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77- www. energy- future. com 5.5- Technology: pushing boundaries But there's since been a big shift in mar-ket fundamentals, partly because the reces-sion has temporarily softened gas demand, but also because of spectacular exploration success in the country's extensive shale-gas deposits. Enterprising E& P companies - helped by favourable tax rates and these advanced drilling and fracturing techniques - have transformed the long- term possibili-ties for the US' energy mix. Shale- gas development is still in its rela-tively early stages, so estimates of the coun-try's potential vary. But mostly the numbers are big: its shale- gas basins may contain up to 22 trillion cubic metres of gas, says the Gas Technology Institute, a not- for- profit US research and development organisation for the gas industry. A report funded by the American Clean Skies Foundation ( ACSF) estimates that recoverable natural gas sup-plies in the US amount to 64 trillion cubic metres, including shale- gas resources - which would be equivalent to 118 years of supply at today's consumption rate. Production potential is promising too. The US Natural Gas Supply Association, which estimates that gas from shale plays supplied 10- 12% of US gas demand in 2008, says the resource's contribution could double in the next 10 years, providing a quarter of US sup-ply. For now, the US' most productive basin is the Barnett Shale, near Dallas, Texas, which accounts for about 70% of North American shale- gas output. Between 2000 and 2007, 4,200 horizontal wells were drilled there. Big prospects Other big prospects include Oklahoma's Woodford Shale; Arkansas' Fayetteville Shale; the Marcellus Shale, which stretches from West Virginia, up through Pennsylvania and into western New York; and Louisiana's Haynesville Shale, which Ziff Energy, a con-sultancy in Canada, says will become the largest of the unconventional plays. But the rate of development depends on the price companies think they will be able Clash of the supercontinents Many sediments are pushed lower by the slow accumulation of overburden. Over millions of years, the gradual increases in pressure and temperature that occur as a result cook organic material into hydrocar-bons - oil and gas. But this isn't what happened during the formation of the most important gas- shale reservoirs. " The real story is much more dramatic," says Schlumberger's Robert Kleinberg. In the Barnett shale, for ex-ample, sediments were deposited in the Mississippian age, when Texas was un-der water. During the Pennsylvanian and Permian, Gondawana, a supercontinent, collided with another, Laurussia, pushing these sediments down more than 4,250 metres in about 50 million years. " This is when gas was generated," says Kleinberg. Subsequently, the overlying mountain range eroded during the Triassic and Jurassic, and the depth of the Barnett sediments be-low ground level decreased to about 2,600 metres, where they remain today. ?? In 2008, Mærsk Oil drilled a world-record horizontal well at the Al Shaheen field in Qatar

78- www. world- petroleum. org 5.5- Technology: pushing boundaries to secure for the gas. For now, drilling activ-ity has slowed down, because of the sharp drop in gas prices since mid- 2008, threaten-ing the economics of some developments. Yet, despite the temporary lull in drilling, North America's shale- gas resources are of great strategic value: they are an indig-enous source of production, lessening reli-ance on imports. And when recovering de-mand pushes prices high enough, explora-tion activity will accelerate - keeping a cap on the cost of imports. Gas from coal seams Shales aren't the only source of uncon-ventional gas. The US is also a world leader in exploiting gas held in seams of coal ( see box). Indeed, the coal- seam gas industry is the most developed of the unconventional gas businesses. But shales have greater potential: the volume of gas that can be pro-duced by each well tends to be large, which is important because the economic value of the gas is more likely to justify the expense of investing in pipelines. Whereas a coal- seam gas well would typi-cally produce something in the order of 6,000 cubic metres a day of gas, some horizon-tal wells in the Marcellus Shale have been coming on stream at 184,000 cubic metres a day and in the Haynesville Shale at almost 480,000 cubic metres a day, says Chew. There's also considerable reserves up-side in the shale- gas sector, in which ulti-mate recovery rates are generally low. You might expect to recover 60- 70% of the gas in place in a conventional well, but in gas-shale reservoirs the figure might typically be 10- 20%. " You're leaving a lot of gas in place, which nobody likes to do," says Kleinberg. And while the US may be driving devel-opment at the moment, there is plenty of potential elsewhere. The enterprising tech-niques being developed in North America are likely to be replicated around the world - possibly significantly increasing the gas resources that are available worldwide. ?? Coal- seam gas: another unconventional story Unconventional gas comes from differ-ent types of geology. One of the most highly developed segments of the busi-ness is coal- seam gas ( CSG - also known as coal- bed methane or coal- bed gas). Natural gas adsorbed onto the sur-face of coal seams, CSG is extracted from coal seams too deep or too thin to have been mined. There are numerous CSG develop-ments in North America and Australia. Indeed, such is their prospective value that competition for control of Australia's CSG deposits has become intense; sev-eral ventures have recently been set up with the aim of liquefying gas produced from these deposits for export to buyers in Asia and South America. Difficult to tap CSG is the least prospective source of unconventional gas, however - largely because the seams in which the gas is contained are so thin. That not only means that they contain less gas, but also that it is technically more difficult to keep the well in the right part of the formation. It's a lot harder to drill a horizontal well through a formation that's 1 metre thick than through one that's 10 metres thick - go a few cen-timetres too high and the drillbit could break out of the coal seam. Finding it again could be difficult. Another problem is that initial flow rates from coal beds tend to be low. As a re-sult, operators struggle to achieve suffi-cient production to pay for pipelines to take the gas to market. The deposits are also at shallow depths, so the gas is under less pressure. That means expensive compres-sion equipment is necessary to get the gas flowing properly. CSG is better suited to ar-eas where gas pipeline infrastructure al-ready exists or to being converted to elec-tricity at the point of production. ??