The domestic natural gas resource base has grown nearly 17% over the past two years, with an estimated 1,525 Tcf of total gas resources reported at year-end 2006 -- the equivalent of 82 years of production at current rates, according to a biennial report on technically-recoverable long-range gas supplies released last Thursday.
This increase -- from 1,308.2 Tcf in 2004 to the current estimate of 1,525.3 Tcf -- is the largest volumetric and percentage hike in the biennial gas resource estimate since 1968, the Potential Gas Committee (PGC) said in its latest report, "Potential Supply of Natural Gas in the United States." The boost in the U.S. gas resource base occurred, even though 36 Tcf of gas has been drawn down since the last PGC report at year-end 2004.
Increased drilling has extended the limits of existing fields and discovered new fields in existing formations, said John Curtis, a Colorado School of Mines geology professor and director of an advisory group to the Potential Gas Committee. The increase also takes into account technological advances that increase recovery percentages.
The PGC is made up of 105 volunteer members from the natural gas industry, government agencies and academic institutions. The committee functions independently, but with the assistance of the Potential Gas Agency of the Colorado School of Mines.
Much of the resource growth over the past two years can be attributed to U.S. onshore areas where success in extracting natural gas from shales and coal seams has result in revised assessments of existing resource plays, said the American Gas Association (AGA), which participates in the PGC. This has been the case in numerous Midcontinent production areas, such as the Arkoma, Anadarko, Fort Worth and Permian basins, it noted. Additional growth in the resource base has resulted from new data from the Gulf Coast, Rocky Mountain and Pacific areas as well, the PGC said.
Of the 1,525.3 Tcf of future supply, the PGC estimates that 1,154.8 Tcf is traditional natural gas resources, 166.1 Tcf coalbed methane (CBM) resources and 204.4 Tcf is proved reserves. The latest CBM resource estimate dipped slightly from the 169.3 Tcf reported in 2004 largely because CBM production has increased.
The report showed that probable resources (those most likely to be produced) rose to 285.6 Tcf in the latest estimate, of which 270.1 Tcf is traditional gas sources and 15.5 Tcf is CBM resources. The bulk of the estimated gas resources included in the report -- 1,036.9 Tcf -- are either possible (new fields) or speculative (frontier).
The Gulf Coast region, typically cited for its declining resource base, ranked top in gas resource base -- rising to 333 Tcf from 290 Tcf in the report two years ago, the PGC said. It was closely followed by the Rocky Mountain region, with the region's gas resources climbing to 287.2 Tcf from 191.4 Tcf at the end of 2004. Other resource-rich areas included Alaska with 250.8 Tcf and the Midcontinent with 239.7 Tcf.
It noted that Alaska has the greatest CBM potential at 57 Tcf, with the Rocky Mountain region coming in second with 53.6 Tcf.
The Gulf Coast holds 31.2% of the total gas resource base of the Lower 48 states, the Rocky Mountains hold 26.9% and the Midcontinent has 22.5% of U.S. resources, while the Atlantic region has 10.2%, or 109 Tcf, the PGC said.
While the PGC reports a significant increase in the gas resource base in the Lower 48 states, the gas industry said this does little good unless producers are permitted to drill on more lands, particularly in the West. "Abundant natural gas resources help to keep energy costs affordable for U.S. customers, as long as producers are allowed access to those resources," said Chris McGill, managing director of policy analysis for AGA.
Moreover, tapping the potential natural gas resources in Alaska's North Slope depends on the construction of a long-line pipeline or alternative project, which in the best-case scenario would be a decade or more into the future.
In the meantime, developers are seeking to build terminal projects to import liquefied natural gas (LNG) to meet the United States' growing demand for natural gas in all sectors, particularly the power generation business. The majority of the LNG projects are being built in the Gulf Coast region, and are being allowed to proceed smoothly. However, attempts to build LNG terminals on the East and West coasts are being met with stiff opposition at the local, state and federal levels.
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