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By Michael Kanellos

Maybe natural gas isn't as bountiful as some like to think.

The United States Geological Survey this week issued a report stating that the Marcellus Shale formation contains 84 trillion cubic feet of undiscovered, but technically recoverable natural gas and 3.4 billion barrels of technically recoverable natural gas liquids.

That's well up from the 2 trillion cubic feet estimate issued by the USGS in 2002 for the geological formation that straddles Pennsylvania and New York. The increase is due to advances in hydraulic fracking. However, it is far lower than the estimate of 410 trillion cubic feet that the Energy Information Administration has been recently using. As a result, the EIA said it would reduce its estimates by over 80 percent to match the USGS forecast.

The report will likely give natural gas skeptics ammunition in the debate over the role that gas can and should play in the energy strategy of the U.S. Proponents portray gas as the fuel of the future. Hydraulic fracking has opened up a large number of new fields and caused the price to plummet from $7 for a million BTUs to just over $4.

Fossil fuel reserves are heavily dependent on technology -- which seems to continually improve over time -- as well as economics. When the price of gas rises, the U.S. oil reserves magically go up because some deposits get cheaper to recover. Thus, proponents will look at history and argue that the 84 trillion cubic feet figure for the Marcellus formation, one of the richest in the U.S., will rise. Black and Veatch estimates that natural gas could account for 40 percent of U.S. power by 2035.

That's likely true. The size of the U.S. reserves will rise. But gas skeptics can argue that the new report underscores one of the chronic problems with fossil fuels: uncertainty. Reserves may rise, but gas may have to double in price to boost the size of the reserves to 200 trillion cubic feet, let alone 400 trillion cubic feet. The price of solar panels, meanwhile, generally only go one direction: down. Plus, the vast majority of the expenses with solar and wind are upfront. You know what the power will cost you 30 years in advance because you've essentially already paid for most of the equipment required to harvest it.

Sure, if the sun explodes, solar panels won't continue to produce energy, but if that scenario comes to pass, we likely will have larger problems on our hands. The real danger, say critics, is that a too-enthusiastic embrace of natural gas will cause investment in renewables to dry up. And when gas begins to sputter and increase in price, we will be in even worse shape.

History also shows that increased consumption of fossil fuels invariably leads to dependence on imports. Back in the '80s, the United Kingdom discovered huge deposits of natural gas in the North Sea, prompting a shift to gas. Gas was going to be an export. And it was for a while. But by 2020, 70 percent of Britain's gas will be imported. Energy security is a big issue.

An MIT report issued earlier this year noted that the U.S. will likely become a net importer of gas by 2030.

Expect more interesting studies from the USGS in the future. In 2008, it raised the estimates of recoverable shale oil in the Bakken formation in North Dakota to 3 billion to 4.3 billion barrels, 25 times higher than previous estimates. Proponents now claim that the estimate needs to be raised to 400 billion barrels. Skeptics note that the oil isn't even oil. It's a liquid that has to be cooked to become usable oil. The pollution, energy and money required to expand Bakken would be overwhelming. Shale oil, by the way, is not shale gas. It's a liquid fuel.

The USGS begins a new survey in October. It will take two years to complete.

Source: Marcellus Shale Estimates Slashed By 80%