Natural Gas Keeps Growing – First in the U.S. – now Russia


July, 2016

Oil and Gas

Natural gas is becoming a leader among the planet’s energy sources, a well-known fact among the United States, Russia, and Ukraine.

The natural gas industry has been full of surprises.

In the United States, natural gas has seen enormous growth, but also scary declines. In particular, 2005 was hard for the industry, in part because of damage to energy infrastructure along the Gulf Coast from hurricanes Katrina and Rita. At the time, the world thought the U.S. would need to minimize its efforts in natural gas from shale and turn to crude oil or Liquefied Natural Gas (LNG).

Luckily, the U.S. didn’t need a change in material, but rather just a change in tactic. New drilling techniques such as hydraulic fracturing and horizontal drilling have allowed producers to find more gas.

Oil and Gas Industry Optimization

The year 2005 saw natural gas production drop below 50 billion cubic feet per day (Bcf/d). In 2009, however, the U.S. was recognized as the world’s largest natural gas producer, surpassing even Russia. By 2014, production had soared to more than 70 Bcf/d. Production had surged by fifty percent.

Even better, drilling techniques were still improving, and projections for the future were even higher. Even a 300,000 cf/d slip in 2016 didn’t prevent the nation from hitting a new production record that year, and the U.S. expected that 2020 would see production around 90 Bcf/d. In just a short decade, the United States went from a natural gas slump to being the world leader in natural gas production and a key exporter.

The U.S. is not the only country growing in natural gas.

Globally, the industry is growing, and natural gas is becoming a top commodity for energy production. Russia, the nation the United States exceeded in 2009, is also growing, and its growth has it in an odd spot. Russia’s government owns Gazprom, one of Europe’s major natural gas producers and transporters and the nation’s largest company. Its neighbor, Ukraine, owns Naftogaz, which shares that description in its own nation.

Ukraine has long been the only incoming path for natural gas to Europe, making Naftogaz and the country’s economy rely on that title. Russia and Ukraine’s major natural gas companies are currently contending for the ability to be Europe’s main incoming path for natural gas, a title which Ukraine has enjoyed solely until now. Russia is working with several other nations to create Nord Stream 2, which would mirror Ukraine’s pipelines, undermining Ukraine’s monopoly. The resulting conflict has been an international point of concern for some time now.

The nature of this conflict, however, does show what a force natural gas has become over the years. The world is constantly seeking new ways to create sustainable, clean energy, and at the moment natural gas appears to be among the most reliable and cost-effective sources of energy in the world.