Is U.S. Natural Gas Headed Toward Excess Supply? (Electric Power Research Institute)

[jpak]

http://mydocs.epri.com/docs/CorporateDocuments/SectorTopics/topic-0307-NaturalGas.html

Several recent analytical studies, sponsored by EPRI, indicate that there is a plausible scenario that gas supplies will increase and that excess gas supplies could emerge over the intermediate-term, perhaps within two years.

This relatively plausible scenario represents a significant departure from the popular trade press and has a number of implications for both the power and natural gas industries. Chief among these implications is the likelihood for price moderation and the impacts that such price moderation could have on various facets of both industries.

In the United States, natural gas is used for nearly 20% of electric utility generation, yet it accounts for 55% of the industry's entire fuel expense ($50 billion out of $91 billion in 2005). Over 200,000 MW of gas-fired capacity was added between 2000 and 2006. The majority are combined-cycle units. While those new units have operated at only 33% capacity utilization (annual averages for the past three years), the power sector's demand for gas has been growing as more and more units have gone online.

Presentations on the studies of natural gas supply were made to the EPRI-EEI Annual Power and Fuel Supply Seminar late last year. In addition, the studies are summarized in a recent issue of the EPRI newsletter Energy Markets and Generation Response.

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[Xipe Totec]

1. Short answer - No.

Been here, done this, have the scars to prove it.

[Dogmudgeon]

2. The interesting small print:

"{There has been a}n industry shift to developing more unconventional resources (i.e., shales, tight sands, and coalbed methane). The unconventional resources have turned out to be much more prolific than was imagined even a decade ago."

Good news, or bad? If this is all EPRI says it is, we could be spared a sudden crash -- but natural gas is a net greenhouse gas increasing energy source.

--p!

[greenman3610]

3. natural gas is a fossil fuel

but burning it efficiently is a huge improvement over coal.
Energy conservation is cheaper, quicker, and needs to be supported by
setting a price on carbon emissions,
through a licensing fee, or tax on carbon.

[Hoverflysr4]

4. Where?

Where is this gas coming form? From over seas? Than it does not solve our energy Independence from the middle east does it not? Even extracted in the U. S. natural gas is still a fossil fuel, the best of all others but still one we need to move away form over time.

[hunter]

5. There's plenty of gas, don't worry, be happy!

Buy a combined cycle power plant and a big SUV! It's the American way...

:shrug:

What I'm trying to figure out is what the gas rig count has to do anything... it seems to me a greater rig count is a negative indicator, because it takes more rigs to get the same amount of gas from diminishing reserves. A small coal bed operation with a few truck mounted rigs and compressors does not compare to one monster rig over a huge field.

If we stuck a pipe up every cow's butt to collect gas, how many "rigs" would that be?