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Saturday, August 05, 2006

Natural Gas Generators

Before natural gas reaches the final customers, it probably travels thousands of miles through pipelines under pressure from locations as far as the Gulf of Mexico and the Rocky Mountains. In fact, the Panhandle-Hugoton gas field in Texas alone has an estimated reserve of 66 trillion cubic feet.

The US has an estimated reserve of approximately 200 trillion cubic feet from the known reservoirs and large reserves from the Alaskan region. Natural gas production has been enhanced by advanced technologies, such as 3-D seismic vibration to explore gas and drilling technologies. There are approximately 400,000 wells in the US, an increase of 20 percent over a five-year period. Still, production has not been able to cope with the demand, and it is forecast that demand would increase by 40 percent until 2025.

However, natural gas generation is restricted more by governmental policies than by any other factor. For instance, the restrictions and rules of the Bureau of Land Management restrain the gas companies from venturing for new gas discoveries. Similarly, price controls in the 70s discouraged gas companies from producing more. On the positive side, the shift of hydroelectric companies towards natural gas as the choice of fuel acts as an incentive for oil and gas companies to produce more.

There are more than 2,000 companies producing gas in the US and the largest five, such as BP and Chevron, produce 18 percent, with BP, being the largest producer of natural gas in the US. In the downstream operations of processing and transportation, there are many players such as Dominion Home that produce, store and transmit gas.

Just as the shortfall in supply was caused over the years, the solution to the shortfall in demand and the consequent price increases can only be solved over the years. The gas industry is working towards that solution.

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