Exploring Natural Gas Resource: Shale Plays

Shale gas arrived in 1999. Since then, shale has seen large formations in Texas's Barnett Shale, Arkansas's Fayetteville Shale, Louisiana's Haynesville Shale and the Northeast's Marcellus Shale.

The primary ingredient in natural gas is methane, a chemical compound in sedimentary rock formations. Methane has to undergo processing to rid of other materials like propane and butane before the natural gas is ready for use.

Unconventional Gas Types

Almost half of US production comes from three unconventional gas types:

• Shale gas: Resource comes from shale rock.
• Coalbed methane (CBM): CBM hails from coal seams.
• Tight sands (TS): Found in low-permeability sandstone, siltstone and carbonate reservoirs.

All three belong in the unconventional gas category. This means it's harder to access the resources and extract them. But they may not be unconventional for a lifetime. If technology advances enough, they can turn into conventional gas resources.

Natural Gas Sees a Shift

Big oil's Exxon deal with natural gas company XTO Energy is a big deal in the industry because Exxon's involvement has put a spotlight on natural gas. Furthermore, Exxon's entry in natural gas move may convince the government and industries relying on gas that natural gas is a viable solution. As a result, we may see more investments in natural gas to advance technology that ensures safe drilling and extracting.

Jim DiPeso of The Daily Green writes, "Once burned off by oilmen as a nuisance, gas has attained a charmed image as the elixir that could deliver both energy security—take that, OPEC!—and clean energy—take that, King Coal!"

Ed Markey, Massachusetts Democrat and House Energy and Commerce Committee's energy subcommittee chair, has had run-ins with Exxon concerning policies. In an interesting turn of events, Markey spoke of Exxon's merger with XTO saying that it "signals a 'fundamental shift' in America's energy markets. The shift, he explained, is the boom in 'shale' gas that has attracted Exxon and other big players in the energy world."

Shale Gas Plays and Fracking

The companies in shale gas plays use hydraulic fracturing, also known as fracking, to access and release the deposits.

While natural gas burns cleaner than oil and coal, people have concerns about hydraulic fracturing. Some say the drilling process contaminates drinking water.

A report from the Environmental Working Group has found a link between fracking and polluted drinking water and property damage. As a result, the group recommends implementing Safe Drinking Water Act safeguards for hydraulic fracturing.

Exxon has a protection clause in place in its deal with XTO to exit the contract if the government outlaws fracking. Regardless, much is happening in the world of natural gas and with a few bumps along the way.