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MIT Sees Natural Gas in Your Future…
On Friday, June 25, the Massachusetts Institute of Technology (MIT) released a preliminary study entitled “The Future of Natural Gas” that explores the impact natural gas will have on meeting the country’s long term energy needs. This initial study focuses on power generation and transportation as “these sectors represent the two most significant opportunities for additional market share for natural gas.” The final report, however, will cover all demand sectors including residential and commercial markets. As you might imagine, we especially look forward to seeing what MIT finds with regard to this critical sector.
MIT found that natural gas usage will double—increasing from 20 to 40 percent—over the next several decades, and that the “versatility of natural gas and its environmental performance relative to other fossil fuels enhances its desirability in a carbon-constrained environment, particularly in the near to midterm.” The MIT team of researchers was led by Ernest Moniz, a physics professor and director of the MIT Energy Initiative.
This study has been two years in the making, but even before this research was deep underway, MIT was a proponent of natural gas, and they are currently working on developing new ways to employ natural gas to generate power.
We agree that there are a lot of great opportunities to put natural gas to greater use to more cleanly meet our country’s energy needs. We look forward to the final report.
Natural gas: an abundant and diverse resource
Recently, there has developed an aura of optimism around the recognition that the United States and North America, in general, hold an abundant and diverse resource of natural gas – one that may be an important part of a future lower-carbon domestic energy economy. Announcements of new assessments reflecting strong growth in natural gas resource potential have come from numerous groups including the Potential Gas Committee (Colorado School of Mines) and have been exciting news for policy makers seeking homegrown and secure solutions to our energy puzzle.
With optimism comes naysayers and thank goodness for them all. Contrary views cause us to examine our core beliefs and offer an opportunity to explain them in language citizens and policy makers can understand. For example, the Potential Gas Committee (PGC) noted in June that their most recent view of natural gas future supply in the United States exceeded 2,000 trillion cubic feet (tcf), including proved reserves (published by the Energy Information Administration). The assessment is the largest ever published by the group and founded on current technology and foreseeable economics and, in addition, comes from a non-political spectrum of experts that actually work in the areas they are evaluating.
The PGC as a group has been assessing natural gas resources for over 40 years. Much of the resource optimism is centered on onshore natural gas shales and comes because technology has allowed these low porosity, low permeability, unconventional reservoirs to be produced. The committee does not say how and when the resources will be developed but offers a snapshot of potential based on their knowledge and expertise.
Regarding the shales specifically, they become an easy target for naysayers that believe the resource potential is not real and that their productive characteristics cannot meet the future attributed to the resource optimism. So, what is true? Something between naysayer and optimist perhaps?
The problem with arguing these points based on current decline curves, innate biases or even the most objective opinion is that they miss the point of resource development in this country. The fact is that more natural gas has been produced in the United States during the past forty years at a lower cost than any person could have imagined. It has occurred because of new resource plays, evolving technology to extract the gas, changes in energy economics and most importantly – new ideas.
Focusing on a single element of the resource story is dangerous and it is inherently self-limiting. Natural gas abundance in North America is predicated on diversity – not a single resource element. To meet its full potential in our energy economy, natural gas needs to be developed responsibly from onshore conventional and unconventional reservoirs (including shales, tight sands and coal seams). Creating infrastructure to bring arctic gas to lower-48 markets is also crucial and continuing to develop offshore gas supplies responsibly must be a part of our energy future.
Shales are a part of that future but only one element of the whole. To say that shales or coal seams or any other source of natural gas will not meet current expectations is as speculative as the opposite bookend that shapes these arguments. Those arguments will be resolved with time but one fundamental remains.
The outlook for natural gas future supply in the United States has grown with time not precipitously declined. Sources of gas have been broadened and a partnership between private investment, government and creative ideas have prevailed and will continue to prevail as the primary factors responsible for delivering a low-carbon fuel to our homes, industries and businesses.
Natural Gas Supply Remains Bullish
Because AGA represents member utilities that deliver natural gas to 169 million Americans, we have a vested interest in the country’s supply picture. So we were pleased when our resident supply expert, Chris McGill, told us that in 2009 natural gas supply remained “bullish,” and is likely to remain so for the foreseeable future. This trend is a result of the influences of unconventional resources such as natural gas from shale and tight sands.
Based on numbers reported to the SEC, in 2009 it appears the “known reserves” of natural gas in the United States increased for the eleventh straight year, now approaching 250 trillion cubic feet– the highest level in more than 35 years. This record number is good news for natural gas customers, signifying that our country can continue to rely on natural gas as a staple of its energy mix.
Interestingly, BP, the largest U.S. producer of natural gas in 2009, produced less than five percent of the national total for the year – meaning the natural gas production industry remains competitive. Other large producers and reserves holders include household names such as ExxonMobil, yet, significant volumes of gas are produced by others such as Chesapeake Energy, Devon, Anadarko and EOG Resources. In fact, thousands of other large, mid-size and small producers provided the bulk of domestic natural gas to local distribution companies last year.
For a breakdown of the numbers and further analysis, take a look at the report.
True Blue Natural Gas Blog from the American Gas Association (AGA)- Beating the Heat with Summer LIHEAP Action Day
- “The Future of Natural Gas,” Meet Dr. Ernest J. Moniz, MIT
- Renewable Gas – Vision for a Sustainable Gas Network
- The Natural Gas Revolution
- The natural gas grid…the really smart grid
- Meeting the Route 66 guys
- Drilling 101
- ‘Drive To Inspire’ Rides Through Tulsa
- Congratulations to the AGA Awards of Merit Recipients
- Summer LIHEAP Action Day
