Study Finds Nation’s Natural Gas Supply Will Last Well Into Next Century

The American Gas Association’s recently released analysis on the nation’s natural gas supply details the robust supply picture and quells any doubts about the ability of natural gas to supply the country well into the next century. The analysis, U.S. Natural Gas Supply: Then There Was Abundance, provides critical information on conventional and unconventional natural gas supply sources.

As noted in the analysis, AGA believes that the strength of gas supply in the U.S. is not only founded on the abundance of the methane in North America but the diversity of those supplies as well.

Certainly a strong point of the analysis is the nation’s reserve picture. The analysis indicates natural gas reserves have grown from 169 Tcf in 1990 to more than 245 Tcf (a 45% increase) at year-end 2008 because new discoveries, extensions and revisions of prior reserves data have outgained the pace of production. Moreover, much of the most recent reserve growth has come in the form of less conventional sources of natural gas such as coal seams and gas shales.
The analysis also provides concise answers to commonly asked questions about natural gas supply, such as Canada’s ability to send natural gas to the U.S. and the implications of recent shale discoveries.
Of particular note in the report is a discussion on the most often asked questions regarding supply elements and the following straight-forward answers provided:

1. How have the revelations in shale-gas development changed the U.S. gas supply picture?
The Potential Gas Committee now identifies about 600 Tcf of natural gas resource potential attributable to shales alone. It is the success of drilling and completion technologies among other factors that have allowed the inclusion of this significant resource volume in the U.S. undiscovered resource base. This recent recognition of the shale-related resource potential has increased the overall view of domestic gas supply compared to annual production from a 65- to 100-year life. In addition, some analysts who point to 8 Bcf/d of shale-gas production in the U.S. today, believe that the volume could be increased to 13-15 Bcf/d (or higher) in only a matter of years, not decades, and thus become a prominent factor in
meeting future gas requirements or even growing natural gas demand.

2. To what extent will pipeline supplies of natural gas from Canada be sustained in the U.S. market?
Daily natural gas production in Canada has fallen from about 16 Bcf/d to less than 13 Bcf/d in less than five years. About half of current Canadian production is exported to the U.S. Both domestic use and the struggle to sustain production in Canada may limit future exports to the U.S. – in fact, may significantly limit pipeline exports – in the eyes of many energy analysts. With that said, the addition of LNG import capacity and the potential for unconventional resource development in Canada (following the technology path established in the U.S.) may tip the pessimism around future Canadian gas supply to a more favorable view in the future.