Volume of natural gas production increasing faster than expected, even with fewer new wells

[happyslug]

5. Not unexpected.

Shale Natural Gas has an inherent problem, most contracts were signed years ago, and those contracts contain a MUST Drill clause. No drill, the gas companies loses the right to drill. Thus a lot of wells were going into production more to minimize loss then to maximize gain (i.e. the right to drill has already been agreed to and payment for the right has already cleared the bank, thus unless the gas company wanted to lose its whole investment, it had to drill just to get some gas into production to pay off not only the land owners, but also their investors. It was almost a ponzi scheme, except the Gas Companies did not intend to enter into it, they just did.

Now, how long will these wells stay in production is an open question, production life is short, with an average of 60% production DROP after two years in production, 70% after three on on average 8% after that date, with most wells out of production within seven years:

http://www.marcellus-shale.us/Marcellus-production.htm
http://shalebubble.org/wp-content/uploads/2013/02/SWS-report-FINAL.pdf
http://blogs.worldwatch.org/sustainabilitypossible/shale-bubble/
http://americanenergycoalition.com/slide-view/the-big-fracking-bubble-the-scam-behind-the-gas-boom
http://shalebubble.org/

Now, right now, we are still in the boom section of Shale production, it is expected to last for a few more years. I have read the peak production will be 2017, then a rapid decline.

Total US Natural Gas production:
http://www.eia.gov/dnav/ng/ng_prod_sum_dcu_NUS_a.htm


Shale natural Gas production:
http://www.eia.gov/dnav/ng/ng_prod_shalegas_s1_a.htm


http://www.eia.gov/petroleum/drilling/pdf/marcellus.pdf

http://www.nofrackingway.us/2013/11/06/art-berman-bursts-shale-gas-bubble/