Not only is natural gas supply in the U.S. plentiful, but shale gas is also increasing its percentage of total gas production. According to Shree Vikas, director of market intelligence and business analysis for ConocoPhillips, that's a growing trend.
"Shale gas used to be about 30 percent of total U.S. gas production in 2010. It increased about 50 percent in 2014, and now it represents about two-thirds of total U.S. gas production," Vikas said.
Much of the gas supply growth has occurred in the Appalachian region, Vikas said, specifically in the Marcellus and Utica.
"That could have grown much larger than it is right now, primarily due to the constraint we have right now in infrastructure," Vikas said, explaining production could increase as pipeline capacities increase.
Discussing upstream and supply on a panel at the 2018 ADI Natural Gas and NGL Forum held recently in Houston, Vikas stressed the importance of companies implementing efficiency and standardization to "bring the cost of supply low."
"There is a lot of gas in the system, and low cost of supply wins," Vikas said. "Reducing cost of supply will be critical for new and affordable gas supplies to be brought to the market."
Associate gas represents about 40 percent of total gas supply; that trend is increasing, Vikas said, as light, tight oil activity increases in the Utica, Permian and similar plays.
Panel moderator Tulio Scacciati, strategic energy advisor and mergers and acquisitions executive for ADI Analytics, noted shale producers have been cutting costs.
"We anticipate that to continue through the medium term by leveraging both efficient work flows as well as new technologies," Scacciati added.
Additionally, Scacciati said operators are currently focusing on reducing costs associated with proppant, pumping and fracturing fluids, including water. They are also considering various artificial lift systems for the older fleet of wells and gravitating toward gas lifts.
"Given these initiatives, moderate growth in industry capital can impact production more than historically," he observed.
Technology versus innovation
While there is "a lot of talk about technology," observed Colin McHattie, director of technical assessment, new ventures -- unconventional and mature fields for Halliburton, "technology didn't spawn unconventional business. It was innovation."
There is a difference between innovation and technology, McHattie said.
"The innovation of bringing horizontal drilling and hydraulic stimulation was not new technology," he said. "But that innovation has led to a lot of other huge unconventional economic developments, such as supply chain management and sand mines."
Technology applied smartly will be the wave of the future, McHattie predicted, adding "there's a huge amount of drilling to be done in the Permian Basin."
As lead engineer of project management and control for Statoil, Diptabhas Sarkar noted his company's trend toward developing unmanned production platforms not only reduces costs but also increases safety.
"Helicopters are the most dangerous operation we do in an offshore setting," Sarkar explained. "On a typical platform, there are 400,000 exposed personnel hours each year."
That number is reduced to 2,000 per year on an unmanned facility.
"That's a 90-percent reduction of exposure to our most dangerous operation. Living quarters, jackets, lifeboats, flare stack, blast wall and potable water generators -- if you take all of that out, you have made it cheaper. But more important than that is safety," Sarkar said. "Safety and cost is why we are going in this direction. For us, this is going to define the trends of the fields in the future."
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