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• Notes • Abstract • Introduction • The value of research • Production as a metric for research value • Oil • Natural gas • Meeting future U.S. energy demands • Production • Imports • Energy research • Summary • References
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Natural gas production in the United States was able to keep pace with consumption until the mid-1980’s (Figure 19 below). Natural gas imports have risen from around 4% in the mid-1980’s to more than 15% today (Figure 20 below). More than 3 Tcf of gas was imported in 2000, and that number is not anticipated to decrease. A large percentage of the U.S. imported pipeline natural gas comes from Canada. Liquefied natural gas (LNG), largely from Algeria and Trinidad (Figure 21 below), accounts for most of the remaining natural gas imports.
Figure 19: U.S. natural gas use through time.
Figure 20: Natural gas imports through time.
Figure 21: U.S. natural gas import and export picture.
Forecasts for annual U.S. natural gas production indicate natural gas supply will grow from 21 Tcf in 2001 to around 27 Tcf by 2015. Demand is projected to exceed 30 Tcf by 2015 (Figure 22 below). Whereas most of the U.S. natural gas to date has come from associated, high-permeability, and shallow offshore sources, around 50% of the produced natural gas in 2015 is forecast to come from deepwater, subsalt, and unconventional (tight gas, shale gas, and coalbed methane) sources.
Analysis of historical Federal and State exploration incentive programs and Federal and private investment in unconventional natural gas research indicates that the supply curves benefited greatly from natural gas research and the successful application of technology. The tight gas production curve shows a large positive increase in slope in 1985 following $165 million of combined investment in research by the DOE and GRI (Figure 23 below). Studies were focused on advanced stimulation technology, the greater Green River Basin, and the Piceance Basin. Combined with Federal and State tight gas production incentives, and investments in exploration and production by private sector operators, these investments in research have produced 11 Tcf of incremental natural gas to date.
The shale gas production curve shows a large positive increase in slope also in 1985 following more than $90 million of investment in research by the DOE in the prior decade (Figure 24 below). Another surge in production from shale gas followed $6 million of additional investment by GRI beginning in 1990. Studies were focused on the Antrim shales and the Appalachian Basin shales. Combined with investments in exploration and production by private sector operators, these investments in research have produced more than 2 Tcf of incremental natural gas to date.
The coalbed methane production curve shows a large positive increase in slope in the late 1980’s following $82 million of combined investment in research by the DOE and GRI in the preceding decade (Figure 25 below). Combined with Federal and State production incentives, and investments in exploration and production by private sector operators, these investments in research have produced nearly 5 Tcf of incremental natural gas to date, and show no evidence of slowing as coalbed methane expands its productive horizons to Texas.
To summarize, Federal and State production incentives, combined with tight gas, shale gas, and coalbed methane research, funded largely by the U.S. Department of Energy (DOE: $240 million over 25 years), the Gas Research Institute (GRI: $140 million over 20 years), and the private energy sector, resulted in nearly 18 Tcf of incremental gas production from 1970 through 2000. Investment in research had a positive economic value.
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