Natural gas supply estimates growing

Not too many years ago, many North American energy planners saw the supply of natural gas as rapidly dwindling. As recently as a few years ago, some felt natural gas was a useful “bridge” to renewable energy resources in the future, but believed our known reserves were quite limited so we’d best plan on other energy sources for beyond 2050.

04/01/2010


 

 

Not too many years ago, many North American energy planners saw the supply of natural gas as rapidly dwindling. As recently as a few years ago, some felt natural gas was a useful “bridge” to renewable energy resources in the future, but believed our known reserves were quite limited so we’d best plan on other energy sources for beyond 2050. That estimate has proven unduly pessimistic. Recent years have seen major additions made both to proven reserves and to broader estimates of the total gas resource.

 

Increasing Estimates

A recent Energy Analysis by the American Gas Association (AGA) explains that estimates of supplies of natural gas in the U.S. have dramatically increased in the last five years. The report notes that since 1990, 17 to 20 trillion cubic feet (tcf) of natural gas have been produced from U.S. known reserves each year. Yet proven reserves in the last 20 years have actually grown by 45%. The report cites information from organizations such as the well-known Potential Natural Gas Committee at the Colorado School of Mines.

 

New Technologies

What are the causes of this dramatic increase? One important contribution is the development of horizontal drilling and advanced fracturing technologies, which are tapping into the currently estimated 600 tcf of natural gas found in multiple shale formations in the U.S. and Western Canada. These were for the most part unrecoverable in the 1990s but are now coming into production.

 

Secondly, the report notes that new discoveries, extensions and revisions of prior reserves data have outgained the pace of production. The report further quotes the Potential Natural Gas Committee and similar groups’ estimates that yet undiscovered natural gas resources in the U.S. alone, added to known reserves, point to a total resource of over 2,000 tcf.

 

Role of Underground Storage

The report adds that growth in the underground storage capacity has increased in recent years. Current storage capacity may account for 30% of all gas supplied during the peak winter months. The report notes, “This flexibility is crucial to meeting heating load peak demands for local gas utility customers, and all customers for that matter.”

 

The report also indicates that long-range planning has started for development of Alaskan gas reserves and pipeline transmission to Canada and the U.S. Although these projects are not yet completed, the report notes, “Many analysts believe that a pipeline connecting North Slope gas reserves to the lower 48 states is closer than ever, and that by 2020 or soon after, as much as 4 billion cubic feet (bcf)/day may be flowing.”

 

U.S.%%MDASSML%%Canadian Partnership

Canada has long played a role in providing natural gas to the U.S. About half of current Canadian natural gas production of 13 bcf/day is exported to the U.S. This is a decline from a peak of about 16 bcf/day a few years ago. Canadian resources continue to play a role in providing natural gas supplies to U.S. customers.

 

LNG Still a Small Player

Additional evidence of our abundant supply is that imported liquid natural gas (LNG) currently plays a minor role in the U.S. supply picture, providing less than 2% of daily usage. The report notes that the current 14 bcf/day of LNG import capacity has never been fully utilized. There are vast resources of natural gas in many locations around the world and they can potentially supplement domestic and Canadian production. However, as domestic reserve estimates have increased in recent years, the enthusiasm for offshore resourcing of LNG has declined.

 

Resource Diversity Critical

Summarizing many of these issues, the report indicates that the strength of gas supply in the U.S. is based not only on the abundance of gas resources, but also on the diversity of those resources. The report emphasizes that the future of natural gas supplies will also depend on adequate infrastructure growth, such a pipelines and storage, and on “effective regulatory and policy measures that protect all interests in securing a stronger domestic energy future.”

 

 

 

More info.

American Gas Association

www.aga.org

DOE Information on Oil and Natural Gas Reserves

www.eia.doe.gov/emeu/international/reserves.html

Colorado School of Mines Potential Natural Gas Committee

www.mines.edu

 

 

 



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