By Andy May – Re-Blogged From WUWT
A few news items from The Shale Gas News, by Bill desRosiers of Cabot Oil & Gas. The main paragraphs below are adapted from desRosiers, but I’ve added some detail. Things are looking very good for the U.S. oil, gas and coal industries.
- U.S. crude oil and natural gas production increased in 2017, with fewer wells. The total number of wells producing crude oil and natural gas in the United States fell to 991,000 in 2017, down from a peak of 1,039,000 wells in 2014. This recent decline in the number of wells reflects advances in technology and drilling techniques. EIA’s updated U.S. Oil and Natural Gas Wells by Production Rate report shows how daily production rates of individual wells contributed to U.S. total crude oil and natural gas production in 2017.
The well efficiency gains, in part, reflect an increase in the proportion of horizontal wells. The number of vertical wells decreased from 940,000 in 2014 to 864,000 in 2017. The number of horizontal wells increased from 99,000 in 2014 to 127,000 in 2017, an increase of 28%. This is important since only one percent of vertical wells produce 100 barrels of oil per day (BOPD) or more, but 30% of horizontal wells do. Typically, a horizontal well costs about twice as much as a vertical well to the same reservoir.
U.S. oil production grew from 10 million BOPD to 11 million BOPD between December 2017 and July 2018. Over the same period natural gas production grew from 97 BCF (billion cubic feet) to 100 BCF. Figures 1, 2, and 3 show the total number of wells drilled and the total oil and natural gas production.
Interior credits increased fossil fuel production for jump in revenue from federal lands. Increased oil and gas production, as well as expanded access on public lands, are responsible for a surge in the Interior Department’s economic revenue this year, the administration said Wednesday. Production activities on Interior land under the Trump administration helped generate $292 billion in economic output during fiscal year 2017, a big increase of $400 million from the previous year, according to an economic report released by the Interior Department.
The increase is credited to the Interior Departments regulatory reforms and firming prices which resulted in an increase in oil and gas extraction on public lands. Public land access is much easier for surveyors, hunters and fishermen as well. The department, under Secretary Ryan Zinke and President Trump, increased its revenue from oil and gas royalties by nearly one billion dollars. The department estimates that their regulatory relief programs will save the economy $3.8B over time.
Nationally, the number of oil and gas development wells on federal and tribal lands increased 85% between fiscal year (FY) 2016 and FY 2017. This was mostly due to higher prices, but the easing of regulations and efforts to speed up permitting undoubtedly played a role. Coal production increased 12% on federal lands, about twice as fast as for the country as a whole.
IHS: U.S. to be net exporter of petroleum by 2020s. A new report says the U.S. will become a net exporter of petroleum by the early 2020s, the first time since 1949. Research firm IHS Markit says continued growth in U.S. production of crude oil and natural gas liquids will push the country toward becoming a net exporter of petroleum, which the firm says includes refined products like gasoline.
Crude oil production has risen from 5 million BOD in 2007 to almost 12 million BOD today. Crude oil imports have decreased from 10 million BOD in 2007 to about 7 million BOD.
Cheniere Bets $15 Billion on World Gas Demand Despite Tariff. On November 14, Cheniere started producing liquefied natural gas for the first time at their new Corpus Christi, Texas plant.
The first U.S. LNG tanker, since a 10% tariff was imposed on U.S. natural gas, was delivered to China earlier this week and sales to China are up 50% year-over-year. If China raises the tariff to 25%, as they have threatened to do, sales may drop.
The U.S. will have a total of six LNG export terminals operating in less than two years, making the U.S. the third largest LNG supplier after Qatar and Australia.
India Ready To Import More U.S. Oil And Gas. India is ready to import more crude oil and liquefied natural gas (LNG) from the United States to expand bilateral trade, India’s Foreign Secretary Vijay Gokhale said on November 14. Speaking after a meeting between India’s Prime Minister Narendra Modi and U.S. Vice President Mike Pence on the sidelines of an ASEAN summit in Singapore, Gokhale said, commenting on the topics discussed: “There was a lot of discussion on energy, this is a new sector in the Indo-US relations. We have begun importing oil & gas from United States.”
India is building 11 LNG import terminals over the next seven years and plans to triple LNG imports. It wants to more than double the share of natural gas in its energy mix. India is pushing for more compressed natural gas (CNG) powered trains, scooters and motorcycles.
Price of NatGas Spikes to Highest Level in 4 Years – $4.84/Mcf. The price of natural gas is above $4.72 and has been rising rapidly. The primary reason, according to news reports and interviews with traders, is low stockpiles combined with short-term weather forecasts for colder weather.
The future looks bright for the United States fossil fuel industry. Because of our innovative shale gas and oil technology and infrastructure and increasing demand in India, China and the rest of the world we will soon be energy independent and a significant exporter of fossil fuels.
Our hard-won shale technology will eventually make its way overseas, but for now our environmentalist friends are helping us keep it to ourselves, bless their hearts.