US natgas resources grow but access is limited

13 September 2007 22:42  [Source: ICIS news]

WASHINGTON (ICIS news)--US natural gas resources have grown by 16% in two years, but increasing demand along with political and cost constraints on drilling likely will leave the US dependent on foreign gas supplies, industry officials said on Thursday.

 

The Potential Gas Committee, which combines researchers from gas producers, distributors, academia and government agencies, said it estimates domestic US natural gas resources this year at 1,525trn cubic feet (tcf).

 

The US consumes about 22-23 tcf annually.

 

Domestic gas resources are crucial to US chemicals manufacturers because they are heavily dependent on gas as a feedstock.

 

In addition to being 16% higher than the committee’s last biennial report in 2004, the new gas resources estimate represents the largest increase since 1968.

 

The committee’s estimate includes existing and possible gas fields along with so-called frontier fields that have not been drilled but have detectable gas reservoirs that could be developed depending on market forces.

 

Most of the gain in potential gas resources, said the committee, can be attributed to success in extracting gas from shales and coal seams in the mid-continent region of the US, which includes much of Texas and major portions of Oklahoma, Kansas and Nebraska.

 

However, the committee’s estimate of a significant increase in natural gas resources does not necessarily mean that they will be available to US consumers, committee officials noted at a press conference.

 

For example, the estimated potential gas resources include substantial gas basins known to be under US outer continental shelf regions, but 85% of those offshore areas are closed to drilling under a 26-year-old congressional ban.

 

Chris McGill, managing director for policy analysis at the American Gas Association (AGA), a member of the committee, said that possible congressional action to control US carbon emissions in the context of the global warming debate could sharply increase domestic demand from electric utility companies seeking gas as a more environmentally friendly fuel than coal.

 

“We could see considerably more gas consumption and demand in the years ahead,” McGill said.

 

He said that if political constraints continue to limit access to domestic supplies, US consumers will have to rely increasingly on imports of liquefied natural gas (LNG) in years ahead.

By: Joe Kamalick
+1 713 525 2653

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