An abundance of natural gas and the diversity of the supply should quell any doubts about the ability of gas to supply the country with energy well into the next century, according to a report issued last Wednesday by the American Gas Association (AGA).

“The facts point to a versatile and competitive energy source poised to meet existing and incremental future demands for residential, commercial, industrial, power generation and transportation applications,” according to the report, “U.S. Natural Gas Supply: Then There Was Abundance.” Gas supplies will remain secure and reliable thanks to a wide array of domestic supply sources including shale, onshore unconventional, deepwater, subsalt, arctic gas, tight sands, liquefied natural gas (LNG) and “a practically endless list of other options,” according to the report.

New shale gas production or current unused LNG capacity could meet the 8 Bcf/d increase in consumption that some analysts say could result from passage of climate change legislation, AGA said. Connecting an arctic natural gas pipeline to the North American grid could meet half of that need, while incremental commercial, industrial or farm requirements for gas or electricity on a local basis could be met with bio-methane.

“The fact is that there are numerous sources of natural gas supply still available to the market or potentially available to meet new incremental demand — they are not pie in the sky,” AGA said.

The nonprofit Potential Gas Committee (PGC) last year reported that U.S. natural gas available for production had jumped 58% in four years, driven by improved drilling techniques and the discovery of huge shale fields in Texas, Louisiana, Arkansas and Pennsylvania (see NGI, June 22, 2009). The PGC estimated that the United States has a total natural gas resource base of 1,836 Tcf and a total available future supply of 2,074 Tcf — the highest resources evaluation in its 44-year history. Shale gas plays accounted for the majority of the increase to the estimate, PGC noted, especially the gains in the Appalachian basin and in the Midcontinent, Gulf Coast and Rocky Mountain areas. By itself shale gas accounted for 616 Tcf of the new reserves estimate, or about one-third of the new estimated total.

But those estimates may still be too low, according to the AGA report, which states that “some analysts that point to 8 Bcf/d of shale-gas production in the United States today believe that the volume could be increased to 13-15 Bcf/d (or higher) in only a matter of years, not decades, and thus become a prominent factor in meeting future gas requirements or even meeting growing natural gas demand.”

Total natural gas supply in the United States is approximately 63-65 Bcf/d, with about 55-57 Bcf/d (86%) coming from dry gas production, AGA said. Pipeline imports from Canada supply another 5-9 Bcf/d (12%). LNG averaged 1-2 Bcf/d during 2009.

And the AGA said there could still be good news to come from north of the border, despite a 3 Bcf/d decline in Canadian production in less than five years. According to the AGA, the addition of LNG import capacity and the potential for unconventional resource development in Canada ” may tip the pessimism around future Canadian gas supply to a more favorable view in the future.”

The AGA report is available at www.aga.org.

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.