Potential Gas Resources Dip Slightly Since 1996
The domestic natural gas resource base, both proven and
potential, has dropped slightly over the past two years, but
there's more than enough available and known gas supply to meet
U.S. needs well into the next century, according to a new study
released Monday by the Potential Gas Committee (PGC).
"Oh, very much so," said John B. Curtis of the Potential Gas
Committee, when asked if gas resources were sufficient to meet
current and forecasted demand levels, including a 30 Tcf gas market
between 2010 and 2015. In fact, he noted that the 60-year resource
base estimated 20 years ago remains largely unchanged because
producers are finding gas at deeper depths in the Gulf of Mexico
and are "getting better" at recovery. Producers are drilling at
depths that were "unheard of" a decade ago, while improvements in
completion technology are allowing them "to get more out of the
rock, more out of the coal."
Overall, the biennial study estimated the potential gas base
from traditional and coalbed-methane resources, when combined with
the Department of Energy's assessment for proved reserves (167
Tcf), was down 2.3% in 1998 from 1996. Potential resources from
traditional reservoirs were computed at 896 Tcf in 1998, while
resources from coalbed methane averaged 141 Tcf. At current
production rates, the PGC said the gas supply base would be enough
to meet domestic needs for about 63 years. Potential gas resources
include those that have been discovered and haven't been discovered
yet, and those in existing fields.
The drop in potential gas resources was evident in nearly every
major U.S. production region - with the exception being the Gulf
Coast, which experienced a modest rise, according to the PGC study.
Potential gas resources from the Atlantic region and Alaska
remained the same over the two-year period.
The overall reduction was largely owing to a revision in
potential resources from the shallow Devonian Antrim Shale gas play
in north-central Michigan. The PGC projected a "large potential
resource" for that region in 1996, but the results of drilling
activity has shown that the assessment was "too optimistic," Curtis
noted. Consequently, the committee downsized the mean value (a
combination of minimum, most likely and maximum estimates) of the
gas resource base for the entire U.S. North Central region by
almost 26%, to 22 Tcf in 1998 from nearly 30 Tcf two years ago.
The next biggest decline in potential gas resources came in the
Rocky Mountain region - down almost 7% over the two-year period.
The PGC estimated the mean value of the resource base there has
dropped to 150 Tcf from 161 in 1996 largely due to depressed oil
and gas prices. Also, it cited a delay in drilling while the
federal government completes its environmental impact studies of
the Green River, Powder River and Uinta basin coalbed-methane
areas. One positive factor has been the strengthening of the
region's spot gas prices relative to the New York Mercantile
Exchange (NYMEX), the study noted. "Although not yet at parity with
the NYMEX, price differentials at least have narrowed since" 1996.
The potential resource base of the Mid-Continent region - which
includes the Anadarko, Arkoma and Permian basins - was down about
5% over 1998, according to PGC. Specifically, it estimated the mean
value of the region's potential resource base dropped to 122 Tcf
last year from 128 Tcf. The committee predicts that most future gas
production and resources in the Mid-Continent will come from small-
to intermediate-size plays or in deep areas that haven't been fully
The mean value of potential resources for the Pacific region
registered the smallest decline, down 1.2% to 37 Tcf, while the
resource base for the Atlantic region and Alaska remained unchanged
- 104 Tcf and 194 Tcf, respectively.
The Gulf Coast was the only area that reported an increase,
albeit slightly, in its potential resource base - by 0.2% to 266
Tcf since 1996. The change "reflect[s] the transfer of potential
resources to proved reserves as a result of continued drilling and
discoveries," the PGC study said. The region "remains the dominant
producing area of natural gas in the United States...Most of the
area is in a mature exploration stage, but important new fields
continue to be discovered," such as the Gulf of Mexico continental
slope and the eastern Gulf shelf, it noted.
"Between 1990 and 1998, the greatest percentage gains in
resources occurred in the Gulf Coast and East Texas basins as a
result of continued success and development of the Austin Chalk and
Cotton Valley pinnacle reef trends," PGC said