Natural gas from coal history
NGC development in the United States began in the 1970s, about 20 years before NGC activities in Canada. Early NGC wells in the United States were drilled primarily to release natural gas as a safety measure for coal mining operations. However, the increase in natural gas prices in the late 1970s, along with intensive research efforts and federal tax incentives, spurred NGC, tight sands and shale gas exploration and development to produce unconventional gas for profit. Approximately $500 million was invested in U.S. NGC research and development before the first significant commercial production began.
Annual NGC production in the United States has risen from none in the late 1970s to approximately 1.68 trillion cubic feet (47 billion cubic metres). Daily production in the United States amounts to 4.6 billion cubic feet (129 million cubic metres) or about 8.1 per cent of U.S natural gas production. The U.S Energy Information Administration estimates U.S. NGC reserves at 17.5 Tcf (496 billion cubic metres), or approximately 10 per cent of proved U.S. natural gas reserves. The total resource is approximately 725 trillion cubic feet.
The NGC produced in the United States comes from at least 12 different basins across the country, each with unique producing characteristics. While some issues have been raised about the production and disposal of water that is sometimes co-produced with NGC, its development continues and as a whole has proceeded with little controversy in the majority of the basins.
Between 1997 and 1999, approximately 140 test wells were drilled in Canada to evaluate NGC potential without commercial success. Since 2000, more than 2,500 wells have been drilled and commercial production has been established. Current projects range from exploration and experimental schemes to pilot projects to full-scale development. More than 1,400 wells were drilled in Alberta in the first nine months of 2004 and production was estimated at over 100 million cubic feet per day going into the last quarter of the year. The National Energy Board estimates Canadian NGC production could reach two billion cubic feet per day in 2014 and three billion cubic feet per day in 2024 and will result in recoverable gas of 75 trillion cubic feet. This exceeds current conventional proved gas reserves of 59.8 trillion cubic feet (1.69 trillion cubic metres.)
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