Shale Gas in the United States

- June 4th, 2013

Here’s a look at the US shale gas industry and an overview of two of the main companies operating in that sector.

Shale Gas in the United States

Early in the 21st century, natural gas became the energy source of choice for power generators, manufacturers, businesses and homeowners. By the end of 2000, this demand had caused an unprecedented spike in the need for shale gas, which is found across the United States in fine-grained sedimentary rock formations that contain large amounts of natural gas. 

Since then, advances in horizontal drilling and hydraulic fracturing have made accessing and extracting that gas increasingly economically viable.

Shale gas in the US

In a 2011 industry report, the US Potential Gas Committee, a non-profit organization made up of industry experts, states that the US possesses 2,170 trillion cubic feet (tcf) of natural gas, a 100-year supply. That same year, the US received about one-third of its gas resources from shale gas, about 95 percent of which was produced domestically. Though production on the Gulf Coast hit a snag in 2005 due to Hurricane Katrina, new plays that have been accessed across the country make a similar problem unlikely in the future.

About 20 percent of the $133.7 billion invested in the US shale gas market comes from foreign investors like Japan, China, India, Korea, France and Norway, according to Bloomberg.

The future of shale gas

Kent Croft, chief investment officer at Croft Funds, told CNBC earlier this year that he expects shale gas found in the US to give the country “an enormous competitive advantage that will last for a number of years.”

The article also notes that the Energy Information Association believes US shale gas production will rise to 16.7 tcf in 2040, up from 8.6 tcf this year.

Major shale gas players

Here’s a look at two key shale gas companies active in the US:

  • Oklahoma City-based Chesapeake Energy (NYSE:CHKis the second-largest producer of natural gas and the most active driller of new wells in the US. The company has active mines in nine states in major plays such as Eagle Ford, Utica, Granite Wash, Cleveland, Tonkawa, Mississippi Lime and Niobrara. In 2006, the company launched a water recycling program to conserve the water that is lost during the fracturing process; it now recycles the majority of its water at its Pennsylvania and Ohio operations.
  • Chevron (NYSE:CVXholds leases for shale plays throughout North America, including Pennsylvania, New York, West Virginia, Ohio and parts of Alberta, Canada. The company is currently evaluating prospects in about 380,000 net acres of the Atrium Shale play, 700,000 net acres of the Marcellus Shale play and 70,000 net acres in the Haynesville shale play in the US. In addition, Chevron holds 250,000 net acres of the Duvernay shale in Canada and has developed a three-year exploration program to evaluate the resources.

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