Technology Focus: Gas Production Technology (November 2013)
Authors: Wilson Scott J. 
Published: February 2015

Technology Focus

The North American shale-gas boom has highlighted the differences that a few years and a few thousand miles can make. Only 5 years ago, the US was villainized for not signing the Kyoto Protocol, North American natural-gas prices were USD 14/million Btu, and horizontal multistage fracturing (HMSF) was an expensive old technology that was proving to be very profitable in the new price environment. Since then, US gas production is up 30%, but these new volumes coupled with a global recession drove prices down to USD 4. Even though exploration-and-production capital has shifted to oilier pastures, the promise of large volumes of cheap gas is bringing back consumers. Dow Chemical plans significant expansions and, with others, plans to spend USD 110 billion on new projects, creating thousands of high-paying jobs.

The US Energy Information Administration estimates combined cycle natural gas can produce electricity for USD 67/MW-hr, while wind, coal, and solar thermal come in at USD 87, 100, and 261, respectively. On the basis of this study, natural gas is the clear economic choice for electricity generation. But wait, there is a bonus; fuel switching to natural gas helped the US reduce CO2 emissions by 10%, while signers of Kyoto are struggling to meet less-aggressive pledges.

Environmentally conscious Tesla, Volt, or Leaf buyers may not realize they are indirectly supporting hydraulic fracturing for natural gas because the electricity they use is increasingly generated in gas-fired power plants. Unfortunately for everyone, roughly 75% of the energy available from natural gas is lost in the conversion to electric vehicle (EV) miles. Conversion to electricity, powerline losses, storage in the vehicle, then conversion back to mechanical energy make EVs less efficient than a simple compressed-natural-gas (CNG) -powered vehicle. CNG-fuelled vehicles convert raw energy directly into passenger/freight miles, and, with extensive gas-transmission grids, it is only a matter of time before we locate energy-efficient refueling stations along high-pressure pipelines.

Only a few time zones away, natural gas remains expensive and electrical brownouts loom where HMSF technology has not been applied or unfounded fears have curtailed development. Natural-gas prices in Europe are greater than USD 10 and are as high as USD 15 in Asia and parts of South America.

Will the rest of the world follow North America and use natural gas as a means to increase economic activity while meeting environmental goals? Only time will tell.

Recommended additional reading at OnePetro: www.onepetro.org.

OTC 23983 Simplified Approach for Estimating Pressure and Temperature Profiles for Gas Wells: Verification With Literature Case by Rodrigo A. Ruysschaert, University of Stavanger, et al.

SPE 158480 Impairment of Gas-Well Productivity by Salt Plugging: A Review of Mechanisms, Modeling, Monitoring Methods, and Remediation Techniques by Peter Aquilina, Senergy

SPE 161092 A New Approach to Reserves Estimation in Shale-Gas Reservoirs Using Multiple Decline-Curve-Analysis Models by Srikanta Mishra, Battelle Memorial Institute

SPE 165175 Novel Water-Shutoff Techniques in Gas Wells Using Petroleum External Solutions and Microemulsions by I.J. Lakatos, University of Miskolc, et al.