World’s Largest Producer of Natural Gas? Now It's U.S.

Jan. 13, 2010 11:09 AM ETUNG, GAZ-OLD, APC, COP, PXD, CHK, MMR10 Comments
Vinod Dar profile picture
Vinod Dar

For six years Russia was the world’s largest producer of natural gas. Now the USA has overtaken Russia to again become the world’s largest producer. The US is also the largest consumer of natural gas while Russia is the second largest. It is estimated( by industry and by the governments of the US and Russia) that over the past 12 months US production was about 22 trillion cubic feet (Tcf), an increase of 3.7% over the previous 12 months while Russian production was about 20.5Tcf, a decline of 12% as both Russian GDP and industrial output fell sharply.

The US natural gas industry has grown steadily and powerfully over the past 10 years in terms of expanding the resource base, the reserve base, production and logistical capacity and in actual production. The chief drivers have been technological and business process innovation, risk capital, the imagination and entrepreneurship of the independent E&P company, start ups, attractive business models, the substantial and continuing expansion of field and take away infrastructure, and very recently the substantial commitment of majors and mini-majors to the upstream natural gas industry.

Over the past 10 years proven US natural gas reserves have risen by nearly 50% and are now the highest in a generation, at about 250 Tcf (estimated as of mid 2009). The highest level reached was 293Tcf in 1967. This level is likely to be exceeded within 12 months, given the most recent pace of reserve additions. The US is embarked on multi-year period when annual net reserve additions could, on a sustained basis, be the greatest ever attained in the history of the US natural gas industry.

In just the past 3 years resource mapping and delineation has accelerated so much that US Government statistics are obsolete as soon as they are published and

This article was written by

Vinod Dar profile picture
I am the managing director of Dar&Company in Bethesda, MD. We provide business advice and corporate governance coaching to presidents, CEOs, and chairmen of energy and utility companies. Our clients have ranged from the largest utility holding, energy finance and energy technology companies in the world to energy funds, operating start ups, spinoffs and near IPOs. We offer no advice on securities of any kind and recommend no companies (other than as transactional, merger, acquisition or investment partners for clients). I have been in the energy industry since my college days at MIT, where I got my start in energy at the MIT Energy Lab as a graduate student in the mid-late 1970s. I hold degrees in engineering, corporate finance/international business (MBA) and applied economics (doctoral). I have served on the boards of 5 publicly traded energy operations and energy consulting firms. I have been CEO of 2 natural gas and electricity operations, marketing and trading companies. I have also founded strategy and risk management practices at 2 major energy consulting companies. I regret not providing company specific investment ideas or indications in my articles. This is owing to my wife’s federal government responsibilities and the nature of my professional activities.

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