Technically recoverable US natural gas resources were a record 2,384 tcf at yearend 2012, 25% (486 tcf) more than the previous record-high assessment 2 years earlier, the Potential Gas Committee reported.
Most of the growth came from new evaluations of shale gas resources in Atlantic, Rocky Mountain, and Gulf Coast states, PGC indicated. The biennial report, Potential Supply of Natural Gas in the United States, includes 2,226 tcf of gas potentially recoverable from traditional reservoirs (conventional, tight sands and carbonates, and shales), and 158 tcf from coalbed reservoirs, PGC said.
Atlantic states had the largest 2012 yearend potential (741.3 tcf from traditional reservoirs and 17.3 tcf from coalbed formations), followed by Gulf Coast states (521 tcf from conventional reservoirs and 3.4 tcf from coalbed formations) and Rocky Mountain states (421.3 tcf from conventional reservoirs and 51.9 tcf from coalbed formations). An estimated 1,073 tcf of shale gas represents some 48% of the 2012 yearend traditional gas resource, the report said.
Data from the Marcellus shale, where production averages 8 bcfd, actually may underrepresent what’s going on there because some state agencies still issue reports infrequently, noted John B. Curtis, a professor of geology and geological engineering at the Colorado School of Mines and director of the Potential Gas Agency there, which provides guidance and technical assistance to the all-volunteer PGC.
“We see no reason to back down from our Marcellus estimates,” he told reporters during an Apr. 9 briefing at the American Gas Association where the PGC’s latest estimates were released. “There’s still up-side potential not only in the Utica, but also the Upper Devonian shale in the Atlantic states.”
Production grows, too
Curtis said the changes from 2 years earlier, and not the latest record estimate, are the most significant development in the 2012 yearend report. “What’s also important is that production growth backs us up,” he added. The committee’s next step will be to try and assess US natural gas liquids potential. “With the price differential between gas and oil, that’s where the most interest is,” Curtis said.
Low gas prices definitely make some US gas uneconomic to producer, observed another PGC member, Michael K. Decker, executive vice-president of Gasco Energy Inc. in Denver, which has 130 Uinta basin wells but hasn’t drilled a new one there in 3 years. Delays getting federal permits—including an 8-year wait for an environmental permit—also have a negative impact, he said.
Activity has picked up with the arrival of Anadarko Petroleum Corp. and other larger independents, Decker continued. Uinta basin producers increasingly drill multiple wells from single pads, and use potassium chloride instead of gels, which tend to break down and increase flowback, he said.
“The industry goes through cycles,” said Christopher B. McGill, AGA’s vice-president of policy analysis who also participated in the briefing. “About 50% of reserves in the US are owned by the 30 largest companies, with thousands of smaller independent producers holding the rest. Prices remain low, but drilling activity has increased in some areas and storage inventories are down.”
Curtis said the shallow, quickly producing wells that characterized Pennsylvania’s gas production 10 years ago still are being drilled by smaller producers, but most activity there is in the deeper Marcellus shale. “Before production began there, a good Pennsylvania well produced 250 MMcf,” he said. “Now, one produces 8 bcf.”
McGill said producers also continue to improve their exploration, production and water management practices and local community outreach in the Northeast despite significant opposition. “In my view, much of the public discussion there tends to be based on information that’s 3 years old,” he said.
“The industry has advanced its operating practices,” McGill maintained. “Producers aren’t closing their eyes and stopping up their ears. They are working hard with communities.”
Curtis said PGC’s estimates, which cover 90 geological provinces individually, are only part of a US gas supply equation which has other less predictable elements. These include price, regulatory and land issues, rig availability, pipeline capacity, technology, a skilled workforce, and environmental issues, he explained.
“This committee’s work is an important—but not the only—part of the picture,” Curtis said. “When all these elements come together with prudent regulation, however, we’re confident we’ll be able to meet future demand.”
The report provides further confirmation that the US has an abundant gas supply and shows the country should be taking greater advantage of it, Erica Bowman, chief economist at America’s Natural Gas Alliance, noted after the briefing. “No other energy source has the potential to improve air quality, boost our economy, and add to our nation’s energy security on such a large scale,” she declared.
Contact Nick Snow at email@example.com.