The Energy Information Administration reports 1990 U.S. natural gas reserves increased for the first time since 1981.
Reserves inched up 1.3% to 169.346 tcf, largely because of coalbed methane development.
Gas reserves in Alaska and the Lower 48 not only increased, but the latter are higher than they were in 1985.
Gas discoveries increased 23.3% and totaled 12.368 tcf in 1990. Major finds were drilled in New Mexico, in Alabama state water, and off Louisiana.
Crude oil reserves dropped less than 1% to 26.254 billion bbl, close to the average decline of 1.2%/year for the past decade. Crude oil discoveries were 20% less than the annual average for the past decade.
Natural gas liquids reserves dropped 2.4% to 7.586 billion bbl in 1990.
NATURAL GAS
EIA said natural gas reserves increased in Alaska because revised estimates of future gas requirements on the North Slope caused some technically recoverable Alaskan gas to be reclassified as economically recoverable proved reserves.
Reserves in coalbed methane fields increased 1.41 1 tcf in 1990, while production doubled.
Increases in coalbed methane reserves in New Mexico, Alabama, and Colorado accounted for three fourths of the net growth in Lower 48 proved reserves of dry gas.
Development of coalbed methane resources has rapidly expanded because of tax incentives and an improved understanding of the underlying production technology.
The tax credit is more than 86 cents/MMBTU of coalbed methane produced in 1990, which was more than half the average U.S. wellhead price of $1.67/MMBTU, EIA said. Coalbed methane proved reserves were 5.087 tcf at yearend 1990, while the revised estimate for 1989 is 3.676 tcf.
New field discoveries of dry gas amounted to 2 tcf, substantially higher than in 1989 and higher than the prior 10 year average of 1.934 tcf/year.
Field extensions increased 25% to 7.95 tcf, and gas reserve additions from new reservoirs were up 7.5% at 24.12 tcf.
Production of dry gas went up 1.5% to 17.2 tcf for the year.
EIA said in recent years the net of revisions and adjustments has been playing a larger role in sustaining Lower 48 gas reserves. In 1990, about 6.4 tcf of those revisions were added, or about twice the annual average for the past 10 years. Larger than usual revisions were caused by more effective development drilling and increased well completions.
CRUDE OIL, GAS LIQUIDS
EIA said the 0.09%, or 247 million bbl drop, in crude oil reserves in 1990 was close to the annual average decline of 1.2%/year the past decade.
Most of the U.S. decline was caused by a 150 million bbl or 2.2% decline in Alaskan reserves. Lower 48 reserves of crude oil declined by only 0.5% to 19.73 billion bbl.
A number of areas had increases in reserves, including Texas with 140 million bbl and the Gulf of Mexico Outer Continental Shelf with 83 million bbl.
EIA said two thirds of the revisions and adjustments to reserves occurred in fields in four areas: the Alaskan North Slope from enhanced oil recovery projects and installation of major gas handling facilities, West Texas from enhanced recovery projects, California due to expansions of heavy oil projects, and the Gulf of Mexico OCS due to improved field performance.
Crude oil discoveries amounted to 689 million bbl in 1990, down 3% from 1989 and 20% less than the 861 million bbl/year average for the past decade. Texas, Gulf of Mexico OCS, and Alaska dominated the crude discoveries with more than three fourths of the total.
EIA said crude oil discoveries for the past 5 years have been relatively low, reflecting a similar trend in exploratory drilling following the oil price collapse of 1986. However, the discoveries added per exploratory well have increased substantially, easing the effect of the 68% decline in exploratory oil drilling since 1985.
Gas liquids reserves declined despite the increase in gas reserves because the new discoveries tended to be dry gas.
Total liquid hydrocarbon reserves--crude oil plus gas liquids--were 33.8 billion bbl at yearend 1990, a 430 million bbl or 1.3% decline from yearend 1989.
AGA REACTION
Mike Baly, American Gas Association president, said the 111% replacement rate for Lower 48 gas reserves in 1990 makes it clear that more gas should be used to replace oil imports and help clean up the nation's environment.
Baly said the high reserve replacement level coincides with a growing number of gas well completions, which reached nearly 10,000 wells in 1990, the highest level since 1985.
Baly warned that continued replacement of gas reserves will require a healthy drilling and exploration industry, which is now facing difficult choices because of weak wellhead prices and a low count of active rigs. He commended producers for finding more gas despite low prices and reduced drilling.
"Signing of more long term natural gas purchase contracts and continued development of new markets, including natural gas vehicles, power generation, and natural gas cooling, will go a long way toward firming up wellhead prices and assuring ample future supply," Baly said.
He pointed out that for the 11 years prior to passage of the 1978 Natural Gas Policy Act, the replacement rate for the Lower 48 was only 46%. But for the 11 year period from 1980 through 1990, Lower 48 reserve additions have averaged 95% of production.
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