EIA Extols Unconventional Gas Role in Market
Unconventional gas resources --- coalbed methane, tight gas
sands and gas shale --- could contribute as much as one quarter or
more to the 30 Tcf demand market that the natural gas industry
expects to materialize over the next two decades, according to a
new paper released last week by the Energy Information
The Department of Energy (DOE) agency projects that annual
unconventional gas supplies will account for about 28% of total
U.S. gas production by 2020, reaching 7.5 Tcf/year. This compares
to a production level for unconventional resources of 4.5 Tcf in
The projections hinge on the assumption that progress will
continue in the development and refinement of recovery technologies
for unconventional resources, whose production in the past has been
hampered by high finding and drilling costs.
Brisk technology advancements could result in 25 Tcf more of
unconventional supplies being added to the U.S. supply base between
1998 and 2020 compared to the amount that would be produced if
technology progress was sluggish, as well as a drop (by 78 cents)
in the wellhead price for gas, according to the EIA paper, entitled
"Impact of Unconventional Gas Technology in the Annual Energy
Continued progress in drilling and completion technologies will
by far have the "greatest projected impact" in the years ahead,
with the EIA projecting that such technologies alone will boost the
aggregate unconventional gas production by 11.4 Tcf between 1998
and 2020 and reduce average wellhead prices by 33 cents.
Most of the benefits of technological advancements will be seen
in the Rocky Mountain region for tight sands and coalbed methane,
and in the Northeast for gas shale, the EIA paper predicted.
Production from tight sands in the Rocky Mountains could reach a
total of 43.1 Tcf by 2020 if the technology environment is
favorable, compared to a total of 31.7 Tcf under a scenario in
which little or no advancements are achieved, the DOE agency noted.
The second largest tight sands producing region will be the Gulf
Coast, which the EIA projects could achieve an aggregate production
output of 21.6 Tcf by 2020 if the technology climate is right.
The agency also expects the Rocky Mountain region to dominate
coalbed-methane production, reaching a cumulative 25.1 Tcf over the
next two decades if advancements in recovery technologies continue.
This compares to a total of about 19.4 Tcf under a no-progress
scenario. The Northeast Appalachia region will be the hands-down
leader in production of gas from shale, with aggregate production
targeted at about 11 Tcf between 1998 and 2020 if recovery
technology continues to flourish.
Proved reserves of unconventional gas in the United States ---
reserves that are recoverable with reasonable certainty --- tend to
be on the low side, but the resource potential of certain regions,
especially the Rocky Mountains, is believed to be vast.
Proved reserves of tight sands and coalbed methane are highest
in the Rocky Mountain region, while proved reserves of gas shale
dominate the Northeast, according to the EIA. Approximately 51%
(16.2 Tcf) of tight sands and 77% (8.1 Tcf) of coalbed methane
proved reserves are situated in the Rocky Mountains, and 93% (3.4
Tcf) of gas shale proved reserves are located in the Northeast, it
Undeveloped resources - which are unproved resource volumes that
could yet be added to proved reserves - of unconventional gas are
most bountiful in the Rocky Mountain region. In the Rockies, the
agency estimated the potential for undeveloped tight sand gas at
191 Tcf, and coalbed methane at 42 Tcf. In the Northeast region,
undeveloped gas shale resources were pegged at 45 Tcf.
An even greater amount of unconventional gas resources, about
120 Tcf, has been categorized by the U.S. Geological Survey (USGS)
as hypothetical resources. "Because insufficient information exists
concerning these plays, producers have less ability to explore for
or develop them within an expedient time frame," the EIA said, but
it expects the development to pick up as the USGS conducts basin
assessments to help producers locate productive plays.
The agency also said it expects to see accelerated development
of emerging unconventional gas plays in basins such as Power River
in Wyoming, Piceance, Raton and Wind River.