The domestic natural gas resource base, both proven andpotential, has dropped slightly over the past two years, butthere’s more than enough available and known gas supply to meetU.S. needs well into the next century, according to a new studyreleased Monday by the Potential Gas Committee (PGC).

“Oh, very much so,” said John B. Curtis of the Potential GasCommittee, when asked if gas resources were sufficient to meetcurrent and forecasted demand levels, including a 30 Tcf gas marketbetween 2010 and 2015. In fact, he noted that the 60-year resourcebase estimated 20 years ago remains largely unchanged becauseproducers are finding gas at deeper depths in the Gulf of Mexicoand are “getting better” at recovery. Producers are drilling atdepths that were “unheard of” a decade ago, while improvements incompletion technology are allowing them “to get more out of therock, more out of the coal.”

Overall, the biennial study estimated the potential gas basefrom traditional and coalbed-methane resources, when combined withthe Department of Energy’s assessment for proved reserves (167Tcf), was down 2.3% in 1998 from 1996. Potential resources fromtraditional reservoirs were computed at 896 Tcf in 1998, whileresources from coalbed methane averaged 141 Tcf. At currentproduction rates, the PGC said the gas supply base would be enoughto meet domestic needs for about 63 years. Potential gas resourcesinclude those that have been discovered and haven’t been discoveredyet, and those in existing fields.

The drop in potential gas resources was evident in nearly everymajor U.S. production region – with the exception being the GulfCoast, which experienced a modest rise, according to the PGC study.Potential gas resources from the Atlantic region and Alaskaremained the same over the two-year period.

The overall reduction was largely owing to a revision inpotential resources from the shallow Devonian Antrim Shale gas playin north-central Michigan. The PGC projected a “large potentialresource” for that region in 1996, but the results of drillingactivity has shown that the assessment was “too optimistic,” Curtisnoted. Consequently, the committee downsized the mean value (acombination of minimum, most likely and maximum estimates) of thegas resource base for the entire U.S. North Central region byalmost 26%, to 22 Tcf in 1998 from nearly 30 Tcf two years ago.

The next biggest decline in potential gas resources came in theRocky Mountain region – down almost 7% over the two-year period.The PGC estimated the mean value of the resource base there hasdropped to 150 Tcf from 161 in 1996 largely due to depressed oiland gas prices. Also, it cited a delay in drilling while thefederal government completes its environmental impact studies ofthe Green River, Powder River and Uinta basin coalbed-methaneareas. One positive factor has been the strengthening of theregion’s spot gas prices relative to the New York MercantileExchange (NYMEX), the study noted. “Although not yet at parity withthe NYMEX, price differentials at least have narrowed since” 1996.

The potential resource base of the Mid-Continent region – whichincludes the Anadarko, Arkoma and Permian basins – was down about5% over 1998, according to PGC. Specifically, it estimated the meanvalue of the region’s potential resource base dropped to 122 Tcflast year from 128 Tcf. The committee predicts that most future gasproduction and resources in the Mid-Continent will come from small-to intermediate-size plays or in deep areas that haven’t been fullyexplored yet.

The mean value of potential resources for the Pacific regionregistered the smallest decline, down 1.2% to 37 Tcf, while theresource 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 266Tcf since 1996. The change “reflect[s] the transfer of potentialresources to proved reserves as a result of continued drilling anddiscoveries,” the PGC study said. The region “remains the dominantproducing area of natural gas in the United States…Most of thearea is in a mature exploration stage, but important new fieldscontinue to be discovered,” such as the Gulf of Mexico continentalslope and the eastern Gulf shelf, it noted.

“Between 1990 and 1998, the greatest percentage gains inresources occurred in the Gulf Coast and East Texas basins as aresult of continued success and development of the Austin Chalk andCotton Valley pinnacle reef trends,” PGC said

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