The Barnett was the first shale field to undergo major development, and gas production has gone up tenfold since 2001, so that it now produces 7 percent of the nation’s supply of natural gas. At least two other shale formations, the Haynesville in Louisiana and Texas and the Marcellus in Appalachia, are believed to be even larger, though substantial production in those will take another two to five years.
Prospectors have identified at least two dozen shale beds in North America that could contain large amounts of gas.
“Production is clearly growing, and the growth is sustainable,” said Michael Zenker, a natural gas analyst at Barclays Capital.
A Deutsche Bank report, by the analyst Shannon Nome, recently estimated that production from the eight largest shale fields was likely to hit 6.6 billion cubic feet a day this year, or 11.8 percent of national gas production, and then rise to 14.5 billion cubic feet a day by 2011 — almost a quarter of domestic production.
“Shale is the most significant domestic natural gas find in 50 years,” said Chris Ruppel, an analyst at the institutional brokerage firm Execution, “which means the United States will become gas independent, and more industrially competitive versus Europe for gas-intensive industries such as chemicals, fertilizer, smelting iron and aluminum.”
Shale gas could ultimately be important beyond North America. The rest of the world has shale formations on an immense scale. Many of them are known to contain gas, but exploration and assessment of those fields with the new production techniques have barely started.
Several large shale fields are being explored in Canada. In the United States, real estate speculators are becoming overnight millionaires in Pennsylvania, Louisiana and Texas by buying up parcels of land and flipping them to companies that drill for natural gas. Wildcatters are ordering every rig they can get their hands on, and paying signing bonuses of $25,000 an acre to drill below houses, schools and churches. Pipeline companies are building as fast as they can to get the new gas to market.
As the frenzy unfolds, some energy experts urge caution in projecting how big the new supplies will be and whether they will alleviate the loss in productivity of conventional wells, particularly those in the Gulf of Mexico.
“It’s hard for me to believe we will have more domestic gas production in six years than we have now,” said Chip Johnson, president and chief executive of Carrizo Oil and Gas, a Houston company involved in several of the shale fields.
The Energy Department’s 2008 estimates for shale gas reserves that may one day be economically produced stand at 125 trillion cubic feet, about a seventh of the most optimistic industry estimates. Jeffrey Little, a department gas analyst, said the government estimate was based on 2006 data and could increase after further testing.
“The larger reserves could very well be out there, but their magnitude is uncertain,” he said.
Some industry experts warn that shortages of engineers and rigs, scarcity of pipelines near some shale fields and fights over land and water use could slow development in some states.
In the Marcellus field, drilling and pipeline work must be done over woody and hilly terrain, and enormous amounts of water are needed to fracture the shale. Drilling has been halted in places after local regulators caught companies drawing water from streams without permits.
“We see natural gas as potentially a very important transitional fuel, but we can’t use it at the expense of our natural resources,” said Kate Sinding, a senior lawyer for the Natural Resources Defense Council, who warned that water-intensive drilling in shale could threaten local water supplies and aquifers.
Domestic gas production was in decline from the early 1990s to 2005, before production from shale beds and some lesser unconventional fields led to increases beginning in 2006. In the meantime, consumption increased by more than 15 percent, satisfied largely by rising imports.
Prices in recent years soared from less than $2 per thousand cubic feet in 1999 to more than $13 as recently as last month, before a precipitous decline in recent weeks. Natural gas closed Friday on the New York Mercantile Exchange at $7.84 per thousand cubic feet, the lowest price since Feb. 1.
With the growth of power generation from natural gas, the Energy Department estimates that gas consumption will increase 3 percent this year and an additional 1.7 percent in 2009. But that is well below expected supply increases.
Such increases carry risks. Some in the gas industry fear that if prices fall too much, producers will pull back on their investments in drilling and development. “If prices drop much more,” said Mr. Johnson of Carrizo Oil and Gas, “producers will slow down or at least not be as aggressive.”