Then along came shale oil and gas.
Marcellus continues to defy expectations, driving US gas production ever higher":
Shale has been the primary driver of US gas supply growth since 2007, and the Marcellus shale has been the largest single contributor to rising production.Europe ought to be happy, too, if the U.S. can get its LNG export business in motion. The Russians? - well, not so much.
Marcellus production topped 14.5 bcfd in March and is expected to account for nearly one fourth of all US gas output by 2015, according to a report by Morningstar Inc.
The Marcellus's eminent position stems, in part, from the ability of wells in the formation to come online at high initial production (IP) rates and to sustain those rates for longer than wells in other shale formations.
The Marcellus stretches across portions of Pennsylvania, Ohio, West Virginia, and New York. Moody's Investor Service figures the formation holds an estimated 141 tcfe of recoverable reserves.
Marcellus output climbed from virtually nothing in 2007 to 9 bcfd in 2013, equivalent to the combined production growth of the Haynesville (4 bcfd), Eagle Ford (3 bcfd), and Barnett (2 bcfd) shales. According to Morningstar, output from the formation helped boost US production 14 bcfd, or 25%, during the 6-year period, more than offsetting declines from conventional reservoirs and the Gulf of Mexico.
If not for the Marcellus, Morningstar found, US gas production would likely have peaked in late 2011 or early 2012 as producers reduced gas-directed drilling in response to weak domestic gas prices.
The Marcellus shale has fundamentally altered the outlook for the US natural gas industry. The US is emerging as a low-cost chemicals producer and is poised to become an exporter of natural gas—a feat unthinkable just 5 years ago when it was widely believed that increasing LNG imports would be needed to meet domestic demand.
According to Hanson, "In short, the growth of the Marcellus over the next several years is likely to be nothing short of astounding."