A recent assessment of U.S. natural gas resources found that the amount of technically recoverable gas rose about 20 percent since the last review two years ago, and has reached an all-time high.
The Potential Gas Committee releases the biennial assessments. The most recent evaluation determined that the U.S. has 3,374 trillion cubic feet of gas, the highest amount in the committee’s 54-year history. “The increase resulted from reassessments of shale gas resources in the Atlantic and Mid-Continent areas and conventional and tight gas in the Mid-Continent and Rocky Mountain areas,” a press release states.
“This seventh record-high resource evaluation by the PGC confirms that the U.S. has an abundance of natural gas,” said Dr. Alexei V. Milkov, director of the Potential Gas Agency at the Colorado School of Mines. The PGA, a group of volunteer geological experts, provides technical assistance for the non-profit PGC.
The most recent assessment includes 3,218 Tcf of gas recoverable from “traditional” reservoirs, including 2,107 Tcf in shale gas resources.
While the PGC report calls this gas “technically” recoverable, it breaks it down further into probable, or current, fields; possible, or new fields; and speculative resources. Almost 2,500 Tcf is in the probable and possible fields.
The assessment also breaks down the resources into seven geological areas. The Atlantic region, which includes the Appalachian Basin with its Marcellus and Utica shales, has the most resources, with 41 percent. That is followed by the Mid-Continent, which includes The Permian Basin of Texas.
“More well drilling and continuous improvements in completion and stimulation technologies lead to better delineation and characterization of U.S. gas resources, especially in shale and tight reservoirs,” Milkov said.
The October short-term energy outlook from the U.S. Energy Information Agency indicates that natural gas production will continue at a record pace in 2019 but slow in 2020 due to low prices.
EIA expects monthly average natural gas production to grow 10 percent in 2019 over the previous year, but see a slowdown in 2020 as the lagged effect of low prices in the second half of 2019 reduces natural gas-directed drilling. However, EIA forecasts that natural gas production in 2020 will average 93.5 billion cubic feet a day, a slight increase over 2019.
But a report from the non-profit Post Carbon Institute found that the EIA estimate is “extremely optimistic.” The analysis found that in the current low-price climate, drilling has focused on “sweet spots,” which have the most economically viable wells. As those reserves are depleted, the industry will have to turn to technically recoverable reserves, which will require higher prices in order to make drilling feasible. The study also found that in some cases, the EIA data of these “unproven” reserves” could be overstated.
While the country holds vast reserves of natural gas, the abundant supply has translated into lower prices and reduced revenues for gas suppliers. That will mean that operators must be able to economically justify drilling new we