SPECIAL REPORT: Model proposed for world conventional, unconventional gas

Dec. 17, 2007
A long-term conventional and unconventional natural gas production model has been developed for the world.

A long-term conventional and unconventional natural gas production model has been developed for the world.

This model estimates world natural gas production to peak in 2043. World conventional natural gas production will peak in 2038, and world unconventional natural gas production peaks in 2060.

World demand and supply for natural gas begin to diverge around 2030.

Unconventional gas reserves cannot significantly delay the peak in natural gas production. If methane hydrate estimates continue to decline, then hydrates will have no significant impact on world natural gas production.

Ultimately natural gas supplies will be adequate for the next 2 decades, but further research is needed to implement alternative sources of energy for the future and to ensure a smooth transition.

Definitions

Natural gas is a mixture of hydrocarbons that are gaseous at atmospheric conditions.1 Conventional natural gas is located in porous permeable reservoir rock and produced with standard producing methods. Unconventional natural gas is any natural gas that is not conventional and, in particular, can include coalbed methane, tight gas, shale gas, methane hydrates.

Tight gas is generally considered natural gas located in sandstone reservoirs with permeabilities less than 0.1 md.2 Shale gas is natural gas for which the source and reservoir is organic shale. Coalbed methane is produced from coal seams.3 Methane hydrates consists of natural gas trapped in solid water (ice).4

Natural gas, discussed as such, includes both convention and unconventional natural gas. This article will model for the next 100 years the world’s conventional and its unconventional natural gas, the latter including gas from shale, tight gas, and coalbed methane. Natural gas from methane hydrates is excluded from the current analysis due to the lack of meaningful data.

Previously we modeled natural gas production for North America,5 and here we will extend to the rest of the world. Due to limited LNG transportation worldwide, we will analyze conventional natural gas on a regional basis.

Unconventional gas production is analyzed on a world basis due to the limited data currently available in the literature. The same modeling approach mentioned above is used, but the coalbed-methane production model is modified. The new model is described in detail below.

The combined natural gas production model required only two inputs: an estimate of ultimately recoverable resources (URR) and historic production data. Initially we will approximate a conventional natural gas URR value for various world regions. Next we will determine unconventional natural gas URR estimates for tight gas, shale gas, and coalbed methane for the world.

An explanation of the coalbed methane model will be given. A model of natural gas demand for the future will be explained. The models of natural gas demand and supply will then be presented and discussed. Finally a conclusion and note of caution will be stated.

Conventional URR

A conventional natural gas URR estimate needs to be determined for the conventional natural gas production model; literature estimates 208-467 trillion cu m (tcm).6-13

Guseo,Imam,and Al-Fattah calculate world conventional natural gas URR estimate from mathematical and statistical models.6-8 Campbell, Sandrea, and the US Geological Survey estimate conventional natural gas URR for the world only, although Sandrea calculates conventional natural gas URR for some countries as well.10-12

Laherrere estimates the conventional natural gas URR on a regional basis,9 whereas Rempel’s estimate is calculated for every country.13 Laherrere’s conventional natural gas URR estimate is based on creaming curves. Rempel has determined conventional natural gas URR estimate as produced + reserves + yet-to-find.

The conventional natural gas URR estimate was limited to estimates that were determined geologically and where the estimate was broken into regions. Hence only Laherrere and Rempel’s conventional natural gas URR estimates were used.

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Laherrere’s estimate of 283 tcm is low, and Rempel’s estimate of 467 tcm is high, relative to literature estimates range. While Laherrere and Rempel have significantly different world conventional natural gas URR estimates, their conventional natural gas URR estimates agree for many regions. Table 1 shows the conventional natural gas URR estimate that is assumed in this article.

FSU estimate

The estimated FSU conventional natural gas URR value (Table 1) was determined as follows: We first attempted to approximate the Russia conventional natural gas URR, obtained from the mid 1990s and then used the same technique to determine the FSU conventional natural gas URR.

In 1998 Russia had produced about 11 trillion cu m of conventional natural gas.14 15 In 1998, typical conventional natural gas reserve estimates for Russia were around 47 tcm.16

Hirschhausen has estimated Russian conventional natural gas reserves by looking at individual fields and indicates reserves are 18-20 tcm.16

Are the Russian conventional natural gas estimates from Hirschhausen valid? Some Russian conventional natural gas fields have been analyzed by Laherrere, who plots annual production vs. cumulated production for a conventional natural gas field and, by extrapolating, approximates the field’s URR.9

Laherrere’s estimate of conventional natural gas reserves for Orenburg and Medvezhye gas fields relative to 1998 is about 0.5 tcm for both fields, which is slightly less than Hirschhausen’s estimate of 1 and 0.6 tcm, respectively, for these fields.

The low estimate of 18 tcm for conventional natural gas reserves from Hirschhausen has therefore been chosen. The Stockman and Yamal conventional natural gas fields are currently uneconomic and hence do not meet the definition of reserve.16 Ignoring the Stockman and Yamal fields, Russian conventional natural gas reserves have decreased from 34.8 tcm to 18 tcm, or approximately halved. We will therefore assume that half of the Stockman and Yamal fields’ values is accurate, and hence a further 6 tcm is added as stranded and uneconomic gas.

We now require an estimate of conventional natural gas still to be discovered in Russia. Table 2 shows the FSU conventional natural gas URR statistics, based around 1991-92.14

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In Table 2, A+B+C1 is generally regarded as conventional natural gas reserves, although Hirschhausen shows this to be an overestimate. The C2 value is generally referred to as probable conventional natural gas reserves.17 A 50% reduction in the C2 value is typically assumed; hence we will assume 6.7 tcm of C2 is extractable for Russia.

Grace states that C3+D1+D2 values were “subject to considerable exaggeration.”14 The stated C3+D1+D2 value for onshore West Siberia is 43.2 tcm, whereas other assessments indicate it is around 8-15 tcm.14 This is about a quarter of the stated value.

We will therefore assume that only a quarter of the C3+D1+D2 value is valid for Russia; hence a value of 36 tcm will be assumed for the total Russia C3+D1+D2 value. The conventional natural gas URR for Russia is then estimated at about 78 tcm. The rest of FSU has produced 4.1 tcm of gas by 1991.14

Assuming similar reductions used for Russia are valid for the rest of FSU, then A+B+C1 and C2 are reduced by 50% to 3.9 tcm and 0.8 tcm, respectively, and C3+D1+D2 reduced by 75% to 6.4 tcm. Hence, the rest of FSU has a conventional natural gas URR of about 15.2 tcm, and FSU has a conventional natural gas URR of about 93 tcm.

The conventional natural gas URR for FSU was estimated at 57 tcm and 175 tcm by Laherrere and Rempel, respectively. The FSU data require a detailed independent assessment by geologists before the error in estimate can be reduced.

Unconventional URR

An estimate of the unconventional natural gas URR is needed for the models. There has been limited work in the literature on unconventional gas URR estimates for the world.

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For this reason the unconventional models will be determined on a world basis rather than on a regional basis. Table 3 shows the world unconventional natural gas URR estimates that are assumed for the models.

CBM estimate

The coalbed methane URR estimate was determined by estimating the worldwide coalbed methane resource and by then determining a reasonable recovery factor. Table 4 shows the numerous resource estimates for coalbed methane.

It is important to note that the only regions with significant coalbed methane resources are North America, FSU, and Asia. North American coalbed methane URR estimate was determined previously to be around 10 tcm.5 Table 4 shows the coalbed-methane resource estimates that have been assumed for this article.

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Typical coalbed-methane average recovery estimates range 20-33%;18-20 we will assume a 25% recovery factor. Based on resource estimates found elsewhere21-23 and on a 25% recovery, we estimate a URR of 62 tcm for coalbed methane (Table 4).

CBM model

The production curve for coalbed methane is a parabola to the year xd and beyond that the curve follows an exponential decay. Regression analysis is used to fit the parabola portion of the curve, expressed by Equation 1 (see accompanying equation box), to the data.

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At the point (xd,yd), the model shifts into an exponential decay.

Equation 3 shows the coalbed methane production model M(x).

The point xd (in Equation 3) is assumed is the point where xd – xp/r2 – xp = 0.15, which ensures the overall shape of the curve resembles the general coal bed methane production.24

Note xp and r2 are defined as shown in Equations 5 and 6.

In this way we make yd a function of xd. Lastly, xd is solved so that the area under the curve matches the URR estimate.

Demand

Natural gas demand is modeled by analyzing demand per person and population forecasts. The population and natural gas consumption data are split into two groups, the developed world and the less-developed world.

The developed world consists of Europe, FSU, North America, Australia, New Zealand, and Japan, and the less-developed world consists of the rest. The natural gas consumption data were obtained from the BP Statistical Review,15 and the historic and predicted population data were acquired from the UN World Population Prospects.25

Consumption was divided by the population to obtain a natural gas demand per average developed and less-developed person, and the data were fitted to the function shown in Equation 7, as shown in Fig. 1.

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D(x) Equation 7 estimates demand per average person. Multiplying the demand per average person with the projected population from the UN yields the estimated worldwide demand for natural gas.

Models

Coalbed methane was approximated by the model described above, and the conventional North American model is from Mohr and Evans;5 all other regions and gases have been approximated with the model from the literature.26 In particular, both shale and tight natural gas production curves are expected to follow bell curves.

All models required only the historic production data and a URR estimate. Total natural gas production data were determined from BP, US Energy Information Administration, the Netherlands Environmental Assessment Agency, and DeGolyer and MacNaughton.15 27-29

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Unconventional gas production was approximated from a variety of sources.20 30-38 Conventional production was assumed to be total production less unconventional production. Fig. 2 shows the conventional gas model; Fig. 3 shows the conventional and unconventional gas production with demand. Table 5 shows the respective peak dates.

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It is interesting to observe that, although the coalbed methane resource is significant, its production is relatively minor in comparison to other unconventional sources. It is uncertain why tight-gas resources have generally been overlooked and ignored, given the significant contribution they make. It has been assumed that shale and tight-gas production follow bell curves, and whereas coalbed methane follows a different curve.

This assumption has been based on the historic production data from the US. The model indicates that worldwide natural gas production will peak around 2043. Conventional natural gas peaks about 5 years earlier. So that, while unconventional gas is an important source of energy, it can only slightly delay the inevitable decline. Natural gas supply begins to deviate from demand around 2030. It is noted that European production remains flat before steadily declining.

The current resource estimates for methane hydrates are about 1,000 tcm.39 With an assumption of a 10% recovery factor, the methane hydrates URR would be about 100 tcm, which is about 20% of the natural gas URR estimate used in this article.

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Methane hydrates resource estimates, however, are decreasing by an order of magnitude every decade.39 In a decade, therefore, the methane hydrates URR may be about 10 tcm and only 2% of the natural gas URR estimated in this article. A model of methane hydrates is meaningless until the resource estimates of methane hydrates stabilize.

Acknowledgments

The authors thank Jean Laherrere, Hilmar Rempel, Garth Sloan, Renato Guseo, Andrew Scott, Ivan Sandrea, Ted Callister, and the US EIA for their correspondence and the Centre for Sustainable Resource Processing for its financial support.

References

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The authors

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Steve Mohr ([email protected]) is a PhD candidate at the University of Newcastle, Australia, and currently modeling supply and demand of transport fuels to 2100 as part of his PhD requirements. Mohr has a combined chemical engineering and mathematics degree from the University of Newcastle, Australia.

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Geoffrey Evans ([email protected]) is professor of chemical engineering at the University of Newcastle, Australia, and has a research background in multiphase systems as well as in life-cycle analysis and sustainable resource processing.