While total U.S. natural gas reserves increased about 22.3 Tcf to 190.5 Tcf at year-end 2004 from levels in 1985, a large majority of that increase (more than 80%) came from reserves that were not available to the domestic gas market, i.e., they were nonproducing reserves, according to a report from the Energy Information Administration (EIA). A similar trend also occurred with domestic crude oil reserves.
Although the reasons for this are unclear, EIA analyst Philip M. Budzik, speculated that the longer time required to drill new wells, install production facilities and construct pipeline infrastructure could be to blame.
“Some of this lengthening of time could be due to the recent scarcity of drilling rigs and skilled personnel to operate them,” Budzik said in the report. “Onshore, the growth in nonproducing crude oil and natural gas reserves could reflect the development constraints caused by environmental regulations and litigation.” In the offshore areas, the change could be related to the trend toward deepwater drilling and deeper drilling, both of which take more time to reach production.
Another potential cause could be the greater reliance on seismic data interpretation to “delineate the dimensions of newly discovered fields as a substitute for drilling field delineation wells,” he said.
From 1985 through 2004, total U.S. natural gas reserves rose 13% or 22.3 Tcf. However, U.S. nonproducing gas reserves increased by 18.3 Tcf to 51.4 Tcf at year-end 2004. At the end of 2004, nonproducing reserves represented 27% of total natural gas reserves, which was an increase of seven percentage points from 1985.
The growth of nonproducing reserves has been primarily an onshore phenomenon, EIA determined. Total Lower 48 offshore natural gas reserves declined 17.8 Tcf to 20.6 Tcf over the period. However, offshore nonproducing natural gas reserves declined only 6.2 Tcf to 9.7 Tcf while offshore producing gas reserves fell by 11.6 Tcf, to 10.8 Tcf at year-end 2004. As a result, the proportion of offshore Lower 48 nonproducing natural gas reserves to total offshore natural gas reserves rose from 41% at year-end 1985 to 47% at year-end 2004.
In contrast to the reserves decline offshore, onshore gas reserves in the Lower 48 grew by 46.9 Tcf to 161.5 Tcf. Lower 48 onshore nonproducing reserves grew by 24.9 Tcf to 41 Tcf and onshore producing gas reserves grew by 22.0 Tcf to 120.5 Tcf at year-end 2004. Nonproducing natural gas reserve growth accounted for 53% of the incremental growth in total Lower 48 onshore reserves. Nonproducing natural gas reserves grew from being 14% of total Lower 48 onshore reserves at year-end 1985 to 25% at year-end 2004.
EIA said the growth of onshore nonproducing natural gas reserves relative to total reserves is a phenomenon that was replicated across all the onshore subregions during the period. The onshore regions that posted reserves increases, such as the Northeast, Southwest, onshore Gulf Coast, and Rocky Mountains, had their volumes of nonproducing natural gas reserves increase even faster than their producing reserves. And while the Midcontinent showed a decline in total gas reserves, its nonproducing reserves increased in proportion to its producing reserves.
The volume of producing natural gas reserves either declined or remained relatively constant in most onshore regions, EIA said. Onshore regions posting a decline in producing natural gas reserves included Alaska (minus 45%), the Midcontinent (minus 24%) and the Pacific (onshore and offshore minus 48%). Onshore regions whose producing natural gas reserves remained relatively constant included the Southwest at 15.7 Tcf and the onshore Gulf Coast at 27.1 Tcf at year-end 2004.
Only the Northeast and Rocky Mountain regions posted increases in producing natural gas reserves. Northeast producing natural gas reserves increased by 5.1 Tcf to 9.6 Tcf and Rocky Mountain producing gas reserves increased 24.9 Tcf to 44.5 Tcf at year-end 2004.
There also were significant differences in the growth of conventional and unconventional natural gas reserves over the study period, EIA said. However, the growth trend of nonproducing reserves compared to producing reserves remained apparent. Total conventional natural gas reserves declined by 16.1 Tcf to 128.3 Tcf, while total unconventional natural gas reserves increased by 38.5 Tcf to 62.3 Tcf at year-end 2004.
In line with the overall trend, nonproducing conventional natural gas reserves increased from 19% of total conventional natural gas reserves at year-end 1985 to 28% at year-end 2004 and nonproducing unconventional natural gas reserves rose from 21% of the total unconventional reserves at year-end 1985 to 25% at year-end 2004. At year-end 1985, nonproducing unconventional natural gas reserves constituted 15% of total nonproducing natural gas reserves. By year-end 2004, 30% of the total nonproducing natural gas reserves were unconventional, EIA said.
The overall trends exhibited for producing and nonproducing crude oil reserves were somewhat different than those exhibited for natural gas. Unlike gas whose total reserves increased, total crude oil reserves declined by 6 billion barrels to 21.3 billion barrels. However, total nonproducing crude oil reserves grew from 2.6 billion barrels at year-end 1985 to 5.6 billion barrels at year-end 2004. At year-end 1985, U.S. nonproducing crude oil reserves were 10% of total crude oil reserves; by year-end 2004, they were 26% of total crude oil reserves.
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