Local drilling to fuel U.S. energy surge

WHEELING – Drilling in the Marcellus and Utica shale formations should help the United States surge past Saudi Arabia as the world’s largest oil producer by the end of this decade, a report released Monday by the International Energy Agency states.

“North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency,” said agency Executive Director Maria van der Hoeven.

As gasoline prices remain high – and tensions in the OPEC nations of the Middle East continue – increasing domestic oil production could be a way for the U.S. to boost its economy, while reducing or eliminating dependence on foreign sources of energy.

According to its website, the agency consists of 28 member nations, including the U.S., the United Kingdom, Japan, Germany and Australia. It formed in response to the 1973-74 international oil crisis to “help countries coordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets.”

The report shows that by 2020, shale drilling should allow the U.S. to surpass Saudi Arabia in oil production. It also shows the U.S. should become a net exporter of natural gas within the next eight years, meaning the country should be able to produce more than it can consume.

The agency’s information also predicts the U.S. will be “almost self-sufficient in energy, in net terms, by 2035.” The projections show U.S. oil production peaking in 2020 at 11.1 million barrels a day. This theoretically means the need to import oil from the Middle East would end over the next decade.

According to the report, global demand for natural gas will increase to 5 trillion cubic meters in 2035. With production increasing to meet demand, roughly half of the increase in gas production will come from “unconventional sources,” mostly from the U.S. and China.

Drilling, fracking, processing, transporting and cracking in the Marcellus and Utica shale formations throughout the Upper Ohio Valley continues to increase.

Major corporations such as Chesapeake Energy, Gulfport Energy, Chevron, Exxon Mobil, Dominion Resources, MarkWest Energy, Williams Partners and Royal Dutch Shell are all taking their stakes by investing billions of dollars to harvest the resources that lie thousands of feet underground.

Productive U.S. shale formations other than the Marcellus and Utica include the Eagle Ford Shale in Texas, the Haynesville Shale of Louisiana and the Bakken Shale of North Dakota. Shale drilling typically involves horizontal drilling and fracking, which gives it the “unconventional” label.

In addition to the natural gas found in the Marcellus and Utica formations, oil and natural gas liquids – ethane, propane, butane and pentane – are also prevalent in the rocks, particularly the farther west one drills. The report shows that oil and gas from unconventional sources in the U.S. is expected to significantly increase until 2035.

The report provides a more divided view for the future of coal usage. Though environmental regulations may reduce coal burning in the U.S., global coal demand is expected to jump by 21 percent by 2035, mostly focused in China and India.