Crude Observations

Got Gas?

Looking back through the last few blogs and forward to the Holiday season, I realize that I have spent a fair bit of time yapping about politics, crypto, scandal and the usual grab bag of topics.


This means of course that I have drifted far afield from the original purpose and raison d’etre of the blog, which is of course the energy industry. And not just “that” energy industry, meaning oil, but the entire energy industry, including tilting windmills, rusty solar panels, nuclear Armageddon, unaffordable heat pumps, poorly located geothermal, fantastical hydrogen, over-budget hydro, lung-annihilating coal and, of course, natural gas which as we know is my addiction and a substance that always disappoints – at least when it’s AECO.


So I thought I would use this bizarre interval between American Thanksgiving and Christmas to celebrate and give thanks to everyone’s favourite turkey (frying) commodity – natural gas.




I would like to say out of the gate that I, for one, am thankful for natural gas.


Like oil, natural gas is a prolific “fossil” fuel with many uses, however I feel that it floats unnoticed under the radar particularly because oil is such a big headline grabber, what with OPEC, Russia, the Permian, the Oil Sands, Saudi Arabia… you get the picture. Of course in recent months, gas has been getting plots of airplay whether it’s the effect of the Ukraine War on European gas supplies and prices, or undersea pipelines being blown up or genius politicians trying to tell us there is no “business case” for gas.


Poor old natural gas. What did it ever do to us?


So herewith and sans delay – 50 (or more!) things to know, love, think and be thankful for about natural gas, in no particular order of importance and apologies if I miss some obvious ones.


  1. Natural gas is used to provide heat, hot water and cooktop fuel to almost 80 million homes in North America
  2. Natural gas represents almost 25% of all primary energy use in North America and globally, rapidly closing the gap on coal
  3. It is cleaner burning than all the other combustible fuel alternatives such as whale blubber, wood, peat, coal, rolled-up newspapers and oil.
  4. It is so plentiful in North America that supplies are estimated at anywhere from 50 to 100 years at current consumption levels, although this might involve fracking under Philadelphia, so maybe not. Canadian supplies are somewhere in the 300 year range.
  5. It is cleaner, cheaper and easier to drill for than oil and wells require less maintenance after being brought on stream.
  6. It is easier to gather, process and subsequently ship and you never have to worry about spills. Sure it can blow up but that’s rare.
  7. No one has ever compared a gas drilling operation to Mordor.
  8. Natural gas pipelines are rarely protested the way oil ones are, unless you live in New York, then you are full on NIMBY about anything that involves digging up your property
  9. It can be compressed and liquefied for export.
  10. When prices are on, gas is a cash cow. Back in the Alberta energy heydays, royalties from natural gas pretty much paid for our health care system.
  11. Aside from heating our homes, natural gas is used to make plastic, fertilizer, generate electrical power. It is also used in vinyl, aspirin (not sure how) and pretty much as many products as oil.
  12. It also smells like rotten eggs. Actually it doesn’t – it is odourless, the smell is added.
  13. Natural gas reserves in British Columbia are so vast that more than 20 LNG projects were proposed for the West Coast. Just because government got in the way and only two projects are happening doesn’t mean the potential isn’t there
  14. Gas keeps it real – While “shale gas” is an actual real thing (gas comes from the shale), “shale oil” is just an expression, it’s really “tight oil” – go figure. Just close the loop – oil from shale is an actual thing. Confused yet? Stop smelling the gas.
  15. In many cases when you are drilling for oil, associated gas is produced. The reverse isn’t always true.
  16. When excess gas is produced, it is often flared because gas isn’t considered as valuable as oil.
  17. In the Permian, the amount of gas being produced is overwhelming the take-away capacity and with new rules on venting and flaring, wells are often shut in to work off the excess gas, except when it’s super cold, then everything freezes
  18. The US produces about 100 billion cubic feet of gas a day. That’s a lot of gas. Canada produces about 17 BCF of which 6 is exported to the US.
  19. There is currently close to 3,644 BCF of gas is in storage in the US, which is about 35 days of supply, compared to the oil storage days supply of about 27 days.
  20. Gas usage is a seasonal business – in winter storage levels are drawn down (for heating) and in summer months (injection season), stocks are rebuilt. Stocks can swing as much as 2,000 Bcf
  21. In the last few years, natural gas has supplanted coal as the number one fuel source for electricity in the United States
  22. The US is a net exporter of natural gas – sending gas to Mexico, Canada and elsewhere including in recent quarters a massive amount of LNG (liquified natural gas) to Europe, even if there is no business case.
  23. Pipelines to Mexico provide an ever-increasing source of demand as their power sector shifts from coal and are expected to account for 14 Bcf/day of exports in the next few years. Ironically one of the pipelines under development is expected to feed an LNG export facility in Mexico to serve Asian markets and is being built by TransCanada. Funny how Mexico (who has virtually no natural gas reserves) has a business case to use US gas transported on a Canadian built pipeline to feed LNG markets worldwide but Canada, with some of the most prolific gas resources in the world doesn’t have a similar business case. Funny hmm, or funny ha ha? You tell me.
  24. Similarly, current LNG export capacity in the US is about 14 Bcf/day and is expected to grow by 6 Bcf/day by 2026.
  25. Combined, this export capacity represents about 20% of US production, so new supplies are going to be needed to keep the system in balance.
  26. In the 2000’s, the US was facing a critical shortage of natural gas and started building LNG receiving facilities.
  27. Since 2010, US production of conventional gas has been in terminal decline. Shale gas from places like the Eagle Ford, the Marcellus, the Permian, the Barnett, the Haynesville and other shale basins have been key to maintaining supply
  28. In January of 2000, shale gas accounted for 2 Bcf/day of production and by October 2022 that number was 80 Bcf/day or 80% of production
  29. The most prolific region is by far the Marcellus shale in the Pennsylvania Appalachian region which accounts for a whopping 25 Bcf/day of production or 32% of shale and 25% of total production
  30. The largest (and first to export) LNG facility in the US is the Sabine Pass facility in Texas. It runs six trains and can process around 4.7 Bcf/day and was originally built to receive imports
  31. There are close to 3 million miles of natural gas distribution and transmission pipelines in North America – enough to go to the moon and back, six times
  32. Natural gas emits about 50% of the CO2 as coal for comparable amounts of electricity generation. What does this mean? Simple, it means that if we could replace all the coal generation in China, India and the United States with gas fired generation, we would be well on our way to meeting our global climate goals and all those annoying conferences and doom and gloomers could park themselves for a week or two.
  33. By replacing coal with gas and renewables, the UK was able to reduce emissions to Victorian era levels. Current over-reliance on renewables has changed that equation
  34. The US has the 4th highest proven reserves of natural gas in the world, behind Russia, Iran and Qatar. Canada ranks 17th, but this doesn’t include vast reserves in the northern part of British Columbia. Interestingly, Australia, which has about half the reserves as Canada and ranks a paltry 26th has a thriving LNG industry.
  35. More than 15 million vehicles worldwide run on natural gas – both compressed and liquefied. Take that Tesla.
  36. Gas was first discovered in the Middle East when seepages were ignited by lightning strikes.
  37. Natural gas was used in 500 BC China, when gas was moved via bamboo pipeline and used to make evaporated salt brine from sea water
  38. The first lamp to be lit by natural gas was in 1792 in the UK
  39. Natural gas is referred to a “dry” or “wet”. Dry gas is almost entirely methane. Wet gas is less than 85% methane and contains other gases such as ethane, butane, propane and naptha.
  40. 90% of chefs prefer to cook with natural gas. It evenly distributes heat which means evenly cooked food.
  41. The Temple of Apollo, known as the Oracle of Delphi, was built over a flaming gas vent
  42. Home use of natural gas premiered in the first century AD in Persia, when ground seepage was ignited next to the royal kitchen
  43. Olympus Energy, a Marcellus pure play driller holds the record for drilling the longest land-based lateral well in the world by drilling a Marcellus well with a lateral that’s 20,060 feet long (3.8 miles) with a total depth of 27,717 feet. Holy moly. Located in Pennsylvania, there is no truth to the rumour that this well connects to the underground jail at Philadelphia’s Lincoln Field football stadium.
  44. There is a famous scene in the movie Gasland, which excoriates the gas and fracking industry in Ohio, where someone lights their tap water on fire and blames fracking. Apparently this is common in areas where shallow gas and underground aquifers co-exist. Go figure.
  45. As recently as 2008, the Alberta government received close to $5 billion in royalties from natural gas. By 2014 that number had been reduced by 90%. This year that number is expected to recover to … about $5 billion. Woot!
  46. Cooling natural gas to -162 Celsius converts it to a liquid that can then be shipped worldwide. Despite ample supplies, lots of coastline, infrastructure, a willing industry and an insatiable customer base our industry guru PM contends there is no business case for this industry
  47. Because natural gas markets have tended to be continental instead of global (like oil), prices vary considerably around the globe, hence the push for the big reserve holders to LNG for export. The more global the industry becomes, the more stable the pricing will becomes – business case, right?
  48. The flaring of gas from oilfields in the Middle East is visible from space
  49. The first natural gas well drilled in Alberta was in 1883 in Medicine Hat, otherwise known as “Gas City”. The first gas well in Canada was in New Brunswick in 1859.
  50. 68% of Canada’s natural gas production comes from Alberta
  51. The now abandoned Energy East pipeline project was to have been built by repurposing a TransCanada owned natural gas pipeline. If LNG was to be developed on the East Coast, for example in New Brunswick or gas-hating Quebec, that repurposing can easily be repurposed.
  52. Coalbed methane is natural gas found in coal seams. There may be up to 500 trillion cubic feet of coalbed methane in Alberta which is an absurdly massive amount, although not all of this will be recoverable.
  53. People who explore and drill for gas are called Nerds.
  54. Bonus Item – there is a book about natural gas called “The Prize”. No, actually there isn’t. That one’s about oil. But one of the top sellers on Amazon about natural gas is called the “Handbook of Natural Gas Transmission and Processing: Principles and Practices”. Now that’s a page turner.


So that’s it, it’s a gas, gas, gas.


Didn’t think I could do 50, so I’m glad I got a little further.

Crude Observations
Sign up for the Stormont take on the latest industry news »

Recent Posts