Friday, 18 February 2011

Historical Natural Gas Production in the US

I've been having a conversation with a fellow peak oiler about historical natural gas production in the USA and I decided to have a look at it.
First of all, according to dieoff theory, once a resource peaks the only way to extract any more is at lower EROEI and lower EROEI and since our inputs are also declining we reach a point of diminishing returns and at that point peak is reach and nothing can be done to reverse the decline in supplies. So let's take a look at the graphs. This is the graph of US natural gas production since 1970 leading up to 2000.

And this is the graph of natural gas production from 1990 project out
to 2035 from the EIA.

Now what you can see from these graphs is the following:
The highest point of production (i.e. the "peak") in the first graph was in 1970 at 21TCF and subsequently production dropped to about 16TCF in 1985. Production bounced around 16-18TCF until abut 1990.
On the second graph you can see that production continued bouncing around 16-18TCF (not including imports from e.g. Canada) until 2000 when conventional supplies started on a downslope (aka the "final" peak and decline).

Five years later, however, you can see that the decline has been reversed by the addition of shale gas (which has been enabled by the development of fraccing technology to liberate natural gas from the massive shale deposits). In 2010 we are slightly above the 1970 domestic production of natural gas. Including imports from Canada, the US consumption is currently running about 3TCF higher than the peak in the 1970s.

Now if you were a doomer you might turn round and say that it's hardly a mark of success that it has taken us 41 years to return to the same production levels we had in 1970.

On the other hand, any alleged peak is supposed to be final and lead to the collapse of industrial civilization.

But, the doomers might say, you're still doomed because we can barely get back above 1970s levels even with increased production.

Not so. In order to keep the wheels turning, we only need to cover the percentage decline from oil. If we look at transportation as the main consuner (2/3 of all oil usage) then we run about 12 million barrels per day consumed in the US. If we don't try to increase mpg and don't use any other substitutes at 5% decline rate (brutal by anyone's imagination and likely decline rates are in the region of 2%) that means we have to replace 0.6 million barrels per day in the USA to keep the fleet running.
Using the conversion factor of 1 million cubic feet of natural gas equals 172 barrels of oil. So to replace 600,000 we need 3488 mmcf which is 3.5 TCF. If we look at production from 2005 to 2010 we increased production about 5 TCF so that means we can do an increase of 1 TCF per year.

So we're short using all the assumptions and taking the position that 1 TCF increase per year is the maximum increase we can do.

If we ignore imports from Canada which could probably boost production, we're short about 2.5 TCF per year increased production to replace the lost 0.6 million barrels per day oil supplies. We'll also ignore the increasing domestic US oil production from the bakken and similar formations and also ignore increasing Canadian oil production from the oil sands.

The current US fleet runs about 15 mpg. Can we increase efficiency by 3 times?
Yes we can.

So how many increased fuel efficiency vehicles do we need combined with a yearly increase in production of natural gas of only 1TCF when what we need is 3.5 TCF if we did nothing?

We need to increase the fuel efficiency equivalent to the decline rate.
That means if 5% of our fleet no longer has any oil to fuel it, then we need to increase the fuel efficiency of that component of the fleet in order to be able to utilize the available increased natural gas production.

The current US fleet is about 220 million vehicles. 5% of the fleet is therefore 11 million vehicles.

What is the current annual market in new US vehicles? The answer is about 18 million vehicles.

So clearly we are already buying enough vehicles every year.

My conclusion is the following: If we ignore increasing domestic oil supplies from the bakken and other similar formations, ignore increasing oil production from the Canadian oil sands, then we can maintain the US fleet at the current size with no interruption if half of new vehicles purchased each year have a fuel efficiency rating of 45 miles per gallon and are converted to natural gas.

Of course we also have the facility for some of those vehicles to be hybrids or diesel or electric, so we don't really need to convert 10 million vehicles a year to high fuel effiency.


Anonymous said...

Very interesting

It is also important to note that US gas production keep rising (since 2010 levels are a little bit above those of the 1970tes).

One should also remember that future technological breakthroughs may lead to even greater production output. :D

Weaseldog said...

Great Post! You did a fine job here!

I'll be working on my rebuttal tomorrow. Got a full plate today.