U.S. Gas Production: Can We Trust the Projections?
shows the trends in average, annual gas well productivity for the entire United States, and for Texas and Oklahoma individually. Texas and Oklahoma, taken together, account for about one-half of the onshore conterminous U.S. (lower-48) gas production. During the last decade, with full deregulation, average U.S. gas well productivity has stabilized at just over 50 million cubic feet a year (MMcf/yr/well). The obvious long-term decline in annual productivity of operating wells imposes a severe constraint to large production increases in mature producing areas.
Proved Reserves: Where Credibility Suffers
The credibility of EIA's production forecast suffers when compared to established geologic assessments of gas resources. Figure 3 shows components of EIA's U.S. gas production forecast by gas source. Specifically, it shows gas production from (1) onshore conventional 3 lower-48 gas fields, (2) onshore unconventional lower-48 gas accumulations, (3) offshore gas fields, and (4) associated/dissolved gas produced in oil fields (onshore and offshore). Onshore conventional gas represents the largest projected increase of any source; it grows from 6.6 trillion cubic feet per year (Tcf/yr) in 1999 to 11.4 Tcf/yr in 2020. Gas production from unconventional gas and offshore gas fields is said to increase from 4.4 to 8.5 Tcf/yr and 4.5 to 6.2 Tcf/yr, respectively.
Consider the projection for onshore, lower-48 conventional gas production from gas fields (that is, conventional non-associated gas). For purposes of this analysis, the 1999 reserve-to-production ratio (10.6 to 1) for this gas source is assumed during the 2000-2020 time period. For this time period, total forecasted production (Figure 3) from lower-48 onshore conventional gas fields amounted to about 186 Tcf of gas. So, just to keep proved reserves from declining, at least 186 Tcf must be added to proved reserves during that period. However, to support the production increase from 6.6 Tcf/yr to 11.4 Tcf/yr, proved reserves in 2020 must also increase by about 50 Tcf from 1999 levels. Accordingly, the forecast implies that 236 Tcf must be added to proved reserves in conventional fields in the onshore lower-48 by the end of 2020.
The U.S. Geological Survey (USGS) assessment of undiscovered conventional technically recoverable gas is presented in terms of probability distributions (Gautier and others, 1996). 4At the mean, the conterminous U.S. conventional undiscovered onshore non-associated gas is 142 Tcf. At the low probability end, with less than 1/20 chance of being exceeded, the estimate is 172 Tcf. Based on the 1995 USGS National Assessment (Root and others, 1996), reserve additions for gas in gas fields for the lower 48 from field growth for 2000 to 2020 are projected to be 85 Tcf. So, at the mean estimate of onshore, undiscovered gas in the lower 48, the EIA forecast exceeds available resources by 9 Tcf. Even at the high resource estimate, EIA's forecast implies almost 90 percent of the undiscovered gas in onshore conventional gas fields, regardless of cost, is found and added to reserves during the next 20 years.
Evaluating the Forecast: Implausible on Its Own Terms
The EIA production forecast falls in the middle of projections by commercial forecasters and trade group forecasts (EIA, 2000,