May 4, 2011

Speaker questions promise of cheap, abundant natural gas from shale

Arthur Berman

Arthur Berman

According to Berman, small amounts of high-quality resources that are cheap to extract are at the top of the resource pyramid and increasing amounts of lower-quality resources that cost more to extract are toward the bottom.

“The widespread belief that shale gas will provide a  cheap and abundant supply of natural gas while operators make sizeable profit must be questioned, based on results to date,” Berman says.

Small amounts of natural gas have been produced for years from shales that have natural fractures where fluids can be injected during the extraction process. Modern technology has led to hydraulic fracturing so more shale fields have been tapped and shales have become increasingly important sources of natural gas.

Berman, however, says that “based on several decades of experience with other low-permeability reservoirs, the expectation that shale gas will realize significantly higher profit margins seems unlikely and empirical results to date from longer-lived shale fields support this observation.”

For example, he says companies extracting natural gas from the Barnett, Fayetteville and Haynesville shale sites in Texas, Arkansas and Louisiana may overstate reserves by as much as 100 percent and claims of profitability are questionable.

Berman has 32 years of experience in petroleum exploration and production and is director of the Association for the Study of Peak Oil and Gas USA. He speaks on the UW campus as one lecturer for the course “Peak Oil, Coal, Natural Gas and Climate Change” under way spring quarter.

The talk is free and open to the public. Berman writes about his ideas on a blog.