Peak gas is the point in time at which the maximum global natural gas production rate is reached, after which the rate of production enters its terminal decline. Natural gas is a fossil fuel formed from plant matter over the course of millions of years. It is a finite resource and thus considered to be a non-renewable energy source.
The concept of peak gas follows from M. King Hubbert's Hubbert peak theory, which is most commonly associated with Peak oil. Hubbert saw gas, coal and oil as natural resources, each of which would peak in production and eventually run out for a region, a country, or the world. Since Hubbert's initial predictions in 1956, "the proper application of ever more powerful statistical techniques has reduced much of the uncertainty about the supply of oil and natural gas," and shown Hubbert's use of an exponential decline model to be statistically adequate in explaining real world data.
- 1 Gas demand
- 2 Gas supply
- 3 Peak gas for individual nations
- 4 World peak gas
- 5 See also
- 6 References
- 7 External references
The world gets almost one quarter of its energy from natural gas. The consumption of natural gas has nearly doubled in the last 30 years. The most important energy agencies in the world are forecasting increases in natural gas demand in the next 20 years. The largest increments in future gas demand are expected to come from developing countries.
New gas discoveries
According to David L. Goodstein, the worldwide rate of discovery peaked around 1960 and has been declining ever since. Exxon Mobil Vice President, Harry J. Longwell places the peak of global gas discovery around 1970 and has observed a sharp decline in natural gas discovery rates since then. The rate of discovery has fallen below the rate of consumption in 1980. The gap has been widening ever since. Declining gas discovery rates foreshadow future production decline rates because gas production can only follow gas discoveries.
Dr. Anthony Hayward CCMI, chief executive of BP stated in October 2009 that proven natural gas reserves around the world have risen to 1.2 trillion barrels (190 km3) of oil equivalent, enough for 60 years' supply if consumption is non-increasing, and that gas reserves are trending upward. A similar situation exists with oil reserves in that they have increased despite the actual declines of worldwide discoveries for decades and despite increases in consumption, although industry veterans such as BP’s former Chief Petroleum Engineer Jeremy Gilbert, have suggested that this growth of oil reserves "results largely from distortions created by the..reporting rules of the US Securities and Exchange Commission" and that "even this illusory growth is unlikely to last."
Peak gas for individual nations
Italy's gas consumption is presently third-highest in Europe, behind only Germany and the United Kingdom. Gas consumption is growing at a steady rate, and gas consumption in 2001 was fully 50% greater than it was in 1990.
Italy’s major oil and gas company is Eni. Formerly state-owned, it was privatized during the 1990s, but the government still retains around one-third of the shares. Natural gas reserves in Italy were 164 billion m3 at the beginning of 2007. Natural gas production in 2005 was 11.5 billion m3, while consumption was 82.6 billion m3. The difference was imported. The primary sources of imported gas are Algeria, Russia and the Netherlands. Among European countries, Italy is the fourth largest oil consumer after Germany, the UK and France, and the third largest natural gas consumer after Germany and the UK.
The Netherlands government has stated that peak gas occurred in 2007-2008 and the country will have become a net importer of natural gas by 2025.
Natural gas in Romania was discovered in 1909 in the Sărmăşel area. In 1917, Turda became the first European town lit up with natural gas. Maximum production of 29.8 Bcm was achieved in 1976. Today, gas provides about 40% of the country's energy needs.
Gazprom, Russia's state-controlled gas monopoly, is a firm which holds 25% of the world's gas reserves. Gazprom produces the bulk of Russia's gas and exports more than 25% of West Europe's gas needs. According to Gazprom CEO Alexei Miller on July 4, 2008 Russian gas output is no longer growing but will remain flat for the years 2007 through 2009. But production has been flat since 2006. In 2006 gas produced at 556 BCM/y and it declined in 2007 to 548.5 BCM/y, or 1.3% less than in 2006.
UK gets its natural gas almost entirely from the North Sea. The North Sea gas field peaked in 2000 and has been falling quickly since. Production in 2004 was 12% down from the peak.
In 1956, Hubbert used an estimated ultimate recovery (EUR) of 850 trillion cubic feet (24,000 km3) (an amount postulated by geologist Wallace Pratt) to predict a US production peak of about 14 trillion cubic feet (400 km3) per year to occur "approximately 1970". Pratt, in his EUR estimate (p. 96), explicitly included what he called the "phenomenal discovery rate" that the industry was then experiencing in the offshore Gulf of Mexico.
US gas production reached a peak in 1973 at about 24.1 trillion cubic feet (680 km3), and declined through 1976. But even greater new discoveries in the offshore Gulf of Mexico than anticipated, and development of "unconventional reserves", proved Pratt's EUR estimate to be too low as US gas production rose again.
Just as gas was peaking in 1971, Hubbert revised his peak gas estimate based on updated reserve information. He revised his estimated ultimate recovery upward to 1,075 trillion cubic feet (30,400 km3) for the lower 48 states only, and predicted: "For natural gas, the peak of production will probably be reached between 1975 and 1980." Gas production for the lower 48 states did peak in 1979, and declined for several years, but rose again, and once more Hubbert's assumed EUR of 1,075×1012 cu ft (30,400 km3) proved to be somewhat low, as actual lower 48 state production from 1936 through 2007 has already exceeded 1,122×1012 cu ft (31,800 km3), which is 4% higher than the estimate of 1,075.
Recent US peak predictions
Doug Reynolds predicted in 2005 that the North American gas peak would occur in 2007 The forecast was revised in 2009 to include Southern Canada, and the combined US Lower 48-Southern Canadian peak is expected in 2013
Although Hubbert had acknowledged multiple peaks in oil production in Illinois, he used single peak models for oil and gas production in the US as a whole. In 2008, Tad Patzek of the University of California rejected the single-peak model, and showed the multiple peaks of past US gas production as the sum of five different Hubbert curves. He concluded that new technology has more than doubled gas reserves. His figure 15 shows gas production declining steeply after a probable peak in known cycles in 2008. However, he refrained from predicting a date after which gas production would begin terminal decline, but noted: "The actual future of US natural gas production will be the sum of known Hubbert cycles, shown in this paper, and future Hubbert cycles." and warned: "The current drilling effort in the US cannot be sustained without major new advances to increase the productivity of tight formations."
According to Western Gas Resources Inc., the North American peak happened in 2001. In 2005 Exxon's CEO Lee Raymond said to Reuters that "Gas production has peaked in North America." The Reuters article continues to say "While the number of U.S. rigs drilling for natural gas has climbed about 20 percent over the last year and prices are at record highs, producers have been struggling to raise output." North American natural gas production indeed peaked in 2001 at 27.5×1012 cu ft (780 km3) per year, and declined to 26.1×1012 cu ft (740 km3) by 2005, but then rose again in 2006 and 2007 to a new high of 27.9×1012 cu ft (790 km3)in 2007 This would make the 2007 figure 1.45% higher than the 2001 figure, for an average annual increase of 0.24% per year during 2001-2007.
In December 2009 the US Energy Information Administration (EIA) projected US marketed gas production will have reached a first peak at 20.60×1012 cu ft (583 km3) in 2009, decline to 18.90×1012 cu ft (535 km3) in 2013, then rise again to 23.27×1012 cu ft (659 km3) in 2035, the final year of their projection, for an average annual rate of increase of 0.47% per year during 2009-2035 In its Annual Energy Outlook 2010 released in May 2010, EIA projected growth from 20.6×1012 cu ft (580 km3) in 2008 (same amount as 2009) to 23.3 trillion cubic feet (660 km3) in 2035 in the Reference case, with Alternative case estimates ranging 17.4 to 25.9×1012 cu ft (730 km3) in 2035. These represent productions of average annual growth rates between -0.63% (net decline) and 0.85% in the alternate cases, and 0.46% in the reference case.
North American natural gas crisis
The natural gas crisis is typically described by the increasing price of natural gas in North America over the last few years, due to the decline in indigenous supply and the increase in demand for electricity generation. Indigenous supply in the U.S. fell from 20,570,295×106 cu ft (5.824859×1011 m3) in 2001 to 18,950,734×106 cu ft (5.366250×1011 m3) in 2005, before rising again in 2006 and 2007.
Former Federal Reserve Chairman Alan Greenspan has suggested that a solution to the natural gas crisis is the import of LNG. New or expanded LNG terminals create tough infrastructure problems and require high capital spending. LNG terminals require a very spacious—at least 40 feet (12 m) deep—harbor, as well as being sheltered from wind and waves. Typically, to attain "well-sheltered" waters, suitable harbor sites are well up rivers or estuaries, which are unlikely to be dredged deep enough. Since these very large vessels must move slowly and ponderously in restricted waters, the transit times to and from the terminal become costly, as multiple tugboats and security boats shelter and safeguard the large vessels.
Estimates of total reserve base
The Potential Gas Committee, a non-profit group at the Colorado School of Mines, estimated US natural gas resources to be 1,525 trillion cubic feet (43,200 km3) in 2007 (86 times current annual consumption) and in 2009 raised their estimate again to 2,247 trillion cubic feet (63,600 km3) in 2009 (almost 100 times current annual consumption). The large increase over previous years' estimates was attributed to a surge in natural gas drilling and exploration spurred by a rise in prices and new technology allowing production from once uneconomic formations, such as shale and coal seams.
World peak gas
In 2002, R.W. Bentley (p. 189) predicted a global "decline in conventional gas production from about 2020."
The US Energy Information Administration predicts that world gas production will continue to increase through 2030, with a total increase of almost 50%, and an average annual rate of increase of 1.6% per year, for the 2006-2030 period.
- 2004 Argentine energy crisis - an example of the effects of a gas shortage
- Association for the Study of Peak Oil and Gas (ASPO)
- Hubbert peak theory
- Applying Hubbert peak theory to natural gas
- ^ Bulls now talking up "Peak Gas" as new cause for long-term concern, Natural Gas Week, 03-06-06
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