NEW YORK (THE WALL STREET JOURNAL via Dow Jones Newswires), Jun. 17, 2009
The amount of natural gas available for production in the United States has soared 58% in the past four years, driven by a drilling boom and the discovery of huge new gas fields in Texas, Louisiana and Pennsylvania, a new study says.
The report, due to be released Thursday by the nonprofit Potential Gas Committee, concludes the U.S. has more than 2,000 trillion cubic feet of natural gas still in the ground, or nearly a century's worth of production at current rates. That's a 35.4% jump over the committee's last estimate, in 2007, of 1,532 trillion cubic feet, the biggest increase in the committee's 44-year history.
The report comes as rising oil prices have again made energy a hot topic in Washington. On Wednesday, a Senate panel voted 15-8 in favor of an energy bill that would, among other things, open up new areas to offshore drilling. The House of Representatives may vote as early as next week on a new climate-change bill that would cap emissions of the gasses that contribute to climate change. The Senate must also approve the measure. The natural-gas industry has promoted gas as a more environmentally friendly, domestically produced alternative to coal and oil. Industry supporters said the new report could bolster their case by showing that the U.S. can rely more heavily on gas without running out.
"Natural gas is right now. The resource is here. The ability to develop it is here," said Chris McGill, managing director of policy analysis for the American Gas Association, an industry group.
The new study represents an authoritative confirmation of other recent estimates, including an industry-backed report last summer that concluded the U.S. could have as much as 2,247 trillion cubic feet of gas. Unlike that report, which was based on company estimates, the Potential Gas Committee's study was prepared by industry geologists who analyzed individual gas fields using seismic imagery and production data provided by gas producers. The surge in gas resources is the result of a five-year-long drilling boom spurred by high natural-gas prices, easy credit and new technologies that allowed companies to produce gas from a dense kind of rock known as shale. The first big shale formation to be discovered, the Barnett Shale near Fort Worth, Texas, is now the country's top-producing gas field, and companies have made other huge discoveries in Arkansas, Louisiana and Pennsylvania. Together, the shale fields account for roughly a third of U.S. gas resources, according to the Potential Gas Committee.
The sudden increase in supplies, combined with a drop in demand due to the recession, has led to a gas glut, pushing prices to about $4 per million British thermal units down from more than $13 per million BTUs last July.
Copyright (c) 2009 Dow Jones & Company, Inc.
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