Government and industry sources have grossly overstated future natural gas supplies in the United States, basing their estimates on unrealistic growth in supplies from shale gas plays, according to a report released Thursday by the San Francisco-based Post Carbon Institute, a nonprofit organization that promotes sustainability.

While the study by Canadian geoscientist J. David Hughes questions the latest natural gas outlook by the U.S. Energy Information Administration (EIA), the report, "Will Natural Gas Fuel America in the 21st Century?," says that even if EIA's projections are correct, there is not enough gas to replace all of the nation's coal-fired electric generation and to displace oil for transportation.

Hughes attacks the widely held notion that gas can be the "bridge fuel" from a carbon-dominated to an alternative energy-driven society during the next 20 years. And he is particularly skeptical about the assumptions of almost unlimited supplies coming from shale gas, which he says are characterized by "high-cost, rapidly depleting wells" that require large amounts of energy and water.

The Post Carbon Institute provided the funding for Hughes' study, and the Institute's Asher Miller and Daniel Lerch provided input and editorial assistance to Hughes.

A spokesperson for the institute alleged that the report confirms that the natural gas industry has "propagated dangerously false claims" regarding future supplies, cost and environmental impact, along with perpetuating the claim that the United States now has "a 100-year supply of cheap natural gas." The report "also debunked the perception that shale gas is better for the climate than coal," the spokesperson said.

Hughes said that replacing coal-fired generation would require a 64% increase in Lower-48 gas production from 2009 levels, while another 24% increase in gas production would be needed to provide gas in the heavy vehicles sector. "This would require a massive build out of new infrastructure, including pipelines, gas storage and refueling facilities," he said. "This is a logistical, geological, environmental and financial pipe dream."

There were three assumptions that Hughes was asked by the institute to address, with the 100-year supply being one. Hughes also looked at the assumptions that natural gas prices would remain low and stable for decades to come and that gas is much cleaner and safer than other fossil fuels from the standpoint of greenhouse gas emissions and public health.

While not disputing that gas will continue to be an important part of the U.S. energy mix, Hughes attacked "the notion that natural gas is a panacea that can substantially offset oil imports as a transportation fuel or replace coal-fired electric generation." He called these scenarios "wishful thinking at best."

EIA's projections are based entirely on growth of shale gas that Hughes sees as unrealistic, requiring a threefold growth in gas from shale with that source providing 45% of the U.S. natural gas production by 2035.

"When it comes to fossil fuels there is no such thing as a free lunch," Hughes said. "Coal and natural gas have heavy environmental impact throughout the supply and utilization chains."