As North America gears up for winter with natural gas prices already registering higher than normal for this time of year, the U.S. Minerals Management Service (MMS) said Monday that it believes that offshore natural gas may be a near-term solution for the current volatility. The government agency added that Americans — stung by high natural gas prices — may be in for a bumpy ride this winter.

In looking offshore, the MMS said the area known as the outer continental shelf (OCS) — a 1.76 billion acre area that begins three to 12 miles off the U.S. Coast — may hold as much as half of the nation’s supply of undiscovered natural gas that is considered technologically recoverable.

Speaking at an energy leadership forum in Houston Monday, MMS Director R.M. “Johnnie” Burton said, “This important frontier can be accessed from existing infrastructure, and that means it can be brought to market more quickly.” MMS data shows that natural gas exists below current shallow-water drilling platforms in the Gulf of Mexico, some at depths of more than three miles.

“Because natural gas is a clean burning fuel source, demand for it has sharply increased over the last decade — about 90% of the new energy plants that come online in the next decade will be powered by natural gas; and about half of all American homes are heated with natural gas — around 56 million homes,” Burton said. “This is a simple supply and demand issue, creating volatile price fluctuations.”

According to the MMS, the increase in gas demand surged at a time when domestic natural gas production in the shallow waters of the Gulf of Mexico began dramatically declining. During the 90s, natural gas production in the area declined by 23%. While increased deepwater natural gas development compensated for the loss, new MMS data indicates that deepwater production is projected to level off over the next few years, creating a greater need for new natural gas sources.

“With our available domestic resource base in decline and our major source [Canada] of imports facing its own production limits, we are forced to find alternative reserves to meet increasing demand by American consumers,” said Burton.

The Department of Energy projects that the gap between supply and demand could increase by another 50% in the next 20 years.

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