Study says Barnett will still be producing gas in 2050

Posted Friday, Mar. 01, 2013  comments  Print Reprints

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The Barnett Shale will still be churning out natural gas even in 2050 and will produce more than three times what it has already yielded, according to a new study by the University of Texas at Austin.

There could be another 10,000 to 11,000 wells drilled in the big North Texas natural gas field, the study by UT's Bureau of Economic Geology forecasts. That activity could concentrate in Tarrant, Johnson, Denton and Wise counties, which have proved to be the most productive areas.

The Barnett Shale has already produced about 13 trillion cubic feet of natural gas from more than 18,000 wells, according to the Texas Railroad Commission.

The UT study projects that the field will produce 44 trillion cubic feet by 2050. That's roughly two years of current U.S. consumption.

It's somewhat more than a general estimate of at least 39 trillion cubic feet that Scott Tinker, director of the Bureau of Economic Geology, gave the Star-Telegram last month for a news report on the study's findings. The newspaper's report also said the study found that the average Barnett Shale well would produce 1.44 billion cubic feet over its life, considerably less than many industry estimates, but the study summary released Thursday did not address that subject.

The summary data did detail what Tinker earlier told the paper was a wide variability in the quality of the Barnett Shale. It said that a typical horizontal well in the field could have a lifetime production ranging from less than 500 million cubic feet, to more than 4.3 billion cubic feet.

Tinker did not speak to the Star-Telegram Thursday. Details of the study are expected to be published in upcoming peer-reviewed publications, the school said.

More broadly, the study suggests that the surge in U.S. natural gas production that has been driven by new shale fields will continue. While the Barnett Shale was the first major U.S. shale gas field, it has spawned exploration elsewhere.

"The rigorous assessment of the country's second-most productive shale gas formation reaffirms the transformative, long-term impact of shale and other unconventional reservoirs of oil and gas on U.S. Energy markets," the school said in a news release. UT said it expects to conclude similar assessments of three other major shale gas formations: the Haynesville in East Texas and Louisiana; the Marcellus in the Appalachians, and the Fayetteville in Arkansas.

Crude oil output up

in Texas, nationwide

On Wednesday, the U.S. Energy Information Administration reported that U.S. crude oil production at the end of 2012 topped 7 million barrels a day for the first time since 1992. It has not yet published its estimate for gas production.

The same day, the Texas Railroad Commission said Texas is producing nearly 1.5 million barrels of oil a day, which it said is up nearly 50 percent from 2011. The state's output has been boosted by the rising Eagle Ford Shale in South Texas and booming activity in West Texas' Permian Basin.

The longevity of shale fields has been a point of contention, as critics have pointed to rapid rates of decline in shale oil and gas wells as a sign the boom in production will be short-lived.

For example, in a study released last month, Canadian geoscientist David Hughes of the Post Carbon Institute argued that the Barnett experiences an annual 30 percent decline that requires dramatically higher drilling to overcome.

In contrast, the UT study says the Barnett peaked in 2011 at about two trillion cubic feet that year -- close to 10 percent of U.S. production -- and will still be producing nearly half that, 900 billion cubic feet a year, in 2030. At that point, drilling is assumed to end and the field will gradually decline through 2050, the study says.

Hughes told the Star-Telegram on Thursday, "I agree with their general trend. I would just say that their decline is over-optimistic," because producers will run out of good drilling locations in less than a decade.

By his estimate, the field will produce nearly 34 billion cubic feet by 2030, but at that point it will be producing less than 10 percent of the UT study's forecast. It will also require significantly higher prices than today's depressed levels, he said. UT used a base case that assumes an average price of $4 per 1,000 cubic feet for natural gas.

On Thursday, the futures price of natural gas was $3.48 per million Btu, which is roughly equivalent to 1,000 cubic feet. In 2012 it averaged $2.83, the lowest since 1999.

Tinker, one of the study's principal investigators, said in Thursday's release that while the productivity of the field varies greatly, there are still many locations to drill.

The study was funded by the Alfred P. Sloan Foundation. In a disclosure, the school said Tinker is on advisory boards and receives compensation from three energy producers -- BP, Geo Fossil Fuels, and P&P Llc. It also said Devon Energy, the Barnett's largest producer, and Exxon Mobil, whose subsidiary XTO Energy is the field's No. 3 producer, reviewed the study and "offered critical feedback."

Jim Fuquay, 817-390-7552

Twitter: @jimfuquay

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