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U.S. Gas Production: Can We Trust the Projections?

Government (EIA) forecasts suffer in credibility when compared with geologic assessments.
Fortnightly Magazine - August 2001

are realized. Over the course of history, market prices and supply of natural resources have shown instabilities - instabilities that are better captured through well-thought out scenarios than through the standard types of sensitivity analysis involving a base case.

References

American Petroleum Institute, 2001, Basic Petroleum Statistics, Washington, DC Attanasi, E. D., Gautier, D. L., and Root, D. H., 1996, Economics of undiscovered conventional oil and gas accumulations in the 1995 National Assessment of U. S. Oil and Gas Resources: Conterminous United States, USGS Open-file Report 95-75H 50p.

Energy Information Administration, 2000, Annual energy outlook 2020, 258p.

P.16

Gautier, D. L., Dolton, G. L., Takahashi, K. I., and Varnes, K. L., eds., 1996, 1995 National Assessment of United States Oil and Gas Resources - Results, Methodology, and Supporting Data: U.S. Geological Survey Digital Data Series 30, version 2 corrected.

P.17

Kusskraa, V.A. and Kuck, B. T., 2001, A long term view for unconventional gas. Annual Energy Outlook Conference, March 27, 2001, Washington DC. Minerals Management Service, 2001, Outer continental shelf petroleum assessment, 2000, Herndon, Va., 12p.

Note 4, p.16

National Petroleum Council, 1999, Natural gas, meeting the challenges of the Nation's growing natural gas demand, Washington, vol. 1 Summary Report. 96p.

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Nehring, R., 2001, The Gulf of Mexico: Rising star or over the hill? Annual Energy Outlook 2001 Conference, March 27, 2001, Washington DC

P.16 Root, D. H., Attanasi, E. D., Mast, R. F, and Gautier, D. L., 1997, Estimates of inferred reserves for the 1995 USGS National Oil and Gas Resource Assessment, USGS Open-file Report 95-75L. 29p.

Endnotes

  1. Natural gas prices were gradually deregulated during the 1980s and early 1990s. Prior to this, Federal regulators had set well-head and pipeline prices and local regulators set retail prices. Although new natural gas electricity generating facilities were prohibited by the Natural Gas Policy Act of 1977, that provision of the Act was rescinded during the 1990s.
  2. Proved reserves are estimated quantities of oil and gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years under existing economic and operating conditions.
  3. Conventional fields consist primarily of discrete accumulations delineated by hydrocarbon/water contacts. Data for Figure 3 were provided by EIA and relate to Figure 94 in the Annual Energy Outlook 2001 (EIA, 2000).
  4. Both the EIA (2000) and the recent National Petroleum Council (NPC) study claim to use the 1995 USGS assessment as the basis for their respective forecasts of onshore production (NPC, 1999, p. 37). See Attanasi and others (1997) for the province breakdown.
  5. The Minerals Management Service recently re-assessed the undiscovered oil and gas in the Gulf of Mexico. The mean undiscovered oil was increased by 29 billion barrels of oil (Bbo) to 37 Bbo and undiscovered gas increased by 97 Tcf to 193. At well-head prices of $30 per barrel oil and $3.50 per mcf, gas about 75 percent of the gas is economic.
  6. The EIA forecast assumes no opening of any offshore area where exploration is currently prohibited.

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