With 9 of the 12 largest US natural gas fields producing from unconventional gas plays, the Fayetteville is an emerging giant. Two of the top natural gas producers, Southwestern Energy (SWN) and Chesapeake Energy (CHK), have increased their stake by investing over a combined $2 billion dollars and declaring over 1.7 million acres in the Fayetteville shale over the past few years. But, getting the gas from the shale was not always easy. It wasn’t until George Mitchell with Mitchell Energy who had been developing in the Newark East field in the Fort Worth Basin (Barnett shale) since the early 80’s had helped developed and implement new frac technology using water and sand. That received the attention from Devon Energy (DVN) who purchased Mitchell Energy in 2001 for a whopping $3.4 billion dollars since making them one of the largest and profitable natural gas producers in the country. Now, 7 of the top 10 natural gas producers are developing in the unconventional gas plays. With conventional and offshore production declining (Fig.1), unconventional gas plays have been consistently increasing in production since 1990 (Fig. 2)
Natural Gas As a Commodity
With high demands for natural gas and no viable alternative in sight. Natural gas has been what’s driving the energy sector over the past few years. Natural gas is currently being used in:
- Over 60 million homes
- 78% of restaurants
- 59% of hospitals
- 58% of retail buildings
- Nearly 130,000 buses, taxis, delivery truck and other natural gas powered vehicles
Natural gas accounts for more than 90% of new electricity capacity in the last 5 years. Currently it is the nations fastest growing energy source, with demand forecast to increase by about 22% between now and 2030 (EIA Annual Energy outlook 2006). Americans used 21.9 trillion cubic feet of gas in 2005 while only producing 18.2 trillion cubic feet of gas that same year.
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