Peak Oil Task Force Report - City of Bloomington - State of Indiana

APPENDIX III
NATURAL GAS: PLENTIFUL – AT LEAST FOR NOW
WHEN WILL IT PEAK?
As recently as 2005, natural gas production levels in North America were stagnant or
declining, and it was beginning to appear that they had peaked. This was significant
because, while natural gas elsewhere in the world, particularly in the Middle East and
Russia, is still plentiful, transporting it to the United States presents a problem: in its
ordinary gaseous state, it cannot be carried across the ocean in bulk tankers. Transoceanic
shipment of natural gas requires that the gas be super‐cooled and liquefied, then shipped in
special tankers. These tankers require special terminals for loading and unloading. With a
potential natural gas shortage in North America looming on the horizon, substantial
investments were made to construct liquefied natural gas (LNG) shipping and terminal
facilities.
In the past few years, the North American natural gas situation has changed rather
dramatically. Instead of going down, production was, until the current recession drastically
curtailed demand, actually going up. This development is mainly due to new drilling
technologies – horizontal drilling, and hydraulic fracturing (“fracing”). Fracing is a
particularly noteworthy development that has made it possible to recover substantial
amounts of gas from shale formations previously considered unsuitable for drilling.
A non‐profit organization of volunteer experts called the “Potential Gas Committee” (PGC)
regularly reviews the U.S. natural situation and issues a biennial assessment of supplies. In
June, 2009, the PGC announced its latest report and declared an “unprecedented increase
in magnitude of [the] U.S. natural gas resource base” amounting to an increase of over 25%
from the previous report. The revised estimate of the “resource base,” 1,836 trillion cubic
feet (Tcf) is “the highest resource evaluation in the Committee’s 44‐year history,” and the
committee pegged the nation’s “total available future supply” at 2,074 Tcf. The committee
Report of the Bloomington Peak Oil Task Force 238