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January 6th, 2012:

Natural Gas Reserves Are Again Being Questioned

American Energy Coalition - January 6th, 2012

The Natural Gas Industry's claim that shale plays hold a 100 years supply is being question again, this time in an article from Future Tense published by Slate.com. The article says that claims of a 100-year supply are overstated. "Assuming that the United States continues to use about 24 trillion cubic feet per year, then, only an 11-year supply of natural gas is certain," according to the Slate article. "The other 89 years' worth has not yet been shown to exist or to be recoverable.

The 100 year estimate includes Proved, Probable, Possible and Speculative estimates according to the story. In addition, calculations use the current consumption rate of 24 trillion cubic feet of gas per year, and does not account for increased consumption expected for uses like electric generation or transportation fuel. The article also calls into question the profitability of drilling activities given the current low cost of natural gas.

The claimed lifetime productivity, or estimated ultimate recovery of individual wells is also overstated, according to the article. The production decline curves modeled by well operators predict that production will fall steeply at first, followed by a long, flattened tail of production. The authors analysis found a better fit with a model in which production falls steeply for th first 10 to 15 months, followed by a more weakly hyperbolic decline. Shale gas wells typically pay out over one half their total lifetime production in the first year. So operators must keep drilling continuously to maintain a flat rate of overall production.

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