{"id":57937,"date":"2013-08-12T20:22:44","date_gmt":"2013-08-13T02:22:44","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/jump-in-natural-gas-production-bypasses-san-juan-basin-fields\/"},"modified":"2013-08-13T02:22:44","modified_gmt":"2013-08-13T02:22:44","slug":"jump-in-natural-gas-production-bypasses-san-juan-basin-fields","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/jump-in-natural-gas-production-bypasses-san-juan-basin-fields\/","title":{"rendered":"Jump in natural gas production bypasses San Juan Basin fields"},"content":{"rendered":"
\"BP
BP economist Christof Ruhl. Photo courtesy of BP<\/span>du1-i-syn<\/span><\/figcaption><\/figure>\n

Christof R\u00fchl, chief economist for BP, has traced a chain reaction from shale drilling in the United States that has moved east across the globe.<\/p>\n

Southwest Colorado was once the epicenter of the nation\u2019s best natural gas field, the San Juan Basin. While the field remains productive, energy companies are chasing oil and gas from tight shale rocks in massive new fields all across the country.<\/p>\n

\u201cThe (shale) resource globally is widespread, but for the foreseeable future, most of it will come out of the United States, \u201c R\u00fchl said.<\/p>\n

He credited open competition and private control of oil and gas as the reasons that companies developed the hydraulic fracturing techniques necessary to tap shale rocks here, and not in other countries with government-owned oil and gas fields.<\/p>\n

R\u00fchl was in Denver for the Colorado Oil and Gas Association\u2019s annual convention, and he sat for an interview with The Durango Herald.<\/p>\n

He is not involved with the part of BP\u2019s business that decides where to drill, so he could not speak specifically about the San Juan Basin, where production has been dropping since 2003.<\/p>\n

But R\u00fchl said energy companies are shifting their investment decisions now that the country is awash in cheap natural gas.<\/p>\n

\u201cOne region\u2019s gain is another region\u2019s pain,\u201d he said.<\/p>\n

Instead of drilling more traditional natural gas wells or coalbed methane wells \u2014 the kind that are found in the San Juan Basin \u2014 companies now drill shale oil wells, which often produce natural gas as a byproduct. That helps in an era of historically low natural gas prices.<\/p>\n

\u201cIf you have it as a byproduct, basically every price above zero is a good price,\u201d R\u00fchl said.<\/p>\n

The rush into shale drilling has led to an oversupply of natural gas and also made the United States by far the world\u2019s leading gas producer.<\/p>\n

U.S. natural gas prices averaged $8.85 per million btu in 2008, the year the Great Recession began. They plunged to less than $4 the next year and to $2.76 in 2012, according to BP\u2019s Statistical Review of World Energy, which R\u00fchl oversees.<\/p>\n

Enticed by cheap gas, electric utilities have rushed to abandon coal in favor of gas in their power plants.<\/p>\n

\u201cLast year, what we have seen is the biggest replacement of a single fuel with another fuel at least for the last 40 years, probably on record,\u201d R\u00fchl said.<\/p>\n

But the coal mines didn\u2019t shut down.<\/p>\n

R\u00fchl said American coal was released onto the world market. It found its way to Europe, where it replaced natural gas \u2014 which is more expensive there \u2014 in power plants.<\/p>\n

And this is where the global energy shakeup affects Southwest Colorado a second time.<\/p>\n

European natural gas then went to Asia to replace energy from nuclear power plants, which Japan shut down after the tsunami and meltdown at its Fukushima plant.<\/p>\n

That leaves nuclear power as the biggest loser \u2013 bad news for anyone looking for the return of a previous energy boom, when Southwest Colorado was at the center of the country\u2019s uranium industry.<\/p>\n

\u201cWe had the lowest nuclear production last year since 1984,\u201d R\u00fchl said. \u201cWe think the share of nuclear in global energy will remain relatively constant.\u201d<\/p>\n

The massive shifts will change more than just the local economy. U.S. oil production jumped a stunning 13.9 percent in 2012, according to BP\u2019s Statistical Review of World Energy, while U.S. oil consumption fell slightly. R\u00fchl thinks that means the Middle East will become less important to the United States and more important to China, the world\u2019s second-largest energy consumer.<\/p>\n

And the shift from coal to gas in U.S. power plants helped create the country\u2019s biggest annual decline in greenhouse gases, he said.<\/p>\n

But the global decline in carbon emissions wasn\u2019t as big as it could have been, because Europe is now burning more American coal, he said.<\/p>\n

joeh@cortezjournal.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

economist Christof Ruhl. Photo courtesy of BPdu1-i-syn Christof R\u00fchl, chief economist for BP, has traced a chain reaction from shale drilling in the United States that has moved east across the globe. Southwest Colorado was once the epicenter of the nation\u2019s best natural gas field, the San Juan Basin. While the field remains productive, […]<\/p>\n","protected":false},"author":1,"featured_media":57938,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[875,876,13],"naviga_topic":[],"class_list":["post-57937","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-energy-and-resource","tag-energy-resources","tag-frontpage-lead"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/57937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=57937"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/57937\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/57938"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=57937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=57937"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=57937"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=57937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}