Tarrant County is still a runaway No. 1 in natural gas production among Texas' 254 counties, according to the latest data released by the Texas Railroad Commssion, the chief regulator of the state's oil and gas industry. Tarrant's gas output was 62.2 billion cubic feet in October, the latest month for which data is available. Johnson County, Tarrant's neighbor to the south, is No. 2, at 39.4 billion cubic feet. Denton County is No. 4, at 19.7 billion, while Wise County is No. 5, at 19.2 billion. All four counties are on the list because they are leaders in production from North Texas' natural gas-rich Barnett Shale. Prior to the Barnett play, Tarrant County's production historically had been nil.
While we add up the four counties production to make 130 billion cubic feet, let's consider the last sentence; Prior to the development of the Barnett Shale, production had been nil.
These figures should teach us three important lessons
- There are likely to be multiple locations worldwide similar to the Barnett. For all it's fame, the Barnett has been surpassed in production today by the Haynesville and is actually pretty titchy compared to the Marcellus, Eagle Ford, Horn River etc. We hear about the Barnett mostly because that is the place George Mitchell first started looking for reasons associated with serendipity, not geology. We'll probably be able to say the same thing about the Barnett compared to non US plays: initial indications are showing the Vaca Muerta, Bowland, Gdansk and Canning plays in Argentina, UK, Poland and Australia as ultimately being larger than the Barnett.
- Remember the New York Times story earlier this year, which channeled Art Berman's thesis that shale production depletes so quickly that a) prices will have to hit at least $6MMBTU to be profitable and b) this means that shale is really just a big Ponzi scheme, which means c) shale will never have any meaningful impact on carbon reduction by cutting coal? So much for that theory, although if one still has the slightest doubt after reading the Texas figures, consider recent prices of as low as $3.07 MMBTU or 40% less than a year ago. In short, the blindingly obvious conclusion is that shale is not a flash in the pan, production is getting higher and cheaper as technology advances and prices just keep on falling.
- The longer we stop denying shale reality, the worse damage we cause to the European economy and carbon output.
Back to the 130 BCF figure, from four counties of the Barnett in October 2012 that weren't producing anything of any importance five years ago. We can think of multiple locations in Europe which are geologically interesting and may well have the same potential to ultimately produce as much, or more than the Barnett.
130 BCF in one month is 3.68 Billion cubic metres. Over one year at that rate is half UK consumption and higher than the entire North Sea UK production. 44 BCM over one year is equal to the combined total usage of Austria, Belgium, Ireland and Portugal. 44BCM is equal to all kinds of interesting figures: 31 million tonnes of LNG for example or 5 billion US$ at US prices or over 9 billion Euro at current European prices.
That's where Europe could be in five to ten years if they want to be. Just one shale play equivalent to the Barnett would change everything. But why stop there? The US didn't and that's why the US is recovering and Europe isn't. All that's stopping Europe is themselves.