How Much Natural Gas Remains in the USA? 93 comments
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A number of sources claim that we have hundreds of years worth of natural gas reserves remaining in the USA. Is that really so?
The most authoratative natural gas information is available from EIA.
Based on data from EIA, the annual US consumption of natural gas is about 23 TCF (23 trillion cubic feet). The proven natural gas reserve, as shown here, is 237.726 TCF.
So that's roughly 10 years worth of natural gas left in the USA.
Where did the claims of hundreds of years worth natural gas come from? One such claim is from NaturalGas.org.
They claim, based on EIA data, the US natural gas reserve estimate is 1747.47 TCF. So if you divide that number by annual usage of 23 TCF, you have 76 years worth of natural gas.
Funny I just came back from the EIA web site. All I saw was 237.726 TCF proven reserve, as of the end of 2007. Where did the 1747.47 TCF number come from? Let's scrutinize the NaturalGas.org number a little bit closer:
| Natural Gas Technically Recoverable Resources | |
| Natural Gas Resource Category (Trillion Cubic Feet) | As of January 1, 2007 |
Nonassociated Gas | |
| Undiscovered | 373.20 |
| Onshore | 113.61 |
| Offshore | 259.59 |
| Inferred Reserves | 220.14 |
| Onshore | 171.05 |
| Offshore | 49.09 |
| Unconventional Gas Recovery | 644.92 |
| Tight Gas | 309.58 |
| Shale Gas | 267.26 |
| Coalbed Methane | 68.09 |
| Associated-Dissolved Gas | 128.69 |
| Total Lower 48 Unproved | 1366.96 |
| Alaska | 169.43 |
| Total U.S. Unproved | 1536.38 |
| Proved Reserves | 211.09 |
| Total Natural Gas | 1747.47 |
| Source: Energy Information Administration - Annual Energy Outlook 2009 |
Notice the last three lines? Total natural gas reserve is 1747.47 TCF. But only 211.09 TCF is proven reserve. The other 1536.38 TCF is unproven and undiscovered natural gas.
How do you even know that part of undiscovered natural gas reserves even actually exist in the first place? Even if it does exist, which could be a long stretch, undiscovered natural gas reserves are irrelevent until they are actually discovered and actually produced.
I believe we are facing a looming North American natural gas crisis. The currently known reserve is going to run out in 10 years. The "undiscovered" reserves of natural gas, assuming they do exist, have not been discovered in more than half a century of North American natural gas exploration activities. What are the odds that they could be discovered in the next 10 years? The odds don't looking very good. Look at the pace of new natural gas field discoveries in recent years, it surely does not look encouraging at all.
Full Disclosure: I hold significant long positions in UNG, which is relevant to the discussion here. I hold other positions unrelated to natural gas.
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In new areas that are just now coming into financial reality such as animal waste and land fill recovery are not even being counted.
I also hold positions in both transportation of nat. gas as well as production.
It's my understanding that "proven reserves" is somewhat of a floating number.
As the price of the commodity rises, the reserves rise as once unprofitable developments become feasible.
Correct me if I'm wrong, but I'm pretty sure that's how the accounting is done.
What's your latest quote on a gram of Tellurium?
seekingalpha.com/artic...
i have not heard many credible experts say we have "hundreds of years worth of natural gas reserves" (key there is the "s" on the end of hundreds), but i have heard 100 years worth, and would agree with that estimate. further, considering the haynesville shale may well turn out to be the 4th largest nat gas field in the world, and the economic recovery of many other shale regions, and that nat gas production is dominated by small independents (and therefore cannot be controlled as easily as oil), i don't think you'll see big runs in nat gas prices (inflation adjusted) for quite some time. i add "inflation adjusted" to that comment because, at the rate the fed and treasury are working (unconstitutionally) to print US dollars as fast as they can, we're guaranteed to see prices of EVERY commodity go higher in the years to come. all this aside, you won't see natural gas prices off a boom-bust yo-yo until the US does what it should so obviously do to solve the economic, environmental, and national security issues as a result of its 60% addiction to foreign oil: adopt natural gas transportation.
in 1994 when i was working in west virginia coalbed methane was being produced & entered the commercial NG stream & was therefore considered a source of NG.
> jack
In the exploration for oil, we learned these lessons. The resulting natural gas flow has been huge, and we have quit exploring because of over-supply.
If we ever learned how to economically extract oil from shale, we would have a 500 years supply. Unfortunately this has not occurred.
We have learned how to economically extract gas from shale, and that is the origin of the 100 years estimate.
First: shale gas is economical at somewhere between $5 and $7 per mcf. There is an ever-decreasing amount of risk to these resource volumes in the shales. So discount the shale gas at your own peril. Even if only half of it is actually recoverable, then we still have a large volume of reserves to transition us to another source.
Second: someone earlier pointed out excatly that proven reserves are dependent on price. Push the price of gas up to $10 and you'll see an increase in proven reserves and you'll also find exploration activity picking up. Those "undiscovered" resources are based on past experience and geological studies of new basins. Start drilling and you will see these resources discovered.
Again, at today's prices, no there is not 75 years of reserves. But let the price rise a bit to that $7 range, and you'll see a bunch of new reserves. Get the goofy government off of our backs and you'll see even more.
One thing I do agree with you on: there is a "crisis" looming. But "crisis" needs to be defined: I view the crisis as gas prices rising to maybe $10 or more for a short period of time, but then drilling will rapidly increase, supply will outstrip demand and prices will decline. We'll constantly be in this up and down tug of war but at a reasonable price (less than $15/mmBtu) there is plenty of gas!
1) Remaining proven global conventional NG reserves are currently 6,400 TcF
2) The potential global reserves of non-associated NG(unconventional NG, shale gas, tight gas, chalk gas, etc.) are in the 30,0000 to 40,000 TcF range.
3) He quotes USGS methyl hydrates reserve numbers at 100,000 to 300 million TcF worldwide.
seekingalpha.com/artic...
Let me quote this from your article, which I presume must overwhelmed you but it completely underwhelmed me:
"In 1969 GHK, and its partners drilled a well over 24,000 feet deep in the Anadarko Basin. The well has produced 21 Bcf of natural gas (the equivalent of 3.6 million barrels of oil) and is still producing today. "
That's an very expensive well to drill, 24000 feet deep. Over the 40 years what investment return did it bring to the investor? 21 BCF natural gas is 21 million TCF, at roughly $2 or less per TCF averaged over the past 40 years, it brings in a revenue of $42M. The oil equivalent of 3.6M barrel, if averaged at about $15 per barrel in the 40 years, is roughly $54M. The initial drilling cost, inflation adjusted, plus the maintenance and operation cost over the 40 years, must far exceed the product revenue over the 40 years. This is an absolutely losing investment.
If that's the best Robert Hefner can brag about in his book, then he does not have much credibility. The US natural gas consumption in one day would be 62 BCF, three times higher than the accumulative production of that one deep well you cited.
On Oct 04 10:16 AM Michael Fitzsimmons wrote:
> a much better source of information on this subject is Robert Hefner
> III"s book, "The Grand Energy Transition". i won't repeat the data
> and logical arguments presented in that book, or refute the lack
> of same in this article, other than to say natural gas is abundant
> - in the U.S. and in the world.
But, if you were to cap the 50 state capitols and the big one in Washington DC, and if you were to capture all that natural gas, the entire world could be supplied forever.
The company has improved its initial production rate on wells here from 1.261 million cubic feet per day in 2007, to 3.611 million in the second quarter of 2009. It has done this with longer laterals on multi stage hydraulic fracturing operations. Southwestern Energy has seen its finding and development costs fall from $2.55 per Mcfe in 2007 to $1.53 per Mcfe in 2008.
Similar finding costs have been reported for gas in the various shales. It is economical way below 5 bucks, even assuming the need for total costs to = 3x finding costs.
CHK CEO Aubrey McClendon has said that they will increase drilling and production at 2 to 3x finding costs .
XTO just hedged 55% of their 2010 natgas production at 7.49 per mcf. I think that is a great bit of hedging.
Undiscovered resources are those deposits that have not been pinpointed, but are generally expected to exist based on geologic conditions. They are not just creating a wild guess. Drill down on your links a bit further next time.
Recent American technological breakthroughs, horizontal drilling and multi-stage fracture stimulation of reservoirs, have made the drilling and completing of natural gas wells much more efficient and productive and vast new reserves new of natural gas accessible here within our borders.
if we start using NG for transportation, it's price will increase dramatically and become more volatile-- how will that effect utuility electricity prices? stupid!
Proven reserves refers to natural gas that can be extracted economically at current market prices. So proven reserves vary as a function of market prices AND production costs.
In the US their appears to be a lot of environmental considerations surfacing with respect to extraction of natural gas through the use of hydraulic fracturing. Treatment of toxic materials involves costs. Costs to build pre-processing facilities (used to reduce toxic transport volume) costs to transport toxic materials, costs to build final toxic waste processing capacity, costs to process the waste materials, costs for storing highly condensed secondary toxic waste products, costs for environmental reports.
How will the increasing awareness of environmental concerns effect the cost structure of gas produced using hydraulic fracturing? Will environmental safe gas using hydraulic fracturing be less expensive than transported gas where recovery processes are not subject to environmental concerns? Effects of increased environmental based regulations could have a marked effect on the amount of natural gas that can be considered as Economically Recoverable Proven Reserves.
The following contains a more detailed description of the environmental concerns related to hydraulic fracturing. Its from these materials that I developed the preceding summarization. I do not take a position pro or con on the need for environmental protection. My central theme is that environmental protection is a reality in the United States, and as a consequence data concerning so called "proven reserves" needs to be considered in light of the economic costs of producing environmentally safe natural gas locally, or importing it at the lowest price irrespective of environmental consequences. The only way this economic reality can be suspended is through removal of environmental protections (not likely), or trade barriers (also not likely).
______________________
Hydraulic Fracturing:
With respect to amount of gas available, one of the major reasons gas reserve figures in the United States have recently increased concerns the use of new drilling techniques (hydraulic fracturing) to extract natural gas in shale formations. It's hydraulic fracturing that has made the Marcellus Shale and other difficult-to-reach deposits of gas accessible to drillers. Hydraulic fracturing shoots millions of gallons of water, sand and CHEMICALS underground at high pressure to break up rock and release gas. Hydraulic fracturing a Marcellus gas well can require more then three million gallons and a single well can be fractured as many as eight times (24 million gallons per well?).
www.heralddeparis.com/...
When the DEC’s (New York's Department of Environmental Conservation) last impact statement was released in 1992, a typical well required only about 80,000 gallons of water. So hydraulic fracturing increases the amount of water needed by between 37.5 to 300 times. In addition, when the water is sucked back out of a well, it can contain NATURAL toxins dredged up during drilling, including cadmium and benzene, which both carry cancer risks.
Finally, water pumped in to perform the hydraulic fracturing contains CHEMICALS. One of the things that the new DEC's guidelines establishes is that the drillers MUST DISCLOSE THE CHEMICALS ADDED TO THE WATER USED IN THE PROCESS. Something that drillers have refused to do in the past! That refusal raises all kinds of red flags.
So there are at least five issues here:
1) Where do they get the water to work the wells?
2) What do they do with the pumped out waste solution?
3) What is the make-up of that waste solution?
4) How much of the chemicals in solution remain in the ground?
5) How will the remaining chemicals disperse in the ground? The toxic plume question.
Are these just "Academic" concerns?
New York's Marcellus Shale is mined within New York City's watershed, a central Catskill Mountain area that supplies drinking water to nine million people. Hence there is concern among New York City residents and politicians. For example, consider the following statement (extracted from the above link) from Manhattan Borough president Scott Stringer:
"The State’s mitigation proposals are half measures. I believe the choice is simple: we either correct this error and ban drilling now, or soon enough the officials entrusted with protecting our environment will be asked to explain why they were asleep at the switch when it mattered most.”
I see no reason why the mining of Marcellus shale gas in Pennsylvania or the mining of shale gas anywhere else in the US will not raise similar concerns among the public.
How are waste by-products handled?
Many kinds of waste pits, which have been responsible for water contamination in other parts of New York, are prohibited inside the New York City watershed and limited elsewhere in the state. This means that drillers are going to be required to store their waste in steel tanks. So each well is going to need "temporary" storage capacity for between 3 to 24 million gallons of contaminated water.
In 2008, ProPublica (which describes itself as an independent, non-profit newsroom) reported that New York was unprepared to treat the wastewater itself and the DEC said drillers would have to ship it to neighbouring Pennsylvania. But ProPublica found that Pennsylvania’s specialized treatment plants don’t have the capacity for it either. Of course there is also the question of how people in both states are going to tolerate the transportation of large amounts of toxic materials over their public roads. Even if a pipeline is built the movement of Hazardous Materials will involve Federal Hazardous Materials Regulations.
Rubber Stamp Actions:
The ProPublica investigation found that the DEC had told state legislators that hydraulic fracturing was safe, even though the agency had NOT studied or discussed the sometimes dangerous chemicals that it uses and that later wind up in its waste. How can any agency declare a process is safe if they don't know all aspects of the process under consideration?
The behaviour of New York's DEC seems to be out of touch with the political realities of the "Greening" of America. This conclusion appears to have appeared on the radar of local politicians, and that suggests changes will be forthcoming with respect to the regulatory environment governing hydraulic fracturing. The effects of increased regulation should drive production costs of natural gas using hydraulic fracturing higher, and that could decrease the amount of natural gas in the US considered as Economically Recoverable Proven Reserves.