Natural gas industry studies project that
United States gas consumption will increase in the early years of
this century by up to 50 percent from the current 22 trillion cubic
feet to in excess of 33 trillion cubic feet by 2015.
These robust demand projections coupled with higher
natural gas prices have translated to renewed vigor by operators
to expand exploration and development of natural gas resources throughout
the country and they have succeeded.
The resource estimate for natural gas has increased
compared to just two years ago.
In April the Potential Gas Committee released its
biennial report on natural gas resource estimates and according
to the group the total United States resource base, including proved
reserves, is 1,258 trillion cubic feet.
At current levels of domestic production, that means
that the United States has approximately a 63-year supply of natural
gas.
The year-end 2000 estimate of 1,091 trillion cubic
feet excluding proved reserves includes 936 trillion cubic feet
from traditional reservoirs and 155 trillion cubic feet from coalbed
methane reservoirs.
Compared to year-end 1998, the traditional resources
increased 4.4 percent and the coalbed methane resource increased
9.7 percent.
These increases were posted even though about 38
trillion cubic feet of domestic natural gas was produced in the
two-year period between reports.
John B. Curtis, director of the Potential Gas Agency
will present a paper at the AAPG annual meeting in Denver titled
"North American Natural Gas Supply and Demand: Perceptions and Projections,"
which will include an overview of the Potential Gas Committee's
report.
"The 2000 assessment reaffirms the committee's evaluation
of an abundant U.S. natural gas potential," he said.
Historical Trends
The Potential Gas Committee also looked at the historical
production trends of natural gas in the United States.
Gas production averaged 53.5 billion cubic feet in
1999 and the Gas Research Institute projects that 77.1 billion cubic
feet will be required in 2015 to meet expected market growth --
a 23.6 billion cubic feet or 44 percent total production increase
by 2015, or incremental annual growth of about 1.5 billion cubic
feet.
Historical data indicates that to meet that GRI production
target, the industry will have to:
- Drill 331,000 new gas wells and 239,000 oil wells.
- Discover 362 trillion cubic feet of new producing gas-well
reserves.
- Discover 46 trillion cubic feet of new producing oil-well casinghead
gas reserves.
That's a total of 408 trillion cubic feet in proved
producing gas reserves to support the production target during the
2000-2015 time frame.
This target dictates that 40 percent of the Potential
Gas Committee's year-end 2000 natural gas resource estimates of
about 1,000 trillion cubic feet will need to be converted to proved
reserves during the next 15 years.
For comparison, during the prior 16-year period from
1984 to 1999, 164,064 gas wells and 184,708 oil wells were completed.
From this drilling effort 192 trillion cubic feet of producing gas-well
gas reserves and 27 trillion cubic feet of producing oil-well casinghead
gas were proved from the resource base.
According to the report, the Rocky Mountain region
posted a significant gain in natural gas resources over the last
two years. The Rockies' resource base increased 7 percent, with
PGC's 2000 estimates of the remaining resource base totaling 125,487
billion cubic feet of gas, excluding coalbed methane.
This increase reflects the new resources added to
the Powder River, San Juan, Uinta, Paradox and Williston basins,
and the Sweetgrass Arch/Central Montana Uplift. Higher oil and gas
prices had a positive impact on drilling activity in the Rocky Mountains,
where perennially large price differentials between the Louisiana
Henry Hub and Wyoming's two hubs have decreased.
In fact, during the past winter Rockies' natural
gas prices in some cases topped those at Henry Hub.
Although higher prices have spurred activity, environmental
issues continue to hamper operators in the region.
The Fort Union coalbed methane play in the Powder
River Basin, for example, is currently severely impacted by federal
environmental impact studies and by litigation and legislation over
produced water discharge. Additional prospective lands in Utah and
Montana have been withdrawn, and lands containing an estimated one
trillion cubic feet of gas resources in the Montana Folded Belt
were affected by former President Clinton's last minute executive
orders.
Several Rocky Mountain basins have significant natural
gas resources that operators are beginning to tap. Cretaceous objectives
remain virtually undrilled in the Uinta Basin.
Activity Across America
Some of the current activity includes:
-
Coastal Oil and Gas and Dominion Energy have begun to drill
and complete sands in the Mesaverde Group and Mancos Shale within
the Natural Buttes Field of the northern Uinta Basin.
-
Phillips Petroleum and Enron Oil and Gas have also acquired
acreage positions within the Greater Natural Buttes field area,
with the intent of testing the same Upper Cretaceous objectives.
-
Questar is expanding its Uinta Basin gas pipeline system to
accommodate the increased drilling activity.
-
The San Juan Basin resource estimate increased as a result
of better than expected results from the emerging Lewis Shale
play. In February 1999 the New Mexico Oil Conservation Division
approved the drilling of as many as four wells within a standard
320-acre spacing unit of the Blanco-Mesaverde pool. The agency
also increased the vertical limits of the pool to include the
Lewis Shale. Burlington Resources has completed approximately
300 Lewis wells in the past two years.
-
Burlington's Madden Field continues to dominate activity in
Wyoming's Wind River Basin. Four wells have been completed in
the deep Madison limestone, and production from the wells is
straining the 130 million cubic feet per day capacity of the
gas processing plant at the field.
The most recent Madison completion, the Big Horn 5-6, recorded
a calculated absolute open flow of 162 million cubic feet of
gas a day from perforations at 24,706 to 24,968 feet. This well
added more than 200 feet of pay to the existing column, which
is now in excess of 1,200 feet.
-
Gas resource estimates for the Paradox Basin have more than
doubled since year-end 1998 as a result of one gas discovery
and a possible bypassed pay zone in a dry hole.
Tom Brown Inc., Burlington Resources, and Cabot Oil and Gas
currently are the principal players there, and new 2-D and 3-D
seismic data have provided more details on this emerging gas
play in which Pennsylvanian and Permian sandstones pinch out
against salt walls and salt diapers.
This large gas play covers the entire eastern one-third of the
basin and objectives lie both above and below 15,000 feet.
-
The Sweetgrass Arch and Central Montana Uplift gained about
241 billion cubic feet of gas resources, or 14 percent, since
the last report two years ago. New aeromagnetic and seismic
surveys have yielded important structural information that has
led to new discoveries in the Cretaceous Eagle Sandstone and
Jurassic Sawtooth Formation in the Bear Paw Mountains area.
-
Williston Basin resource estimates increased approximately
18 percent, or 285 billion cubic feet. Drilling on the Nesson
Anticline by Amerada Hess has shed new light on recoveries and
drainage areas from existing wells. The firm has been reentering
old Madison wells and drilling horizontal legs.
-
The country's Pacific region posted a dramatic increase in
natural gas resources, with the bulk of the jump a result of
work at the Elk Hills Field.
The PGC's year-end 2000 estimate of potential natural gas
for the Pacific area, excluding coalbed methane, was 50,799
billion cubic feet -- a whopping 64 percent jump compared to
two years ago.
The San Joaquin Basin was far and away the most productive
province, producing 207.7 billion cubic feet of associated gas
and 8.6 billion cubic feet of non-associated gas in 1999.
The latter was nearly double that for 1998, and the increase
was attributable mostly to the blowdown of the gas cap at Occidental's
Elk Hills Field.
The highlight of gas activity in the basin, however, was the
discovery of deep gas at East Lost Hills and the widely publicized
blowout and fire at the Bellevue No. 1 well.
First production from the deep gas zones came on line in early
2001 and the operator of the field estimates potential reserves
in excess of two trillion cubic feet.
- Natural gas activity in Alaska has accelerated dramatically
in the last two years, although PGC's year-end 2000 estimates
of potential natural gas for Alaska remained unchanged at 143,050
billion cubic feet, excluding coalbed methane.
The primary drivers are the huge reserves and undeveloped
resources on the Alaska North Slope.
In anticipation of moving gas from the North Slope within
five to 10 years, the larger operators are commissioning studies,
pilot plants and permitting activities.
The largest players, BP-Amoco, Phillips Alaska, ExxonMobil,
Chevron-Texaco, and Anadarko Petroleum, are targeting the 10
trillion cubic feet of known reserves and enormous volumes of
gas expected to be discovered once a market is developed and
exploration can commence.
Moving gas from the North Slope to the lower 48 states will
require gas prices in the $3 to $3.50 per million btu range,
according to the report.
Also, the gas-prone area of the Brooks Range foothills south
of Prudhoe Bay is experiencing substantial exploration activity.
Anadarko began seismic and surface studies at five gas prospects
on a 3.1 million acre tract acquired under an option from the
Arctic Slope Regional Corp.
Anadarko and its partners, Alberta Energy and BP-Amoco, will
acquire new and reprocess existing 2-D and 3-D data totaling
1,000 miles in 2001 to begin a three-year exploration program.
- The Gulf Coast region posted a decline in gas resources.
The PGC's year-end 2000 estimates of potential natural gas
resources for the Gulf Coast totaled 218,791 billion cubic feet,
down 4.3 percent from two years earlier.
The Austin Chalk trend across Texas and Louisiana, which had
been quiet until Anadarko's recent acquisition of Union Pacific
Resources, is now focused on re-entries of old wellbores in
search of additional pay zones in the Cretaceous Buda and Georgetown
formations and the Edwards Group.
Anadarko also is leading the way at the Bossier play in east
Texas, where individual wells have flowed up to 50 million cubic
feet of gas a day.
More than 20 rigs are running in the Bossier play and some
operators are attempting to push the play into northern Louisiana.
One highlight on the continental shelf in the Gulf of Mexico
is 10 successful wells, including two new field discoveries,
drilled in the Cretaceous James Lime play in the Viosca Knoll
area. Wells produce an average 15 million cubic feet of gas
a day.
Chevron is developing the 12-block Cadillac unit, which is
expected to produce up to 115 million cubic feet of gas daily.
Deepwater wildcat drilling doubled compared to the previous
reporting period just two years ago. While most of this activity
has been centered around oil resources, three gas discoveries
in northeast Mississippi Canyon will be jointly developed to
supply the proposed Canyon Express pipeline, which has a capacity
of 500 million cubic feet per day.
- The PGC's year-end 2000 estimates of potential natural gas
in the Mid-Continent region totaled 109,333 billion cubic feet,
virtually unchanged from two years ago.
The most significant activity in the region is in the Permian
Basin, where operators continue to drill horizontal wells in
the Devonian and Ordovician Ellenburger zones, where vertical
wells do not produce at commercial rates.
Horizontal wells recently have been completed in the Ordovician-age
Montoya Dolomite in Midland County, Texas, at initial rates
of 10 to 15 million cubic feet of gas a day.
- The PGC report estimates the Atlantic region's estimated potential
gas at 73,700 billion cubic feet, which is unchanged from two
years ago. The country's north central region posted estimates
of potential natural gas at 16,344 billion cubic feet, also unchanged
from the previous reporting period.
The most significant exploration activity in these regions
was centered on the Trenton-Black River gas play in southern
New York and western West Virginia. Discoveries by Colombia
Natural Resources and other companies in the Amma-Looneyville-Newton
field areas of Roane County, West Virginia, appear to follow
an anticline and syncline along the margin of the Rome Trough.
CNR's 1999 discovery well reported an initial flow rate of
50 million cubic feet of gas a day from an open-hole interval
in the Black River Group at about 10,000 feet. Following completion
the well was reportedly flowing 7.4 million cubic feet daily.
Coalbed Methane Activity
Some of the most dramatic changes in the United States
natural gas resource base came from coalbed methane plays around
the country.
Statistics indicate that coalbed methane production
in 1999 reached 1,252 billion cubic feet, or 6.6 percent of total
dry-gas production in the Lower 48 states -- a 5 percent increase
over 1998 production. Proved reserves also continued to climb, reaching
13,229 billion cubic feet in 1999, up 8.6 percent from the previous
year.
The greatest gains in coalbed methane reserves were
logged in the Powder River, Raton and Uinta basins in the Rocky
Mountains, and in the Mid-Continent area.
Some of the highlights include:
- The shallow Fort Union coalbed methane play in the Powder River
Basin, the country's hottest gas play over the past few years.
As of March, production had increased to 525 million cubic
feet of gas from more than 5,000 wells, with another 3,500 wells
shut in awaiting gathering lines, pipeline connection, electrical
service, compression capacity and/or water-discharge permits.
Regulatory impediments are hampering development.
Current total take-away pipeline capacity from the basin is
slightly over 500 million cubic feet of gas daily, but with
the completion of the Medicine Bow lateral that capacity will
increase to nearly one billion cubic feet a day.
-
Drunkards Wash Unit, the leading coalbed methane field in
the Uinta Basin, produces 260 million cubic feet of gas per
day from 470 wells that tap the coal seams of the Ferron sandstone.
The play may be expanded if J.M. Huber is successful in developing
the Cretaceous Blackhawk Formation coals in the inactive Castlegate
Field that the firm recently purchased.
-
Evergreen Resources has expanded its Vermejo and Raton coal
well program in the central Raton Basin. Output has grown to
43 million cubic feet of gas a day from 299 wells.
-
San Juan Basin coalbed methane production appears to have
begun declining, but the basin will remain the most prolific
coalbed methane province for years. Operators are infill drilling,
recompleting wells and applying other production optimization
techniques such as carbon dioxide and nitrogen injection to
enhance methane recoveries.
Several San Juan operators have received or have applied for
160-acre well spacing that appears necessary to maximize methane
recovery in some area.
The Colorado Oil and Gas Conservation Commission approved
the new spacing for BP-Amoco's 600-well infill drilling program,
which will add five billion cubic feet per well and help to
moderate the basin's production decline.
- Cumulative coalbed methane production from Alabama's Black
Warrior Basin topped one trillion cubic feet in 1999, but annual
production of 108 billion cubic feet was 15 billion cubic feet
less than the basin's peak production of 123 billion cubic feet
in 1998.
This decline wasn't unexpected, since no new coalbed methane
fields have been established in the Black Warrior Basin for
a number of years.
- The Mid-Continent region is posting some significant coalbed
methane activity. The Oklahoma Geological Survey statistics show
at least 587 coal seam completions in the state through March
2000, and the bulk of that activity was in the Hartshorne and
McAlester formation coals in the Arkoma Basin.
The Survey reports at least 377 total coal seam completions
in the basin -- and 20 of those are horizontal wells.
The latest coalbed methane development is a joint venture
of Chesapeake Energy and El Paso Energy on a 2.2 million-acre
area, where 12 wells have been completed and as many as 100
additional wells are planned for the two-year period ending
this year.
Table 1. Estimated potential natural gas resources of the United States, December 31, 2000 (mean values, billion cubic feet).
|
Resource Category/Depth
|
Probable Resources
|
+
|
Possible Resources
|
+
|
Speculative Resources
|
=
|
Total Potential Resource
|
|
Traditional Resources
|
|
|
|
|
|
|
|
|
Lower 48 States:
|
157,350
|
|
224,730
|
|
190,960
|
|
574,381
|
|
Onshore
|
12,821
|
|
65,618
|
|
90,192
|
|
168,631
|
|
Offshore
|
170,182
|
|
290,342
|
|
281,706
|
|
740,584
|
|
Total Lower 48
|
|
|
|
|
|
|
|
|
Alaska:
|
31,717
|
|
22,300
|
|
40,417
|
|
94,432
|
|
Onshore
|
5,142
|
|
19,499
|
|
74,788
|
|
99,366
|
|
Offshore
|
36,856
|
|
41,816
|
|
115,129
|
|
193,831
|
|
Total Alaska
|
207,037
|
|
332,234
|
|
397,761
|
|
935,817
|
|
Total Traditional
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Coalbed Methane
|
16,298
|
|
54,317
|
|
84,568
|
|
155,180
|
|
Total United States
|
223,335
|
|
386,551
|
|
482,329
|
|
1,090,997
|
Table 2. Potential Gas Committee statistically aggregated estimates of traditional natural gas resources, by Area, December 31, 2000 (mean values, billion cubic feet).
|
Area
|
Probable Resources
|
Possible Resources
|
Speculative Resources
|
Total Potential Resources
|
|
Atlantic
|
|
|
|
|
|
Onshore
|
28,067
|
12,684
|
43,715
|
|
|
Offshore
|
*
|
*
|
19,400
|
|
|
Area Total
|
28,067
|
12,684
|
63,135
|
103,867
|
|
North Central
|
|
|
|
|
|
Onshore
|
2,308
|
5,152
|
14,755
|
|
|
Area Total
|
2,308
|
5,152
|
14,755
|
22,216
|
|
Gulf Coast
|
|
|
|
|
|
Onshore
|
33,710
|
51,537
|
41,921
|
|
|
Offshore
|
12,695
|
54,969
|
64,489
|
|
|
Area Total
|
46,409
|
107,520
|
106,422
|
259,420
|
|
Mid-Continent
|
|
|
|
|
|
Onshore
|
43,451
|
52,344
|
28,578
|
|
|
Area Total
|
43,451
|
52,344
|
28,578
|
124,372
|
|
Rocky Mountain
|
|
|
|
|
|
Onshore
|
46,038
|
89,758
|
40,809
|
|
|
Area Total
|
46,038
|
89,758
|
40,809
|
176,606
|
|
Pacific
|
|
|
|
|
|
Onshore
|
3,802
|
13,225
|
21,180
|
|
|
Offshore
|
127
|
10,533
|
6,300
|
|
|
Area Total
|
3,928
|
23,579
|
27,480
|
55,067
|
|
TOTAL LOWER 48 STATES
|
170,182
|
290,342
|
281,706
|
740,584
|
|
Alaska
|
|
|
|
|
|
Onshore
|
31,717
|
22,300
|
40,417
|
|
|
Offshore
|
5,142
|
19,499
|
74 8
|
|
|
Area Total
|
36,856
|
41,816
|
115,129
|
193,831
|
|
SUBTOTAL UNITED STATES
|
207,037
|
332,234
|
397,761
|
935,817
|
|
Coalbed Methane†
|
16,298
|
54,317
|
84,568
|
155,180
|
|
GRAND TOTAL UNITED STATES
|
223,335
|
386,551
|
482,329
|
1,090,997
|
|
* Production has not been established; no resources identified.
|
|
† Aggregated coalbed methane estimates (from Table 66)
are arithmetically added to derive Grand Total.
|
|
Note: Totals are subject to rounding and slight differences
due to statistical aggregation of distributions.
|