How Much Natural Gas Is There?

atural gas is not a renewable resource, since there is a fixed amount of it trapped in the Earth. However, many people carry the misconception that there is a very limited amount of natural gas, and that we may use all of it up. This isnít true. The gas shortages of the 1970's were prompted by the governmentís lack of faith in the industryís ability to discover and develop new reserves, not by lack of gas supply. The unfortunate impression left by the shortages of gas in the 1970's is that there is little gas left to be discovered. On the contrary, the gas resource base is vast, and probably even larger than currently estimated. People are often confused by the difference in "proved reserves", those that could be economically produced with the current technology, and the total natural gas resource base.

Universally accepted definitions have not been developed for the many terms used by geologists, engineers, accountants and others to denote various components of overall oil and gas resources. In part, this is because most of these terms describe estimated and therefore uncertain, rather than measured, quantities. The lack of standardized terminology sometimes leads to inaccurate understanding of the meaning and/or import of estimates. Particularly common is an apparently widespread lack of understanding of the substantial difference between the terms ìreservesî and ìresourcesî, as indicated by the frequent misuse of either term in place of the other.

Gas Resource Base

A map of natural gas basins in North America

Source: Potential Gas Committee

The total resource base of oil and gas is the entire volume formed and trapped in-place within the Earth before any production. The largest portion of this total resource base is nonrecoverable by current or foreseeable technology. Most of the nonrecoverable volume occurs at very low concentrations throughout the earthís crust and cannot be extracted short of mining the rock or the application of some other approach that would consume more energy than it produced. An additional portion of the total resource base cannot be recovered because currently available production techniques cannot extract all of the in-place oil and gas even when present in commercial concentrations. The inability to recover all of the in-place oil and gas from a producible deposit occurs because of unfavorable economics, intractable physical forces, or a combination of both. Recoverable resources, the subset of the total resource base that is of societal and economic interest, are defined so as to exclude these nonrecoverable portions of the total resource base.

This graph shows the Natural Petroleum Council's estimate of the composition of North America's natural gas resouce base. Also, see a map of the resource base.
Source: Natural Gas Council

The total resource base first consists of the recoverable and nonrecoverable portions discussed above. The next level down divides recoverable resources into discovered and undiscovered segments. Discovered resources are further separated into cumulative (i.e., all past) production, and reserves. Reserves are additionally subdivided into proved reserves and ìother reservesî.

Recoverable Resources

Discovered recoverable resources are those economically recoverable quantities of oil and gas for which specific locations are known. While the specific locations of estimated undiscovered recoverable resources are not yet known, they are believed to exist in geologically favorable settings.

Current estimates of undiscovered recoverable resources merit discussion in order to provide a useful sense of scale relative to proved reserves. The USGS defines undiscovered recoverable conventional resources as those expected to be resident in accumulations of sufficient size and quality that they could be produced using conventional recovery technologies, without regard to present economic viability. Therefore, only part of the USGS undiscovered recoverable conventional resource is economically recoverable now. The USGS also defines a class of resources that occur in ìcontinuous-typeî accumulations.

Unlike conventional oil and gas accumulations, continuous-type accumulations do not occur in discrete reservoirs of limited areal extent. They include accumulations in low-permeability (tight) sandstones, shales, and chalks, and those in coal beds. Again, only part of the continuous-type technically recoverable resource is economically recoverable now. In fact, only a small portion of the in-place continuous-type resource accumulations are estimated to be technically recoverable now.

Subtracting EIAís estimate of proved reserves total for wet natural gas yields an unproven technically recoverable gas resource target of 1,094 Tcf. This is about 57 times the 1994 gas production level. Other organizations have also estimated unproven technically recoverable gas resources. Another recent estimate was made by the National Petroleum Council (NPC), an industry-based group that serves in an advisory capacity to the U.S. Secretary of Energy. The NPCís estimate, based on data available at year-end 1990, was 1,135 Tcf, 41 Tcf more than the DOI estimates. The differences among these estimates are usually due to the differences in coverage or resource category definitions and to legitimate but differing data interpretations.

While the estimation of undiscovered resources is certainly a more imprecise endeavor than is the estimation of proved reserves, it is clear that substantial volumes of technically recoverable oil and gas resources remain to be found and produced domestically. Current estimates indicate that as much domestic gas remains to be found and then produced as has been to date. Of course, much effort, investment and time will be required to bring this gas to market.

Discovered Resources

In addition to cumulative production, which is the sum of current year production and the production in all prior years, estimates of discovered recoverable resources include estimates of reserves. Broadly, reserves are those volumes that are believed to be recoverable in the future from known deposits through the eventual application of present or anticipated technology.

Reserves

Reserves include both proved reserves and other reserves. Several different reserve classification systems are in use by different organizations, as preferred for operational reasons. These systems utilize and incorporate various definitions of terms such as measured reserves, indicated reserves, inferred reserves, probable reserves, and possible reserves. As used by the different organizations, the definitions that attach to these terms sometimes overlap, or the terms may require a slightly different interpretation from one organization to the next. Nevertheless, all kinds of ìother reservesî are generally less well known and therefore less precisely quantifiable than proved reserves, and their eventual recovery is less assured.

Measured reserves are defined by the USGS as that part of the identified (i.e., discovered) economically recoverable resource that is estimated from geologic evidence and supported directly by engineering data. They are similarly defined by the MMS, although its system also subdivides them by degree of development and producing status. Measured reserves are demonstrated with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, and are essentially equivalent to proved reserves as defined by the EIA. Effectively, estimates of proved reserves may be thought of as reasonable estimates (as opposed to exact measures) of ìon-the-shelf inventory.î

Inferred reserves and indicated reserves, due to their more uncertain economic or technical recoverability, are included in the ìother reservesî category. The USGS defines inferred reserves as that part of the identified economically recoverable resource, over and above both measured and indicated (see below) reserves, that will be added to proved reserves in the future through extensions, revisions, and the discovery of new pay zones in already discovered fields. Inferred reserves are considered equivalent to ìprobable reservesî by many analysts, for example, those of the Potential Gas Committee (PGC)- in industry sponsored group.

Indicated additional reserves, a separate category, are defined by both the DOI and the EIA as quantities of natural gas that may become economically recoverable in the future from existing productive reservoirs through the application of currently available but as-yet uninstalled recovery technology. At such time as the technology is successfully applied, indicated additional reserves are reclassified to the proved reserves category.

Proved Reserves

The EIA defines proved reserves as those volumes of oil and gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved reserves are either proved producing or proved nonproducing (i.e., resident in reservoirs that did not produce during the report year). The latter may represent a substantial fraction of total proved reserves. Map of the United States Proved Reserves.

Recent Figures on Reserves and Production

nited States proved reserves of dry natural gas were up 1 percent in 1994. This was the first gain in 4 years. Large gas discoveries in the Federal offshore, several of them in deep water, played a major role. Also, in 1994, gas production reached the highest level since 1981. Total discoveries were up substantially, as were revisions and adjustments. These combined to replace 108 percent of gas production, which also increased in 1994. The last gas reserves increase was in 1990, and the one before that was in 1981.

Lower 48 States gas reserves have been generally declining since natural gas prices peaked in 1983. U.S. total discoveries of dry gas reserves were 12,315 Bcf in 1994, an increase of 39 percent more than 1993. Total discoveries are those reserves attributable to field extensions, new field discoveries, and new reservoir discoveries in old fields. They result from drilling exploratory wells. The net volume of revisions and adjustments to reserves also played a significant role in increasing U.S. natural gas proved reserves. It amounted to 7,429 billion cubic feet in 1994, an 18 percent increase over 1993. Texas had the largest increase in revisions and adjustments. Its proved gas reserves increased in 1994. Successful infill drilling between existing field wells played a major role in this increase.

Dry Natural Gas

otal discoveries are those reserves attributable to field extensions, new field discoveries, and new reservoir discoveries in old fields; they result from drilling exploratory wells. Total discoveries of dry natural gas reserves (from which impurities have been removed) were 12,315 Bcf, an increase of 39 percent (3,447 Bcf) from that reported in 1993. These total discoveries are equivalent to two-thirds of the level of 1994 gas production. About one-half of the total discoveries were in the Gulf of Mexico Federal Offshore and south Texas (RRC District 4).

The Nation's proved reserves of dry natural gas were 163,837 Bcf, 0.9 percent (1,422 Bcf) more than in 1993. In the lower 48 States, reserves increased by 1 percent (1,596 Bcf).

Source: EIA

Dry natural gas production increased 3 percent in 1994. This was the highest level of production of dry natural gas since 1981. The trend of increasing gas production is welcome news and in keeping with the various initiatives by the upstream industry, some State governments and the Department of Energy. These initiatives involve increasing the share of domestic natural gas in the Nation's energy supply. The Gulf of Mexico Federal Offshore and the State of Texas, each with over one-fourth of the U.S. total, were the leading producers of dry natural gas in 1994. The next three States combined, Oklahoma (9 percent), Louisiana (8 percent), and New Mexico (7 percent) added another one-fourth of the production.

SOURCES

Energy Information Administration, U.S. Department of Energy
Minerals Management Services, U.S. Department of the Interior
National Petroleum Council, The Potential for Natural Gas in the United States.

Publications of the Natural Gas Council and the Natural Gas Supply Association.