PGC: US natural gas resource estimate rises 25% in 2 years

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.”

Practices improve

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 nicks@pennwell.com.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected