Despite gas prices hovering near $11 currently and averaging $7.17/MMBtu so far this year (Henry Hub cash bidweek) mainly on fears of a supply shortage, the Potential Gas Committee's (PGC) latest report on the nation's gas resources shows a total available gas resource of 1,308.3 Tcf, or nearly 70 years of supply if produced near the current annual rate. The problem, according to the American Gas Association (AGA), is accessing that supply.
The total resource has declined only about -0.2% in two years since the PGC's last estimate at the end of 2002. In fact, some categories of the nation's gas resource actually have grown, particularly coalbed methane, which went from 168.9 Tcf in 2002 to 169.3 Tcf in the latest version of the report, titled "Potential Gas Supply in the United States."
The PGC, which consists of volunteer experts associated with a wide variety of natural gas industry companies, associations, government agencies, and academic institutions, estimates the nation's total gas resource base using 89 separate geologic province estimates of the gas volumes believed to be present in known gas reservoirs but not yet booked as proved reserves.
According to the latest report, the nation's probable gas resources, i.e., those most likely to be produced, only fell about 1.8% since the last report to 206.8 Tcf. Total potential resources dropped about 0.7%. However, total gas resources in the Rocky Mountain region jump 9.3% to 191.4 Tcf. Resources in the Gulf Coast, the area typically cited for showing among the greatest declines, fell only 1% in two years and still total 290 Tcf, the PGC said.
The PGC says there's plenty of natural gas right here in the Lower 48 states, including 346.2 Tcf of possible resources and another 396.6 Tcf of speculative resources on top of the 206.8 Tcf that are most likely to be produced. The PGC estimates that the total resource broken down by region is as follows: Atlantic (85.7 Tcf; Gulf Coast (290 Tcf; North Central (21.9 Tcf); Midcontinent (113.5 Tcf); Rocky Mountain (191.4 Tcf); Pacific (52.4 Tcf) and Alaska (193.8 Tcf).
Despite the abundance of natural gas in the U.S., the nation is rapidly trying to increase imports of liquefied natural gas (LNG). More than 50 new LNG import terminals have been proposed. The government also has guaranteed loans to those who would take on the risk of building a $20 billion pipeline to Alaska that would transport gas to the Lower 48 from the North Slope.
Domestic dry gas production is expected to fall 1.5% to 18.63 Tcf this year, according to the Energy Information Administration. It is widely assumed that producers are struggling with steep declines in mature fields and simply can't keep up the pace. Meanwhile, gas demand, particularly from gas-fired power generation, is rising rapidly. The U.S. is expected to consume about 22.28 Tcf of gas this year and 22.81 Tcf next year, EIA said.
The problem is that the industry's ability to access significant areas of the resource base "remains restricted," said Dave Parker, CEO of the American Gas Association (AGA), a PGC sponsor. "The recently passed Energy Policy Act offers hope for better understanding the resource potential of areas currently off-limits, such as the East Coast of the United States, because the bill calls for a genuine assessment of such areas," Parker said. "Armed with that information, it may be possible to make sound judgments about exploration initiatives in the future."
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.