Mark Anthony's  Instablog

A number of sources claim that we have hundreds of years worth of natural gas reserves remaining in the USA. Is it really so?

The most authoric natural gas information is available from EIA:
http://www.eia.doe.gov/oil_gas/natural_gas/info_glance/natural_gas.html

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 at the link below, is 237.726 TCF:

http://tonto.eia.doe.gov/dnav/ng/NG_ENR_DRY_A_EPG0_R11_BCF_A.htm

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:

http://www.naturalgas.org/overview/resources.asp

They claim, based on EIA data, the US natural gas reserve estimate is 1747.47 TCF. So if you devide 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 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 reserve even actually exist in the first place? Even if it does exist, which could be a long stretch, undiscovered natural gas reserve is irrelevent until it is 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" natural gas, assuming they do exist, have not been discovered in more than half a century of North American natural gas exploration activities. What is the odd that they could be discovered in the next 10 years? The odd is not looking very good. Look at the pace of new natural gas field discoveries in recent years, it surely does not look encouraging at all:

http://tonto.eia.doe.gov/dnav/ng/hist/rngr18nus_1a.htm

Full Disclosure:
I hold significant long positions in UNG, which is relevant to the discussion here. I hold other positions unrelated to natural gas.