A report released last week by the newly named Gas TechnologyInstitute (created by the merger of GRI and the Institute of GasTechnology) predicts that technological advances will increase theeconomic lower-48 resource base by 250 Tcf and Canadian recoverableresources by 125 Tcf.

The report, titled Natural Gas Supply Sector Summary, examinesthe ongoing expansion of North American gas supply and the steadytechnological advances that will be required to continue thoseincreases over the next 15 years.

It predicts that the upward trend in drilling success rates willcontinue. By 2015, development and exploratory success rates areexpected to approach 85 and 30%, respectively. Producers will reapthese benefits as contributions to their bottom lines. It alsopredicts that onshore and offshore drilling costs per foot willdecline in all depth ranges. Advanced bits, drilling fluids, betterrig designs, and greatly improved operating efficiency willcontribute to this reduction.

The report also provides some forecasts on production. Forexample, Central and Western Gulf of Mexico gas production isprojected to increase to levels in excess of 8 Tcf by 2015.Canadian gas production is projected to grow from 5.8 Tcf (1998) to7.7 Tcf by 2015. Activity in western Canada is expected to increasesubstantially, with production increasing by 1.4 Tcf by 2015.Emerging production from offshore eastern Canada is projected toreach 0.6 Tcf.

Deep onshore production (depths greater than 15,000 feet) isprojected to increase to 3.5 Tcf per year by 2015, representing 19%of onshore production. In particular, deep gas production in theTexas and Louisiana Gulf Coast region is expected to account forabout 60% of the projected lower-48 onshore deep productionincrease. Deep gas activity and production is also expected toincrease in the Permian Basin and Midcontinent.

“Technology has helped producers survive the 1998 slump andposition themselves to produce into today’s attractive $4 gas and$30 crude oil price environments,” noted John Cochener, GTI projectmanager and principal analyst-resource evaluation.

“Technology has been a facilitator to allow producers to developnew gas supply niches. For example, before the mid-1980s, coal-bedmethane production was essentially zero. Today, it contributes 1.2Tcf annually to gas production and represents 6.5% of supply,” henoted. “The deep-water Gulf of Mexico and Ft. Liard region ofCanada are two fresh examples of emerging gas supply.”

The report (GRI-00/0012) can be ordered directly from the GTIDocument Fulfillment Center by fax at (630) 406-5995. It costs $30for GTI members and $40 for nonmembers, plus shipping and handling.

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