanisms," Reeves said.

US gas supplies increased overall to 19.4 tcf in 2003 from 19.2 tcf in 2000. Yet conventional gas production declined in that period, while unconventional gas production increased by 1 tcf. Production of tight sands gas increased from 4 tcf to 4.6 tcf, while CBM production rose from 1.4 tcf to 1.6 tcf.

"The largest percentage increase was in gas shale, from 0.4 to 0.6 tcf, largely coming from the Barnett shale, the most active and by far the largest producing gas shale play in the US today," Reeves said.

"From the early 1980s to the early 1990s, what spurred the development of CBM and the production increase was the combination of performance-based incentives in the form of the Sect. 29 [federal] tax credits, as well as research under both the Department of Energy and the Gas Research Institute," he said. Both programs have since ceased.

"Yet we still see tremendous growth in production. This demonstrates the commercial viability of CBM without any types of incentives today," Reeves said. "We see in the future perhaps new technologies such as enhanced CBM recovery opening up some of those basins of CBM that today cannot be commercial on a stand-alone basis of primary production because perhaps they are too deep or permeability is too low."

Gas shale slower
Production from gas shale, too, began in the early 1980s at low rates with the help of Sect. 29 credits and research support from DOE and GRI.

However, he said, gas shale "did not grow as fast as CBM; it's a little behind the curve. Still, there was growth in gas shale production from 1992 through today, commercial without incentives." US gas shale production grew from 65 bcf in 1980 to 600 bcf in 2003.

For gas shale, said Reeves, "We see perhaps not anything like enhanced CBM as being a driver of commercial production, but really since gas shale's development and plays are much less mature, we see the growth there to be in new plays that have not yet been developed and gas shales that have not yet been fully assessed today."

Various forecasters agree that unconventional gas production in the Lower 48 will continue to increase and will be one of the primary drivers and suppliers of the future US gas market.

"We're seeing a decline in CBM production from the San Juan basin, which historically has been the big granddaddy of production, but Powder River basin production is continuing to increase, and other basins are coming on stream. So CBM production is expected to continue to grow for the foreseeable future," Reeves said.

The National Petroleum Council's 1999 assessment of technically recoverable gas resources said 633 tcf was expected to come from future new fields. More than half of that, some 356 tcf, was projected as coming from tight sands (230 tcf), CBM (74 tcf), and gas shale (52 tcf).

"So yes, there's a sizeable resource out there," Reeves said.

Of the 12 largest US natural gas fields listed by the Energy Information Administration, 9 are unconventional, he noted. Unconventional gas "can be large plays and company-maker plays," Reeves said. "Both the DOE and the National Petroleum Council have found that unconventional gas resource bases are very large. The tight gas sands are by far the largest resource base, followed by CBM and lastly gas shale."

In 1990, the US Geological Survey assessed the Barnett shale at 1 tcf of potential gas production.

"It has produced considerably more than that today," Reeves said. "By 1998, our company along with USGS relooked at that [1990] assessment, and we bumped it up to 10 tcf. This play has not produced that much but is expected at this point to produce more than that. Nevertheless in 2003, the NPC only assessed the Barnett shale at 7 tcf. Earlier this year, the USGS came out with another assessment of 26 tcf."

Such assessments grow as experience in a particular play and basin grows and understanding of the reservoir and technology develop, Reeves said.

"Many of these unconventional gas resources are assessed low, particularly in the early stages of their development," he said.

'Game-changing' technology
Cavitation cycling, a fracture method using compressed air or foam in the San Juan basin, was cited by Scott as one of the previous "game-changing technologies" developed for unconventional gas production. Others included multiple-zone completions in the Black Warrior basin, reservoir simulation, and horizontal drilling. Many of the same technologies were successfully applied in gas shale development, along with nitrogen fracs and water fracs.

There also was a shift in thinking when the industry began developing CBM from the shallow, low-rank coal formations of the Powder River basin, which many in the industry at first shrugged off, said Reeves.

Game-changing technologies of the future could include the next-generation "sweet spot" exploration techniques that are applied before the well is spudded. "What you really want to know is where to drill in the first place," Reeves said.

"Natural fractures are going to be the key to and have been the key in the past to commercial production from gas shales, tight sands, and CBM. The cleat system is not sufficient in coal in and of itself to provide commercial [production] rates. You have to have an overlying natural fracture system that is open for these things to be commercial," he said.

"What you're really looking for is areas of enhanced fracturing, perhaps fault-related fracturing or flexure-related fracturing," said Reeves.

Other new development techniques could include intensive resource development with improved drilling and completion practices, intelligent optimization of operations, and enhanced recovery.

Tomorrow's giants
As for the emerging plays that could be tomorrow's giants, Reeves said, "We don't know." However, he noted that there is "not a lot of development yet" in northern and central Appalachia, among coal deposits along the Gulf Coast, and in Green River basin.

"The Green River basin contains 314 tcf, by far the single largest resource base of CBM. We think that's going to be a place of increasing activity. The coals are very deep there and will require special technology. We think something like enhanced CBM technology will help unlock that," said Reeves.

Enhanced CBM technology could also prove effective in the high-rank tight coals of Appalachia, he said.

The Gulf Coast features "a low-ranked coal that's been overlooked in the past. Everyone has been focused on the Powder River basin, but we think [the Gulf Coast] is going to be an area of increasing activity. You see a not-insignificant amount of activity in leasing and pilot projects in north Louisiana today," he said.

Potential gas shale plays are being identified "all over the US," said Reeves, but there is not a lot of international gas shale activity. However, CBM development is widespread around the globe.

Contact Sam Fletcher at

Related Articles

Emissions from liquid unloadings vary by region

02/10/2015 A recent study by the University of Texas at Austin and the environmental testing firm URS indicated that a small percentage of wells account for t...

DOE to store CO2, recover CBM simultaneously

08/06/2008 In a new program, the US Department of Energy and its Southwest Regional Partnership recently began to inject carbon dioxide into a large coal bed ...

XTO acquires $1 billion in properties, leasehold

02/22/2008 In more than 25 transactions, Fort Worth independent XTO Energy has entered into agreements with various parties to acquire producing properties in...

Plains E&P to acquire Pogo in $3.6 billion deal

07/17/2007 Plains Exploration & Production Co. has agreed to acquire Pogo Producing Co. in a cash and stock deal valued at $3.6 billion.

CNX Gas to buy Peabody's CBM, gas rights

06/14/2007 CNX Gas Corp., Pittsburgh, is buying the coalbed methane and gas interests of Peabody Energy Corp., St. Louis, for $66.5 million.

Dominion sells oil, gas assets in deals totaling $6.5 billion

06/04/2007 Loews Corp. and XTO Energy Inc. agreed to buy certain oil and natural gas producing properties in two separate deals from Dominion Resources Inc. f...

Barnett spars with Hugoton for top US gas field

05/08/2007 Newark East field in North Texas, center of the Mississippian Barnett shale play, was Texas's largest gas-producing field in 2006 and could become ...

BP to boost CBM production in San Juan basin

02/16/2007 BP PLC reported it plans to invest as much as $2.4 billion over the next 13 years to boost by more than 20% its 425 MMcfd share of coalbed methane ...

CFTC expected to bring action against BP in futures probe

12/14/2006 BP PLC expects the US Commodity Futures Trading Commission staff to recommend that a civil enforcement action be brought against the company over a...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts

The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.


On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected