Four factors will continue to tighten the future domestic gassupply picture, Randy Mundt, executive vice president of marketingfor producer Burlington Resources, said Tuesday at Ziff EnergyGroups’ New Gas Dynamics 2000+ conference in Houston. The twobiggest factors are producers’ difficulty in replacing productionand accelerated decline rates in the Gulf of Mexico. Also, Mundtsaid, Canadian imports are not an immediate threat to domesticproducers, and the current supply-demand scenario is roughly inbalance.

Mundt pointed out, “Large discoveries are fewer. Production hasgrown only nominally despite record rig activity, and the industryis not replacing its reserves.” He also questioned the Canadiansupply picture. “Proposed pipelines to bring gas to the U.S. fromCanada may be harder to fill than expected.”

The producer noted major domestic gas field discoveries peakedin the period from the 1920s to the 1960s and now are in decline.Of the 104 largest domestic gas fields discovered, 94 were found inthis time period. Mundt also noted the reserve-to-production ratioin the lower 48 states has been in decline almost consistentlysince 1986 and pointed out gas drilling rig activity has been onthe rise since 1996 while production has not increasedproportionately. Reasons for this, he suggested, are wells beingdrilled currently are deeper than those drilled in the past, hencethey require more time to complete. Also, more drilling for gas isbeing done offshore where wells are more costly and take longer todrill.

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