US natural gas production to plateau by 2020?

University of Texas researchers disagree with EIA's natural gas production estimates with findings that predict production could plateau by 2020

It has become somewhat of a standard understanding that the U.S. natural gas production boom will continue its growth for decades, but science journal Nature revealed researchers from the University of Texas at Austin disagree.

While the U.S. Energy Information Administration estimates natural gas output will continue to rise through 2040, UT Austin researchers argue natural gas production will plateau by 2020. According to this new research, the nation’s four major shale plays - the Marcellus, Barnett, Fayetteville and Haynesville formations - could produce half of the natural gas the EIA says they will by 2030.

Why the differences in estimates?
According to Tad Latzek, head of UT Austin's department of petroleum and geosystems engineering, many petroleum industry analysts agree with the EIA's assessment of the future of natural gas in the U.S. However, industry and peer-reviewed studies are in "entirely different" spheres, making it difficult to discuss the researchers' assumptions, methods and findings.

The UT Austin researchers believe the EIA's forecasts for natural gas production are overly optimistic because of the basic research it relies on. Meaning, in-depth studies of the major shale plays have provided much more conservative output predictions for university and some independent researchers. Yet, representatives of the EIA defend the agency's assessments and argue that they should not be compared with the Texas studies because they use different assumptions and include many scenarios, according to Nature.

What the new estimates could mean
Since the amount of natural gas drilling has drastically increased over the past few years in the U.S., and drilling technologies have become more efficient, Latzek thinks the nation may be setting itself up for problems in the future, Nature reported.

Optimistic views of natural gas reserves continue to drive shale gas production as well as the development of industrial technologies that focus on natural gas instead of oil-based products. Industrial, transportation and utility markets that heavily rely on natural gas could face problems if output levels off two decades sooner than the EIA thinks it will. This could lead to shortages and increase prices.

More information on natural gas in the U.S. can be found at PennEnergy Research

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