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Shales Highlighted in PGC's Record Reserves Report

Shale gas plays and significant technological advances that allow their development helped drive the latest assessment of U.S. natural gas reserves by the Potential Gas Committee (PGC) to a new high.

The United States had 1,898 Tcf of gas in the ground at the end of last year, according to PGC's latest biennial assessment, which was released Wednesday. The estimate surpasses the previous record-high assessment by 61 Tcf, thanks mainly to shale gas plays in the Gulf Coast region, the Midcontinent and Rocky Mountains, PGC said.

The assessment of gas reserves is the highest in the PGC's 46-year history.

"Our knowledge of the geological endowment of technically recoverable gas continues to improve with each assessment," said PGC Director John Curtis, a professor of geology and geological engineering at the Colorado School of Mines. "Furthermore, new and advanced exploration, well drilling, completion and stimulation technologies are allowing us increasingly better access to domestic gas resources -- especially 'unconventional' gas -- which, not all that long ago, were considered impractical or uneconomical to pursue."

When the PGC's results are combined with the U.S. Department of Energy's latest available determination of proved dry gas reserves -- 273 Tcf as of year-end 2009 -- the United States has a total available future supply of 2,170 Tcf, an increase of 89 Tcf over the previous evaluation, PGC said.

The assessment "demonstrates an exceptionally strong and optimistic gas supply picture for the nation," Curtis said.

"This report confirms once again our great optimism regarding natural gas supply in America," said American Gas Association CEO Dave McCurdy. "Abundant, diverse supply has helped to stabilize natural gas prices and to ensure reliability for natural gas customers even if sudden shifts in demand occur -- weather-induced or otherwise. This is welcome news for consumers across the nation."

The growing importance of shale gas is substantiated by the fact that of the 1,898 Tcf of total potential resources, shale gas accounts for 687 Tcf ("most likely" value), or about 36%, PGC said.

On Tuesday the Energy Information Administration's latest "Annual Energy Outlook" projected that gas production will grow from 21.0 Tcf in 2009 to 26.3 Tcf in 2035, driven in large part by shale gas production, which will grow to 12.2 Tcf in 2035, when it will be 47% of total U.S. production, up from 16% in 2009, EIA said (see Shale Daily, April 27).

Overall, according to the PGC, the Gulf Coast, including the Gulf of Mexico Outer Continental Shelf, slope and deepwater, remains the country's richest resource area (29% of total traditional resources), followed by the Atlantic, Rocky Mountain and Midcontinent areas, which altogether account for 85% of the assessed total traditional resource, PGC said.

The assessment of 1,898 Tcf includes 1,739 Tcf of gas attributable to traditional reservoirs (conventional, tight sands and carbonates and shales) and 159 Tcf in coalbed reservoirs. Compared to year-end 2008, traditional resources increased by nearly 67 Tcf (4%), while coalbed gas resources declined by 4 Tcf (2.7%), resulting in a net increase in total potential resources of 61.4 Tcf (3.3%).

Changes in the assessments from 2008 to 2010 arose mainly from analyses of new geological, drilling, well-test and production data from these same four regions. The largest volumetric and/or percentage increases in individual resource categories (probable, possible and speculative) resulted mainly from reassessments of active and newly developing shale gas plays in the Gulf Coast Area (Louisiana, Mississippi, Alabama salt basins and East Texas and Texas Gulf Coast basins), as well as the Anadarko Basin (Midcontinent Area), Piceance Basin (Rocky Mountain Area), Appalachian Basin (Atlantic Area) and Michigan Basin (North Central Area).

"The PGC's year-end 2010 assessment reaffirms the committee's conviction that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, and in all types of reservoirs -- from conventional, tight and shales, to coals," Curtis said. However, he noted that the assessment assumes neither a time schedule nor a specific market price for the discovery and production of future gas supply.

"Assessments of the Potential Gas Committee are baseline estimates in that they attempt to provide a reasonable appraisal of what we consider to be the technically recoverable gas resource potential of the United States," he said.

The report is available for purchase; for more information visit www.potentialgas.org.

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