Natural Gas Production Up in First Half of 2008
U.S. natural gas production grew by 9% between the first 7 months of 2007 and the first 7 months in 2008. To put this growth in perspective, U.S. natural gas production was essentially flat for 9 years from 1998 through 2006, before rising by 4% in 2007. Thus, the growth in 2008 so far appears to mark an historic shift in U.S. natural gas production. See the graph below.
Data from Energy Information Administration 10/29/08
The increased production in the U.S. meant that the country has needed to import less natural gas in 2008 than in 2007, especially in the form of LNG (Liquid Natural Gas). For the first 7 months of 2008, LNG imports fell by 64% compared with the same period in 2007, continuing a trend of reduced imports that started in the second half of 2007. Additionally, the U.S. added more than twice as much in proved reserves as it produced in 2007 and ended the year with the highest total proved reserves since at least 1977, when EIA first estimated proved reserves. The record additions mostly reflect the rapid development of unconventional natural gas recourses made up of coal bed methane and resources like shale and tight, low permeability, formations that use advanced technologies.
This information does not bode well for Governor Palin’s proposed natural gas pipeline, which would deliver natural gas from Prudhoe Bay to markets in Canada and the U.S. by way of some of the earth’s most hostile and remote terrain. As she stated, “We’re building a nearly $40 billion natural gas pipeline, which is North America’s largest and most expensive infrastructure project ever, to flow those sources of energy into hungry markets.” Not only is this project very expensive, it seems that it was crafted by Palin’s team to favor only a few independent pipeline companies and ultimately benefited only one winner, TransCanada Corp., with which she had close ties. Possibly, with new production and proven reserve numbers there will be a better way to spend the $40 billion.