Marcellus Region Contains Huge 33% of All U.S. Recoverable NatGas

The Potential Gas Committee (PGC), a private non-profit organization loosely affiliated with the Colorado School of Mines, performs a comprehensive study of potential supplies of natural gas in the United States every two years. The 2012 study has just been released and it’s truly astonishing. PGC says as of the end of 2012, the U.S. has a technically recoverable resource base of 2,384 trillion cubic feet (Tcf) of natural gas—the highest number they’ve seen since they started their evaluations 48 years ago. The 2012 number is a whopping 26% increase from just two years ago, when it was 1,898 Tcf. (MDN has embedded a slide presentation below with some useful charts—be sure to check out the chart on page 7.)

Aside from the sheer increase, the other major item to note about the 2012 study is that the PGC credits the Marcellus Shale with pushing the "Atlantic region" of the country to the top as the country’s "richest resource area" with a full 33% of recoverable natural gas. PGC credits the Marcellus Shale for the Atlantic’s rise to prominence. Thank you for fracking!

Here’s the extensive press release and summary of the study:

The Potential Gas Committee (PGC) today released the results of its latest biennial assessment of the nation’s natural gas resources, which indicates that the United States possesses a total technically recoverable resource base of 2,384 trillion cubic feet (Tcf) as of year-end 2012. This is the highest resource evaluation in the Committee’s 48-year history, exceeding the previous high assessment (from 2010) by 486 Tcf. Most of the increase arose from new evaluations of shale gas resources in the Atlantic, Rocky Mountain and Gulf Coast areas.

These changes have been assessed in addition to 49 Tcf of domestic marketed-gas production estimated for the two-year period since the Committee’s previous assessment.

“The PGC’s year-end 2012 assessment reaffirms the Committee’s conviction that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, and in all types of reservoirs—from conventional, ‘tight’ and shales, to coals,” said Dr. John B. Curtis, Professor of Geology and Geological Engineering at the Colorado School of Mines and Director of the Potential Gas Agency there, which provides guidance and technical assistance to the Potential Gas Committee.

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.

The Committee’s year-end 2012 assessment of 2,384 Tcf includes 2,226 Tcf of gas potentially recoverable from “Traditional” reservoirs (conventional, tight sands and carbonates, and shales) and 158 Tcf in coalbed reservoirs. Compared to year-end 2010, assessed Traditional resources increased by 486.4 Tcf (28%), while coalbed gas resources declined by a nominal 0.4 Tcf (0.2%), resulting in a net increase in total potential resources of 486.1 Tcf (25.6%). (See accompanying Table 1.)

When the PGC’s assessments of technically recoverable resources are combined with the U.S. Department of Energy’s latest available determination of proved reserves, 305 Tcf (dry gas) as of year-end 2010, the United States has a total available Future Supply of 2,688 Tcf, an increase of 486 Tcf over the previous evaluation. While the PGC reports these assessments of potential resources and future supply summarily on the national level, the Committee believes that the individual province-level assessment results offer the greatest value for purposes of analysis, planning and exploration.

As Dr. Curtis observed, “Our knowledge of the geological endowment of technically recoverable gas continues to improve with each assessment. Furthermore, new and advanced exploration, well drilling, completion and stimulation technologies are allowing us increasingly better delineation of and access to domestic gas resources—especially ‘unconventional’ gas—which, not all that long ago, were considered impractical or uneconomical to pursue.”

“Consequently, our present assessment, strengthened by robust domestic production levels, demonstrates an exceptionally strong and optimistic gas supply picture for the nation.”

As a result of a substantial increase in the assessment of Appalachian basin shale gas, the PGC now ranks the Atlantic area as the country’s richest resource area with 33% of total U.S. Traditional resources, followed by the Gulf Coast (including the Gulf of Mexico) and Rocky Mountain areas, which together account for 76% of the assessed total Traditional resource. (See accompanying Table 2.) Changes in the total assessment from 2010 to 2012 arose primarily from analyses of recent drilling, well-test and production data from these three regions. The largest volumetric and percentage gains were reported for Appalachian basin shales (primarily the Marcellus but including other Devonian shales and the Utica), which collectively rose by 335 Tcf (147%). A substantial increase, 21.6 Tcf (58%), also was made for the Eagle Ford Shale in the Texas Gulf Coast basin. Cretaceous shales in the Rocky Mountain area figured prominently in new record-high assessments for the Greater Green River basin (Baxter and Hilliard Shales) and San Juan basin (Mancos and Lewis Shales), in each case more than double the province’s total potential gas assessment for 2010. Reevaluation of another unconventional resource, the Niobrara Formation, led to a new record assessment of 7.5 Tcf for the Denver basin, a jump of nearly 3.5 Tcf (86%).

The growing importance of shale gas is substantiated by the fact that the PGC’s total assessed shale gas resource of 1,073 Tcf for 2012 accounts for approximately 48% of the country’s total Traditional potential resources.

PGC’s new concise biennial report includes a complete overview of the national aggregated mean-value assessment statistics, including tables and graphs, together with an area-by-area comparison of assessment results for year-end 2010 and 2012 and decennial changes in area-level assessments from 2002–12. The second chapter examines the 2012 evaluations at the area and province levels and discusses the factors behind the principal changes in assessments between 2010 and 2012. Also included are graphs for each area that track historical trends in the Committee’s “most likely” (nonaggregated) assessments since 1984 and the aggregated mean values since 1990. The concluding chapter presents definitions and details of the PGC’s resource assessment methodology.

Details of the Potential Gas Committee’s Natural Gas Resource Assessment

(as of December 31, 2012)

The Potential Gas Committee (PGC) reports its biennial potential gas resource assessments in three categories of decreasing geological certainty—Probable, Possible and Speculative. For each category, a minimum, most likely and maximum volume is assessed in each of 90 onshore and offshore provinces in the Lower 48 States and Alaska. The category and total mean values shown in Table 1 below were computed by statistical aggregation of the minimum, most likely and maximum value distributions for each category, in turn, for all provinces combined. Mean values for Total Traditional Resources and Total Coalbed Gas Resources were aggregated separately. This procedure imparts greater statistical validity to the results and allows for more direct comparison of PGC’s assessments with those made by other organizations.

The PGC’s assessments are not static. Based on new exploration results, drilling and production information and various other data that become available, PGC members may reclassify resources at the province level from one category to another and to proved reserves.

Table 1.

Table 1

* Mean values for Probable, Possible and Speculative resources are not arithmetically additive in deriving Total Traditional Gas Resources and Total Coalbed Gas Resources.

** The separately aggregated mean values for Total Traditional Resources and Total Coalbed Gas Resources are arithmetically additive in deriving Grand Total Potential Resources.

† Latest available figure is for year-end 2010.

Note: Totals are subject to rounding and differences due to statistical aggregation of distributions.

PGC’s 90 geological provinces are grouped into seven geographic assessment areas. In similar fashion as above, the minimum, most likely and maximum value ranges for each category of Traditional resources in each province within an area are aggregated at the area level to yield mean values for Probable, Possible and Speculative Traditional resources and a separately aggregated area total. Coalbed gas resources are aggregated only at the national level. Table 2 compares the mean values for these areas for year-end 2012 and year-end 2010.

Table 2.

Table 2

* Mean values of Traditional Resources for the seven areas are not arithmetically additive in deriving Total U.S. Traditional Resources, which is a separately aggregated value. Area-level changes in values from 2010 to 2012 likewise are not arithmetically additive in deriving the total change.

** The separately aggregated mean values for Total U.S. Traditional Gas Resources and Coalbed Gas Resources are arithmetically additive in deriving Grand Total Potential Resources.

† Latest available figure is for year-end 2010.

Note: Totals are subject to rounding and differences due to statistical aggregation of distributions.

How to Obtain the Potential Gas Committee 2012 Report

Orders for the PGC report, Potential Supply of Natural Gas in the United States (December 31, 2012) may now be placed with the Potential Gas Agency, Colorado School of Mines, Golden, CO 80401-1887. The cost of the printed report is US$295 (plus 7.5% sales tax for Colorado orders) if payment accompanies the order. All purchasers will receive both the printed report and a digital version (pdf) of the document on CD-ROM (or USB flash drive).

For additional information about ordering these and previous reports and DVDs, please contact Linda D’Epagnier, Program Assistant, at the Potential Gas Agency, telephone 303-273-3886, fax 303-273-3574, or e-mail: [email protected]*

    *Potential Gas Committee (Apr 9, 2013) – Potential Gas Committee Reports Significant Increase in Magnitude of U.S. Natural Gas Resource Base

      Here’s the slide presentation with loads of interesting charts: