April 3rd, 2008
Rockies the Saudi Arabia of natural gas
The Middle East is the most prolific oil and gas province in the world. You knew that. What most people don't know is how fast the Saudis' oil flows.
Stick a straw in the ground outside Riyadh and oil flows out at a rate 450 times faster than oil extracted from the average well in the United States. That's about the difference between framing a simple two-story during a 15-minute break rather than it taking all week.
heating oil
Do the Rockies have a lot of natural gas? Sure. Somewhere between 10 percent and 15 percent of the United States' natural gas resource is located here.
Trouble is, extracting it is extremely time, labor and material intensive, sometimes with environmental side effects. And even though the gas industry brings smarter people and better tools than ever to its task, they're extracting less and less gas per well (see chart above).
That's a function of two things. First, we discovered and tapped the biggest and most accessible pools of gas years ago, using more primitive exploration tools. Second, the industry is increasingly drilling in "tight sands" and coal deposits for its gas. So they have to drill more often, deeper and closer together. That takes more time and money.
Would a framer's job be easier if he couldn't use any power tools? This analogy fits.