Originally posted by BattleofBatoche
Actually natural gas which at one time was simply flared off into the atmosphere is now being used for heat and electricty. Natural gas is used in
heating the heavy crude & sludge during refining as well as used in Fort McMurray to extract oil from the tar sands. There are billion upon billions
of of cubic meters of natural gas in Canada alone. You can also retrieve three times the amount of natural gas from coal bed methane production then
gas trapped in sedimentary & carbonate rocks. Thus the amount of natural gas hasn't even been calculated yet. Natural gas is cheap versus oil and
this is the resource we are starting to use in increasing oil recovery. So it doesn't take 1 barrel of oil to get another barrel of oil. I'm
drilling a natural gas well as we speak in Fort Nelson B.C. for Encana. PLUS the water left over from coal bed methane production can be used for
injection wells in older oil fields.
Peak oil does not mean running out of energy sources--it means running out of CHEAP energy sources. There might be "billions and billions of cubic
meters of natural gas reserves in Canada", but it is costly to tap--and not sufficient to meet the projected 5 trillion cubic meter increase in North
American demand over the next five years (EIA report-2004).
The issue with Natural Gas is transportation. To maintain a higher EROEI, it must be transported via pipeline. To transport it overseas, it must be
liquified and sent in specially refrigerated ships, resulting in a significant energy loss & much higher cost. This means that the U.S. will look
first to meet it's NG demands on North America.
However, North American production is near peak--meaning that it is going to get increasingly more expensive to produce natural gas (decreasing
EROEI.) U.S. production is flat. Canadian production is increasing, however new Canadian reserves are scattered throughout untapped smaller
fields, which require a significant investment in infrastructure. There is more in the Artic regions of Canada & Alaska, and in the Rocky
Mountains--again requiring significant investment (and further legislative battles considering protected areas.) In addition, it takes anywhere from
5 to 7 years from the time contruction begins to actually begin producing output.
The Canadian Nat'l Energy Board & the International Energy Board are bearish on the yields of coal bed methane production and have revised the
projections for Canadian natural gas output significantly lower. The fields that initially showed promise apparently haven't been producing the
A 2003 National Petroleum Council report (U.S govt-sponsored w/ participation by all major energy company heads) on the future of natural gas
production makes clear that current & near-term production levels in the U.S. & Canada will not meet future natural gas demands. The report also
makes clear that the current supply level will remain level to about the year 2012, where the supply should begin to increase somewhat due to finally
reaping the benefits of Artic exploration, however not nearly enough.
Interestingly, the NPC report indicated that in order to keep prices stable in the face of flat supply for the next 7 years, it is vital that demand
is tamed via government-sponsored electricity and oil conservation programs--where are these? Also, the report indicates that they are counting on
firms relocating outside of North America as resources become costly---as a source of reduced energy demand... the implications of that assumption are
It is clear that the U.S. is going to meet its future natural gas demands via expensive liquified natural gas imports--from Russia, Iran, Qatar, Saudi
Arabia.... This means building more costly LNG regassification terminals and transport ships. As proof of the need to import LNG, there were two
LNG terminals operating in North America in 2001. At the end of 2003, two more opened and two have been approved. 8 are pending approval and 25 more
are in the planning stages. If the pipelines carrying natural gas from fields in Canada provided enough to meet North America's future demand (or
if oil production wasn't past it's peak), the move to LNG wouldn't be happening in such a big way.
Of course, politics as well as supply/demand will play a role in setting prices as all of the countries that house NG reserves are not surprisingly in
"problematic" regions. I don't see any indication that this will result in increased supply or a permanent reduction in energy costs in the
near-term or even longer-term.
The key to all this is that even if peak oil is BS, the world is behaving as if it is real. Little exploration and refinery construction indicates
that oil companies realize that there will be no return on their investment. There is a constant and escalating hum of news regarding oil and gas
deals and then political friction between the U.S., China, Canada, Russia, Ukraine, Nigeria, Iran, Syria, Venezuela, the Ivory Coast, the Sudan....
all of this percolating tension over increasingly scarce resources is eventually going to erupt into something.