What analysts have dubbed the shale gale--the biggest energy boom in North America since the immediate postwar era--is likely to recast the continents energy outlook well into the mid-21st Century.
North America is underlain with massive shale deposits that trap natural gas and oil deep underground. Petroleum geologists have long known of these deposits, but it has been only within the past decade that energy companies have begun to tap these resources, using hydraulic fracturing and horizontal drilling to bring a new energy bonanza to market.
Charles Nevle, manager of energy analysis for Evergreen, Colo.-based Bentek Energy LLC, said at a National Association of Steel Pipe Distributors conference that the shale boom for natural gas, natural gas liquids (NGLs) and oil continues. He told the audience that production of natural gas in North America will increase by 25 percent by 2018, production of NGLs will rise by 70 percent or more and oil production should grow by 49 percent.
Nevle expects much of the NGLs growth will be destined for the export market, while natural gas will be targeted primarily at electric power generation and industrial demand. The increase in crude oil growth should wean the United States off exports, he noted, while vast new deposits of Mexican natural gas should fuel that countrys rapid industrialization.
The result of the energy boom should be a windfall to the domestic steel industry. Significant development in new infrastructure is required to meet the demands of a booming energy sector, Nevle said.
The energy shift in North America will require millions of tons of steel tube, pipe, sheet, rod and other products to build and expand pipelines, power plants, liquefied natural gas export terminals, fractionators, processing plants, steam crackers, condensate splitters and refined product export terminals. Since demand is outgrowing pipeline capacity, steel producers also will be called upon to provide millions of tons of rail and steel for tanker cars to get excess energy capacity to market. Nevle said there are more than 10,000 miles of crude oil pipeline projects on the drawing boards for 2014 and 2015.