Natural Gas Technically Recoverable Resources
Natural Gas Resource Category(Trillion Cubic Feet)
As of January 1, 2000
Nonassociated Gas
Undiscovered
247.71
Onshore
121.61
Offshore
126.1
Deep
81.56
Shallow
44.52
Inferred Reserves
232.7
Onshore
183.03
Offshore
47.68
Deep
7.72
Shallow
39.96
Unconventional Gas Recovery
369.59
Tight Gas
253.83
Shale Gas
55.42
Coalbed Methane
60.35
Associated-Dissolved Gas
140.89
Total Lower 48 Unproved
990.89
Alaska
32.32
Total U.S. Unproved
1023.21
Proved Reserves
167.41
Total Natural Gas
1190.62
Source: Energy Information Administration - Annual Energy Outlook 2002
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Natural Gas Supply Outlook
Ample supplies of natural gas are available at competitive prices to help meet the nation's growing energy needs. Because natural gas is the cleanest burning fossil fuel, it is playing an increasing role in helping to attain national goals of a cleaner environment, energy security and a more competitive economy.
The natural gas industry currently provides about 25 percent of the energy consumed in the United States, and accounts for 31 percent of the nation's energy production. It supplies more than one-half of the energy consumed by residential and commercial customers, and about 41 percent of the energy used by U.S. industry.
One of the most frequently referenced estimates of conventionally recoverable U.S. natural gas resources is that of the Potential Gas Committee (PGC) of the Colorado School of Mines. Based on its 1997 report, total U.S. recoverable natural gas resources are 1,234 trillion cubic feet (Tcf), including the U.S. Department of Energy's (DOE) estimate of 166 Tcf of proved reserves. This translates into a 65-year supply at current production levels. Many energy experts believe that the
United States has several hundred years of natural gas supplies.
After a decade of weak demand, beginning in the mid-70s, which was characterized by falling prices and a supply surplus, natural gas demand in the United States has increased about 35 percent since 1986. The American Gas Association projects that natural gas demand will continue to grow well into the next century, and that there will be growing supplies to meet new demand at competitive prices.
The supply surplus in the 1980s discouraged drilling activity. Despite the lower drilling levels, large amounts of new natural gas reserves have been found, primarily because of new exploration and drilling technologies. For the past decade, additions to proved reserves annually have averaged more than 90 percent of gas production. As natural gas demand increases and technology continues to improve recovery rates, it is expected that there will continue to be a high level of reserves replacement.
The natural gas industry can respond quickly to demand increases by using both lower-48 state sources and by developing near-term supplemental sources. This short-term capability is found in four supply categories. They are:
Uncommitted Nonproducing Reserves. There are significant gas reserves now available in the lower-48 states that are not being produced. DOE's Energy Information Administration estimates this nonproducing gas at 33 Tcf. Much of this gas could be brought to the market quickly (in less than a year), with an annual deliverability of about 0.75 Tcf.
Canadian Gas. U.S. companies currently have contracts with Canadian producers and marketers to import significant volumes of Canadian gas. In 1996, about 2.9 Tcf was imported.
Accelerated Infill Drilling. In the early 1980s, gas deliverability increased as a result of extensive infill drilling in known gas fields (adding new wells to existing fields to enhance extraction of gas). Many U.S. natural gas fields are excellent areas in which accelerated infill drilling would further increase production capability.
Liquefied Natural Gas. There are four liquefied natural gas (LNG) terminals in the United States that were operational in the early 1980s. Two are operating today -- and all of them could become operational again, if demand warranted. Collectively, these terminals have the capacity to handle up to 850 billion cubic feet (Bcf) per year. In the event that additional gas supplies were needed in the United States, 200 Bcf could be realized from LNG within 12 months from the two terminals currently operational, and up to 500 Bcf/year with longer lead times.
Overall, a short-term gas supply response potential of over 1.2 Tcf/year exists, most of which could be available in about a year. These additional sources should ensure that natural gas supplies will grow in response to rising demand.
. Coalbed methane has become a significant supply source. It is currently estimated that more than 146 Tcf of methane can be recovered. Department of Energy statistics indicate that 1.0 Tcf of coalbed methane was produced in the United States in 1996.
Two other sources of gas energy that hold potential for the future are biomass and urban landfills. Although these sources are renewable, market demand and the economics of production have limited their development. Biomass, which refers primarily to either land or aquatic plant material, can be processed to produce gas energy. However, further research in harvesting and conversion techniques are needed. Urban landfills currently produce about 4 Bcf of high-Btu gas a year.
Large deposits of natural gas await discovery in the outer continental shelf (OCS) along the U.S. coastline. Currently, offshore areas provide about 28 percent of the total natural gas produced in the United States. Most of this gas comes from the Gulf of Mexico. In addition to proved reserves of over 30 Tcf, it is estimated that total OCS gas resources, including Alaska, amount to about 272 Tcf.
. Future natural gas supply depends in large part on new technologies and on the economics of production. However, given the magnitude of the resource base from which future supplies will be drawn and the diversity of supply sources, there is no doubt that adequate natural gas supplies can be available far into the next century.
For more information, contact dmagnuson@aga.org Daphne Magnuson, AGA Public Relations.
1. What Is Natural Gas and History of Use
Natural gas is generally considered a nonrenewable fossil fuel. (There are some renewable sources of natural gas; we'll discuss these later.) Natural gas is called a fossil fuel because most scientists believe that natural gas was formed from the remains of tiny sea animals and plants that died 200-400 million years ago.
When these tiny sea animals and plants died, they sank to the bottom of the oceans where they were buried by layers of sand and silt. Over the years, the layers of sand and silt became thousands of feet thick, subjecting the energy-rich plant and animal remains to enormous pressure. Most scientists believe that the pressure, combined with the heat of the earth, changed this organic mixture into petroleum and natural gas. Eventually, concentrations of natural gas became trapped in the rock layers much like a wet household sponge traps water.
Raw natural gas is a mixture of different gases. Its main ingredient is methane, a natural compound that is formed whenever plant and animal matter decays. By itself, methane is odorless, colorless, and tasteless. As a safety measure, natural gas companies add a chemical odorant (it smells like rotten eggs) so escaping gas can be detected. Natural gas should not be confused with gasoline, which is made from petroleum.
History of Natural Gas
The ancient peoples of Greece, Persia, and India discovered natural gas many centuries ago. The people were mystified by the burning springs created when natural gas seeping from cracks in the ground was ignited by lightning. They sometimes built temples around these eternal flames so they could worship the fire.
About 2,500 years ago, the Chinese recognized that natural gas could be put to work. The Chinese piped the gas from shallow wells and burned it under large pans to evaporate sea water for salt.
Natural gas was first used in America to illuminate the streets of Baltimore in 1816. Soon after, in 1821, William Hart dug the first successful American natural gas well in Fredonia, New York. His well was 27 feet deep, quite shallow compared to today's wells. The Fredonia Gas Light Company opened its doors in 1858 as the nation's first natural gas company. By 1900, natural gas had been discovered in 17 states. In the past 40 years, the use of natural gas has grown dramatically. Today, natural gas accounts for about a quarter of the energy we use.
2. Producing Natural Gas
Natural gas can be hard to find since it can be trapped in porous rocks deep underground. Scientists use many methods to find natural gas deposits. They may look at surface rocks to find clues about underground formations. They may set off small explosions or drop heavy weights on the surface and record the sound waves as they bounce back from the rock layers underground. They also may measure the gravitational pull of rock masses deep within the earth.
If test results are promising, the scientists may recommend drilling to find the natural gas deposits. Natural gas wells average 6,000 feet deep and can cost more than $75 per foot to drill, so it's important to choose sites carefully. On average, 27 out of every 100 exploratory wells produce gas. The others come up "dry." (The odds are better f or developmental wells-wells drilled on known gas fields. On average, 80 out of every 100 developmental wells yield gas.) Natural gas can be found in pockets by itself or in petroleum deposits.
After natural gas comes out of the ground, it goes to a processing plant where it is cleaned of impurities and separated into its various components. Approximately 90 percent of natural gas is composed of methane, but it also contains small amounts of other gases such as propane and butane.
Natural gas may also come from several other sources. One source is the gas found in coalbeds. Until recently, coalbed gas was just, considered a safety hazard to miners, but now it is a valuable source of natural gas.
Another source of natural gas is the gas produced in landfills. Landfill gas is considered a renewable source of natural gas since it comes from decaying garbage. The gas from coalbeds and landfills accounts for three percent of the total gas supply today, yet their contribution could double by the year 2010.
Today natural gas is produced in 32 states, though just three states--Texas, Louisiana, and Oklahoma-produce 61 percent of the country's natural gas. Altogether, the United States produces nearly 22 percent of the world's natural gas each year. In 1994 the United States imported 12 percent of its natural gas from other countries-mostly from Mexico and Canada.
Transporting and Storing Natural Gas
How does natural gas get to you, the consumer? Usually by pipeline. More than one million miles of underground pipelines link natural gas fields to major cities across the United States. Natural gas is sometimes transported thousands of miles by pipeline to its final destination. A machine called a compressor increases the pressure of the gas, forcing the gas to move along the pipelines. Compressor stations, which are spaced about 50 to 100 miles apart, move the gas along the pipelines at about 15 miles per hour.
Some gas moved along this subterranean highway is temporarily stored in huge underground reservoirs. The underground reservoirs are typically filled in the summer so there will be enough natural gas during the winter heating season.
Eventually, the gas reaches the "city gate" of a local gas utility. Here, the pressure is reduced and an odorant is added so leaking gas can be detected. Local gas companies use smaller pipes to carry gas the last few miles to homes and businesses. A gas meter measures the volume of gas a consumer uses.
3. Who Uses Natural Gas and How Much?
Just about everyone in the United States uses natural gas. Natural gas ranks number three in energy use, right after petroleum and coal. Twenty-three percent of the energy we use in the United States comes from natural gas.
Industry is the biggest consumer of natural gas, using it mainly to manufacture goods. Industry also uses natural gas as an ingredient in fertilizer, photographic film, ink, glue, paint, plastics, laundry detergent, and insect repellents. Synthetic rubber and man-made fibers like nylon also could not be made without the chemicals derived from natural gas.
Residences are people's homes. Residences are the second biggest users of natural gas. Six in ten homes use natural gas for heating. Many homes also use gas water heaters, stoves, and clothes dryers.
Like residences, commercial use of natural gas is mostly for heating. Commercial use includes stores, offices, schools, churches, and hospitals.
Natural gas is also used to make electricity. Just as the heat energy in coal is used to make electricity, so can the heat energy in natural gas. Many people in the energy industry believe natural gas will play a bigger role in electricity production as the demand for electricity increases in the future. Why? Because natural gas power plants are cheaper and cleaner than coal plants. Natural gas plants produce electricity about 20 percent more efficiently than new coal plants, and they produce it with far fewer air-polluting emissions.
To a lesser degree, natural gas is making inroads as a transportation fuel. Natural gas can be used in any vehicle with a regular internal combustion engine, although the vehicle must be outfitted with a special carburetor and fuel tank. Natural gas is cleaner burning than gasoline, costs less, and has a, higher octane (power boosting) rating. Today more than 30,000 cars, trucks, and buses run on natural gas in the United States.
Natural Gas Reserves
People in the energy industry use two special terms when they talk about how much natural gas there is- resources and reserves. Natural gas resources include all the deposits of gas that are still in the ground waiting to be tapped.
Natural gas reserves are only those gas deposits that scientists know, or strongly believe, can be recovered given today's prices and drilling technology. In other words, when scientists estimate the amount of known gas reserves, they do not include gas deposits that may be discovered in the future or gas deposits that are not economical to produce given today's prices. (You can think of reserves this way. if it cost you $10 to manufacture a box of yoyos that you could sell for $8, would you make the yoyos? Of course not! You would lose $2 on every box.)
The United States has large reserves of natural gas. Most reserves are in the Gulf of Mexico and in the following states: Texas, Louisiana, Oklahoma, New Mexico, Wyoming, Kansas, and Alaska. If we continue to use natural gas at the same rate as we use it today, the United States has about a 50-year supply of natural gas, though another 200 years of additional gas supplies could be produced if people are willing to pay more for the gas they use.
New Ways to Use and Produce Natural Gas
Because natural gas is cleaner than coal or petroleum, scientists are researching new ways to use and produce it.
Fuel Cells
Many scientists are interested in using natural gas to generate electricity. Engineers have already developed ways to use coal/petroleum and natural gas together to generate electricity, but a device called a fuel cell can use natural gas alone. A fuel cell is similar to a battery. It uses a chemical process rather than combustion (burning) to convert the energy of a fuel into electricity. The chemical process is much more energy-efficient than combustion and it emits no air pollutants. Unfortunately, the technology to generate electricity from fuel cells must be improved if it is to be commercially successful.
Biomass
Scientists are also researching new ways to obtain natural (methane) gas from biomass--a fuel source derived from plant and animal wastes. Methane gas is naturally produced whenever organic matter decays. Today we can drill shallow wells into landfills to recover the methane gas. Landfills are already required to collect methane gas as a safety measure. Typically, landfills collect the gas and bum it to get rid of it. But the gas can be put to work. Last year over four billion cubic feet of landfill methane gas was used for heating and electricity production.
There are other ways to convert biomass into natural gas. One method converts aquatic plants, such as sea kelp, into methane gas. In the future, huge kelp farms could also produce renewable gas energy.
Liquid Natural Gas
Another successful development has been the conversion of natural gas into a liquid state. In its liquid state, natural gas is called LNG, or liquid natural gas.
LNG is made by cooling natural gas to a temperature of minus 260 degrees F. At that temperature, natural gas becomes a liquid and its volume is reduced 615 times. (A car reduced 615 times would fit on your thumbnail.) Liquid natural gas is easier to store than the gaseous form since it takes up much less space. LNG is also easier to transport. People can put LNG in special tanks and transport it on trucks or ships. Today more than 100 LNG storage facilities are operating in the United States.
4. Natural Gas Prices and the Environment
Since 1985, natural gas prices have been set by the market. The federal government sets the price of transportation for natural gas that crosses state lines. State public utility commissions will continue to regulate natural gas utility companies-just as they regulate electric utilities.
These commissions regulate how much utilities may charge their customers, and they monitor the utilities' policies.
So how much does it costs to heat your home with natural gas? Compared to other energy sources, natural gas is a good buy. Heating your home with natural gas is cheaper than any other major heating source. It is more than four times less expensive than electricity when you use resistance heat. It is 25 percent less expensive than electricity when you use a heat pump.
Natural Gas and the Environment
All the fossil fuels coal, petroleum, and natural gas-release pollutants into the atmosphere when burned to provide the energy we need. The list of pollutants they release reads like a chemical cornucopia-carbon monoxides, reactive hydrocarbons, nitrogen oxides, sulfur oxides, and solid particulates (ash or soot).
The good news is that natural gas is the most environmentally friendly fossil fuel. It is cleaner burning than coal or petroleum because it contains less carbon than its fossil fuel cousins. Natural gas also has less sulfur and nitrogen compounds, and it emits less ash particulates into the air when it is burned than coal or petroleum fuels.
One final statement from me. I read a national Geographic in 1997 that showed at current usage rates we had an estimated 1000 year supply of natural gas and a 1000 year supply of Coal. I haven't done a big ol' search through their archives (lazy I guess) I should have just stole the mag from the Doc's office, but I didn't-whoopy and who cares, but it is there buried in their archives.
And finally these two articles were not written by me but they are free to the public links provided.
WTF are we doing going to other countries for our energy supplies?!
Nuff said.
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