Examining U.S. Natural Gas Supply 2011 (Energy Analysis 01/26/2011) 

 Even with the economic recession of 2009 and the uneven recovery during 2010, approximately 22-23 trillion cubic feet (tcf) of natural gas was consumed in the United States each year. That demand requirement has been met by a variety of natural gas supply sources – sources that have evolved and changed for more than a decade. However, a trend is developing that is unfamiliar to many Americans in the energy arena, particularly since the 1970s. Supplies of natural gas, which are consumed in many sectors of the U.S. economy, are actually growing – not precipitously declining – and have been increasing for the past four years.  For most of the past 30 years, messaging around natural gas supply (and all hydrocarbons for that matter in the United States) has often been negative with outlooks reflecting shortages and domestic production reductions. In fact, for many years promoting natural gas as a long-term solution within our national energy supply mix was simply considered to be irrational.

Today, that view has changed. Natural gas is abundant in North America. Proved domestic reserves are their highest in 40 years and domestic production is the strongest since 1974. Estimates of the resource underpinning for these tangible increases have grown dramatically during the past 20 years (since 1990), as technology has helped to make less conventional sources of natural gas from coal seams, tight sands and gas shales producible in economic quantities. Reservoirs of natural gas today are found offshore and onshore. Reservoir geology includes sandstones, fractured tight sands, carbonate rocks, coal seams and, of course, low-permeability shales. Organic-rich sediments, ancient stream beds and tectonically complex subsurface layers can provide environments conducive to hydrocarbon accumulations. Wells to produce the gas can be remote, located in an urban setting or drilled next to a farmer’s barn. They come as horizontal, directional or vertical wellbores. In short, they come in all shapes and sizes and it is this diversity that has made the United States the leading natural gas producing country in the world.

Natural gas resource abundance specific to the United States is currently being assessed and defined by groups such as the Potential Gas Committee (Colorado School of Mines) and the Energy Information Administration (EIA). The numbers are large – 100 years of natural gas supply in the United States at current production levels – and they are poised to grow even more. So what changed? Not only quantitatively, but what is the qualitative view of potential natural gas supply in the United States from existing and future sources including, domestic production, pipeline imports, LNG and even arctic gas?

This energy analysis examines the current view of natural gas supply in and available to the United States, the sources of that supply and comments on future potential. It is intended to be a simple and direct reflection of the key natural gas supply sources and does not capture every nuance of national or world energy markets. The question answered with this paper is relatively straight forward. If natural gas continues to be consumed at 23 tcf per annum or consumption even grows, what are the most likely sources of supply to meet market demand?

Full Report:   Examining U.S. Natural Gas Supply 2011 (EA 2011-01, Jan 26 2011)

Direct inquiries to:  Chris McGill, Managing Director Policy Analysis, (202) 824-7134

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