The estimated US gas resource base increased to a record 3,374 tcf at the end of 2018, 20% more than 2 years earlier, which represents the largest 2-year increase in the assessment’s 54-year history, the Potential Gas Committee (PGC) at the Colorado School of Mines (CSM) and the American Gas Association jointly announced on Sept. 11.
“This report verifies that our nation has more natural gas than at any point in our history, ensuring that American families and businesses can rely on this clean, affordable source of energy,” AGA Pres. Karen A. Harbert said during a briefing at the trade association’s headquarters where the report was released.
“This seventh consecutive record-high resource evaluation by the PGC confirms that the US has an abundance of natural gas. These resources are present at various reservoirs both onshore and offshore,” said Alexei V. Milikov, a geology and geoengineering professor and director of the Potential Gas Agency at CSM, which provides guidance and technical assistance to the PGC.
The increase resulted from reassessments of shale gas resources in the Atlantic and Midcontinent areas and conventional and tight gas in the Midcontinent and Rocky Mountain regions.
The yearend 2018 assessment includes 3,218 tcf of gas potentially recoverable from traditional reservoirs (conventional tight sands, carbonates, and shales) and 157 tcf in coalbed gas resources. Compared with yearend 2016, traditional resources climbed 559 tcf, or 21%, while coalbed gas resources decreased by 2 tcf.
PGC assesses technically recoverable resources and does not consider a specific price of schedule for the discovery and production of gas. The US Department of Energy’s Energy Information Administration estimates proved gas reserves, which are additional to resources that PGC assesses.
PGC noted that when its assessments of technically recoverable resources are combined with EIA’s latest determination of proved reserves—464 tcf of gas at yearend 2017—the US future supply of gas stands at a record 3,838 tcf, 697 tcf, or 22%, more than the previous evaluation.
What led to growth
“More well drilling and continuous improvements in completion and stimulation technologies lead to better delineation and characterization of US gas resources, especially in shale and tight reservoirs,” Milikov said.
The Atlantic area ranked as the country’s richest gas resource region with 41% of total US traditional resources, followed by the Midcontinent with 19%, the Gulf Coast—including the Gulf of Mexico—with 16%, and the Rocky Mountains with 16%. Changes in the total assessment from yearend 2016 to yearend 2018 arose primarily from the evaluation of recent drilling, well tests, and production data from these four areas, the PGC said.
It said the largest volumetric gains (264 tcf, or 25%) were reported in the Atlantic area, mainly from increased new drilling and production results from the Marcellus and Utica shale plays in the Appalachian basin. Changes arose primarily from evaluation of recent drilling, well test, and production results from the Marcellus and Utica plays in the Appalachian basin.
Midcontinent assessments rose by 245 tcf, or 66%, reflecting intensive developments of conventional, tight, and shale reservoirs in the Permian basin, PGC said. It accounted in its resource evaluation for additional zones and potential well locations associated with stacked pays recently developed there.
Gas resources in the Rocky Mountains increased by 65 tcf, or 15%, from levels at yearend 2016, PGC said. The growth reflected large revisions in the Williston and Denver basins. Specifically, PGC said it accounted more rigorously for gas associated with the production of liquids in those basins.
Gulf Coast decreases
The Gulf Coast area had a modest decrease (22 tcf, or 4%), mainly from downsizing of the type of well used in the Eagle Ford play and lack of resource additions to replace production from the Eagle Ford and Haynesville shale plays, PGC said.
It said the importance of shale gas in the US was apparent since PGC’s mean total assessed shale gas resource of 2,107 tcf at yearend 2018 accounts for about 62% of the country’s total potential resources. Shale gas resources rose by 310 tcf, or 17%, from yearend 2016 to yearend 2018, it noted.
“This is really a story about innovation—using technology to tap a previously inaccessible resources,” said Richard Meyer, AGA’s managing director of energy analysis. “We’re seeing both record production and consumption. We’re also seeing low and stable gas prices. [Last year] was a record year for consumption. In 2019, it’s up 5% year-to-date. On average, we add one new gas customer per minute in this country.”
Meyer observed that 55% of the 2019 year-to-date US demand growth has been associated with exports of gas to Mexico and LNG to other countries. “LNG exports will be increasingly important,” Meyer said. “We don’t see them affecting domestic prices. In fact, they could stabilize domestic prices as they grow.”
Harbert said, “Natural gas has transformed the American economy and energy future for the better. Any realistic plan toward a cleaner energy future will have gas as a foundation.”
Contact Nick Snow at [email protected].