Peak gas

Peak gas is the point in time when the maximum global natural gas (fossil gas) production rate will be reached, after which the rate of production will enter its terminal decline. Although demand is peaking in the United States and Europe, it continues to rise globally due to consumers in Asia, especially China. Natural gas derived from fossil fuels is a non-renewable energy source that produces significant greenhouse gas emissions. Natural gas is expected to peak after other fossil fuels. One forecast is for natural gas demand to peak in 2035. The concept of peak gas follows from Hubbert peak theory, which is most commonly associated with peak oil. Hubbert saw gas, coal and oil as natural resources, each of which would peak in production and eventually run out for a region, a country, or the world.

Gas demand

The world gets almost one quarter of its energy from natural gas. The largest increments in future gas demand are expected to come from developing countries.

Gas supply

Hubbert's original peak theory predicts that natural gas will experience three equally spaced events: first, the rate of discoveries will peak, then X years later reserves will peak, and finally X years after peak reserves, gas production will peak at the same rate as the previous peak of discoveries. For the United States, for instance, Hubbert projected that the natural gas discovery rate was peaking in 1962 at about 570 billion cubic metres (20 trillion cubic feet) per year. From his curves, he predicted that proved reserves would peak eight years later, in 1970, and that production would peak after another eight years, in 1978, at 570 billion cubic metres (20 trillion cubic feet) per year, about equal to the rate of peak discoveries. Of the three peaks, Hubbert found the peak in discoveries most difficult to define, because of large year-to-year scatter, and the phenomenon of “reserve growth.” Initial estimates of a discovery are usually much lower than ultimate recovery, especially if the conservative estimate of proven reserves is the measure. As the discovery is drilled out, estimates rise. Sometimes estimates of recoverable oil and gas in a discovery continue to rise for many years after the discovery. To find the peak in discoveries, Hubbert backdated reserve growth to the date of field discovery.

New gas discoveries

According to David L. Goodstein, the worldwide rate of discovery peaked around 1960 and has been declining ever since. Exxon Mobil Vice President, Harry J. Longwell places the peak of global gas discovery around 1970 and has observed a sharp decline in natural gas discovery rates since then. The rate of discovery has fallen below the rate of consumption in 1980. The gap has been widening ever since. Declining gas discovery rates foreshadow future production decline rates because gas production can only follow gas discoveries. Despite the reported fall in new-field discoveries, world proved reserves of natural gas have continued to grow, from 19 billion cubic meters (bcm) in 1960, 45 bcm in 1970 and 84 bcm in 1980, to a record high 200 bcm in 2012. A researcher for the US Energy Information Administration pointed out that after the first wave of discoveries in an area, most oil and natural gas reserve growth comes not from discoveries of new fields, but from extensions and additional gas found within existing fields. Dr. Anthony Hayward CCMI, chief executive of BP stated in October 2009 that proven natural gas reserves around the world have risen to 190 cubic kilometres (1.2 trillion barrels) of oil equivalent, enough for 60 years' supply if consumption is non-increasing, and that gas reserves are trending upward. A similar situation exists with oil reserves in that they have increased despite the actual declines of worldwide discoveries for decades and despite increases in consumption. BP's former Chief Petroleum Engineer Jeremy Gilbert stated in 2007 that the growth in oil reserves "results largely from distortions created by the..reporting rules of the US Securities and Exchange Commission" that force companies to be overly conservative in their calculation of reserves, but that "even this illusory growth is unlikely to last," because fewer oil reserves are coming under the control of SEC-regulated companies. However, since Gilbert's statement, proven reserves of both oil and gas have continued to rise, proven oil reserves increasing 23%, from 1.20 trillion barrels in 2007, to 1.48 trillion barrels in 2012.

Production

Reserves

By country

Italy

Italy's gas consumption is presently third-highest in Europe, behind only Germany and the United Kingdom. Gas consumption is growing at a steady rate, and gas consumption in 2001 was 50% greater than it was in 1990. Italy's major oil and gas company is Eni. Formerly state-owned, it was privatized during the 1990s, but the government still retains around one-third of the shares. Natural gas reserves in Italy were 164 billion m3 at the beginning of 2007. Natural gas production in 2005 was 11.5 billion m3, while consumption was 82.6 billion m3. The difference was imported. The primary sources of imported gas are Algeria, Russia and the Netherlands.

Netherlands

The Netherlands government has stated that peak gas occurred in 2007–2008 and the country will have become a net importer of natural gas by 2025.

Romania

Natural gas in Romania was discovered in 1909 in the Sărmăşel area. In 1917, Turda became the first European town lit up with natural gas. Maximum production of 29.8 billion m3 was achieved in 1976. Today, gas provides about 40% of the country's energy needs.

Russia

Gazprom, Russia's state-controlled gas monopoly, is a firm which holds 25% of the world's gas reserves. Gazprom produces the bulk of Russia's gas.

United Kingdom

UK gets its natural gas almost entirely from the North Sea. The North Sea gas field peaked in 2000 and has been falling quickly since. Production in 2004 was 12% down from the peak.

United States

Steidle, 1952 In 1952, Dr. Edward Steidle, Dean of the School of Mineral Industries at Pennsylvania State College, predicted that gas production would soon decline significantly from 1952 rates, so that gas would cease to be a significant energy source by 2002, and possibly as early as 1975.

… excerpt ends here. Continue reading the full article.