U.S. natural gas available for production has jumped 58% in the past four years, driven by improved drilling techniques and the discovery of huge shale fields in Texas, Louisiana, Arkansas and Pennsylvania, according to a report issued Thursday by the nonprofit Potential Gas Committee (PGC).

The PGC estimated that the United States has a total natural gas resource base of 1,836 Tcf and a total available future supply of 2,074 Tcf -- the highest resources evaluation in its 44-year history. The latest estimate is 35% higher, or 542 Tcf more, than PGC's previous report which was issued two years ago.

The report highlights "an exceptionally strong and optimistic gas supply picture for the nation," said John B. Curtis, the report's principal author. Curtis, a geology professor at the Colorado School of Mines (CSM), directs CSM's Potential Gas Agency, which provides guidance and technical assistance to the independently run PGC.

Year-end 2008 assessments estimated by the PGC totaled 1,836 Tcf ( statistically aggregated mean value), which included 1,673 Tcf of gas attributable to traditional reservoirs and 163 Tcf in coalbed methane (CBM) reservoirs. Compared with year-end 2006, traditional resources increased by nearly 519 Tcf (45%), while CBM gas resources decreased by 3 Tcf (minus 1.9%), resulting in a net increase in total potential resources of 515 Tcf (39%). PGC estimated available future gas supplies by combining the latest available determination by the Department of Energy for proved gas reserves, which was 238 Tcf at year-end 2007.

The new assessment is in addition to the 41 Tcf of marketed domestic gas production recorded between 2006 and 2008, the PGC noted.

Shale gas plays accounted for the majority of the increase to the estimate, PGC noted, especially the gains in the Appalachian basin and in the Midcontinent, Gulf Coast and Rocky Mountain areas. By itself shale gas accounted for 616 Tcf of the new reserves estimate, or about one-third of the new estimated total.

"The PGC's year-end 2008 assessment reaffirms the committee's conviction that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, in all types of reservoirs," said Curtis. The latest findings assume "neither a time schedule nor a specific market price for the discovery and production of future gas supply. Estimates of the Potential Gas Committee are 'base-line estimates' in that they attempt to provide a reasonable appraisal of what we consider to be the 'technically recoverable' gas resource potential of the United States."

Curtis credited "new and advanced exploration, well drilling and completion technologies" that have allowed producers "increasingly better access to domestic gas resources -- especially 'unconventional' gas -- which, not that long ago, were considered impractical or uneconomical to pursue."

Overall, the report said the Gulf Coast, including the Gulf of Mexico Outer Continental Shelf, slope and deepwater, remains the country's "richest resource area," followed by the Rockies and Midcontinent regions, which together account for 87% of the 2008 assessed traditional assessed traditional resource.

The largest volumetric and percentage increases came from reassessing active and newly developing shale gas plays in the Appalachian Basin, the Arkoma and Fort Worth, TX, basins of the Midcontinent, several basins of the Gulf Coast area, and the Uinta Basin in the Rocky Mountains.

The growing importance of shale gas to U.S. reserves cannot be overstated, said Curtis. "The number of plays, the level of production and the magnitude of perceived in-place resources have increased to the point that PGC, for the first time, is publishing a separate tabulation of its ongoing province- and area-level shale gas assessments," he noted.

American Gas Association (AGA) CEO Dave Parker said the PGC report "drives home the fact that domestic supplies of clean-burning natural gas are very abundant...As Congress debates climate change and energy legislation, it should heed the report's findings and understand that natural gas can and should be used in a multitude of applications now and in the future to reduce harmful greenhouse gases."

The PGC report shines "a credible spotlight on the staggering amount of natural gas that exists here in our own country," said Parker. "AGA is confident that this report will serve as further evidence to our legislators and policymakers that we can effectively address climate change concerns now and in the future by relying on the one fuel that is both clean burning and domestically abundant, natural gas."

Martin Edwards, vice president of legislative affairs to the Interstate Natural Gas Association of America, believes the report's results may help to influence congressional debate on two issues -- climate change and hydraulic fracturing (hydrofracing). "It challenges the notion that we're running out of natural gas. There's abundant supply and it should play a significant role in responding to climate change and reducing greenhouse gas emissions," he said.

"A lot of this new natural gas inventory is unconventional, and you've got folks in Congress that want to restrict the use of hydraulic fracturing," Edwards added. He believes producers can use the report to justify hydrofracing. "We've got all of these resources, but we can't develop it without hydraulic fracturing."

The U.S.-based Natural Gas Supply Association (NGSA) and the Canadian Association of Petroleum Producers (CAPP) issued a joint statement about the PGC report, with NGSA President R. Skip Horvath calling it "great news for North America."

Technological advances, said Horvath, continue to minimize the environmental and ecological footprint of natural gas, which are important factors for the long-term sustainability of the industry.

"The natural gas business employs an estimated four million Americans, both directly and indirectly; and the positive impact of natural gas development adds approximately $400 billion in annual economic value to the U.S. economy," Horvath said. "Additionally, about 83% of the natural gas used in the U.S. today is produced domestically, and another 15% is imported from our friends in Canada."

CAPP President David Collyer said the report also highlights the sustainability of Canadian gas in the North American market, particularly as new technologies begin to unlock the country's emerging shale gas resources.

Last summer the U.S. Geological Survey estimated the United States had 1,075 Tcf of undiscovered technically recoverable gas resources, or enough to meet consumption levels for at least 50 years (see Daily GPI, July 17, 2008). However, two weeks later the industry-backed American Clean Skies Foundation (ACSF) said the country had an estimated 2,247 Tcf of gas reserves (see Daily GPI, July 31, 2008).

The ACSF study was based on energy company estimates. The PGC's study was prepared by industry geologists who analyzed individual gas fields using seismic imagery and production data provided by producers.

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