The important biennial assessment of United States natural gas resources was released last month by the Potential Gas Committee, a grouping of 145 volunteer specialists in the natural gas field. The press release for the report can be found here and the accompanying slides here.
The report always attracts a lot of erroneous claims that the United States has 100-years of natural gas; indeed, President Obama repeated the same mistake in his State of the Union address that I previously blogged on here. The report is principally concerned with “technically recoverable natural gas resources”; that is, those gas resources that can be recovered if price was not an issue. To quote directly from the press release:
Dr. Curtis cautioned, however, that the current assessment assumes neither a time schedule nor a specific market price for the discovery and production of future gas supply. “Assessments of the Potential Gas Committee represent our best understanding of the geological endowment of the technically recoverable natural gas resource of the United States,” he explained.
Keeping this caveat in mind, fracking technology has nonetheless led to a boom in gas prospecting, which is clearly visible in the recent uptrend in natural gas resources stated in consecutive biennial reports (click for larger image):
The 2,226 trillion cubic feet of traditional gas resources (traditional by their definition includes shale gas) compares with 305 tcf of proved reserves as published by the Energy Information Administration (EIA).
The EIA’s proved reserves of crude oil, natural gas liquids and natural gas can be found here (latest figures are for 2010); moreover, the 305 tcf is for dry natural gas and can be found in this EIA table here. Proved reserves (as opposed to resources) are those known gas reservoirs from which gas can be extracted at existing prices, technology and infrastructure. To put these numbers in context, the U.S. consumed 25.5 tcf in 2012, so proved reserves are sufficient for 12 years of consumption.
Of the three resource categories—probably, possible and speculative—probable resources are equivalent to 28 years of 2012 equivalent consumption. A more thorough treatment of the assessment methodology and category definitions can be found in this this appendix to the MIT 2001 interdisciplinary report entitled “The Future of Natural Gas” which is well worth reading and can be found here.
The migration of speculative, possible and probable resource toward, or into, proved reserve is dependent on two main variables: price and technology. A rising price may move some possible resources into proved reserves, but it may also reduce the competitiveness of natural gas vis a vis coal and renewables and ultimately stymie economic growth. Accordingly, any commentary within the media claiming that fracking technology has removed the energy constraint on the U.S. economy should be taken with a pinch of salt.