US Natural Gas Production Up

By Clifford Krauss

American natural gas production is rising at a clip not seen in decades, pushing down prices of the fuel and reversing conventional wisdom that U.S. gas fields were in irreversible decline.

The new drilling boom uses advanced technology to release gas trapped in huge shale beds found throughout North America - gas believed just a decade ago to be out of reach.

Shale gas could ultimately be important beyond North America. The rest of the world has shale formations on an immense scale. Many of them, including beds in Europe, Russia and China, are known to contain gas, but exploration and assessment of those fields with the new production techniques is just beginning.

The trend has significant long-range implications for U.S. consumers and businesses. A sustained increase in gas supplies over the next decade could slow the rise of utility bills, obviate the need to import more gas from elsewhere around the globe, including liquefied natural gas delivered in tankers, and make energy- intensive industries more competitive.

While the process of extracting gas produces some environmental damage, natural gas is the cleanest fossil fuel, releasing less of the emissions that cause global warming than coal or oil. It is now used primarily for residential heating and cooking, power generation, providing energy for industrial processes, and as a feed stock for fertilizer, chemicals and plastics.

Some experts believe that wider use could be a step in battling climate change, helping to buy time until renewable fuels like wind and solar power become feasible on a large scale.

While the recent production increase is indisputable, not everyone is convinced the additional supplies can last for decades. "The jury is still out how big shale is going to be," said Robert Ineson, an analyst at Cambridge Energy Research Associates, a consulting firm.

Still, many people in the natural-gas industry believe a new era is at hand, and a rising chorus of analysts on Wall Street accepts that notion. Competition among companies for rights to the new gas has set off a frenzy of leasing and drilling.

"It's almost divine intervention," said Aubrey McClendon, chairman and chief executive of Chesapeake Energy, a major natural gas producer in the United States. "Right at the time oil prices are skyrocketing, we're struggling with the economy, we're concerned about global warming, and national security threats remain intense. We wake up and we've got this abundance of natural gas around us."

U.S. gas production is up about 9 percent this year, a rate of increase not seen since a one year jump in 1984 and matching rises more typical of the 1950s when gas drilling was booming. Most of that gain is coming from shale, particularly the Barnett Shale around Fort Worth, Texas, which has been under development for several years. The increase in gas production stands in sharp contrast to the trend in domestic oil production, which has been declining in fits and starts since 1970.