This Just In: Feds Dramatically Cut Shale Gas Estimates!
Aug 26th, 2011 | By admin | Category: Fracking, Lead Articles
This map shows the various shale gas plays, as the industry refers to the deposits, that exist throughout the United States. Now, the U.S. Geological Survey has come out with a report that says the amount of recoverable natural gas that exists in the largets, the Marcellus Shale, may be much smaller than previously thought.
To here the natural gas industry tell it, shale gas is the silver bullet that will solve all our country’s energy problems, prod the national economy back into productivity and cure the common cold, all at once.
Well, if something sounds too good to be true, it probably is, and such is the case with shale gas.
According to a story by New York Times Ian Urbina, the U.S. Geological Survey has released an estimate of the amount of natural gas contained in the Marcellus Shale play, the giant rock formation that exists deep underground beneath New York, Pennsylvania, Ohio and a couple of other state.
According to the USGS report, the Marcellus Shale formation contains about 84 trillion cubic feet of recoverable gas, far less than the 410 trillion cubic feet the federal Energy Information Administration calculated in their estimates.
From Urbina’s NYT story:
As a result, the Energy Information Administration, which is responsible for quantifying oil and gas supplies, has said it will slash its official estimate for the Marcellus Shale by nearly 80 percent, a move that is likely to generate new questions about how the agency calculates its estimates and why it was so far off in its projections.
The decision by the agency to lower the estimates comes amid growing scrutiny from Congress about how the administration calculates its numbers and why it depends on outside and industry-tied consultants to produce some of its reports.
Of course it remains to be seen if the revised numbers will have any effect on the shale gas industry, which is rapidly expanding in the Marcellus Shale play and throughout the country, but NaturalGasWatch.org readers will get an inside scoop on Sept. 12 and 13.
That’s because NaturalGasWatch.org has been named the “Official Blogger” of the Shale Gas Development Conference set for Sept. 12 and 13 in Denver, Colorado. The event is being organized by Marcus Evans, and promises those who attend an inside look at the industry, its development and its financing.
Should be fun!
Read more about it here: Shale_gas_conf_flyer.
Reserves estimates always require the assumptions. Commercial reserves require the target price $4, $5, $6, etc. one major utility was looking at NG hedges above $6 going out 20 years
Some of us remember when oil was at $15 and NG was $1 and reserves varied alot even then
Problem for NG is now appearing to be oversupply with LNG liqufier plants/terminal in Tex/LA and Oreg. because at $4 we can sell to Japan/China and eastern SAmer at competitive prices…although leaseors don’t like that but maybe it can keep the price above the $3.50….I remember $1
So what is in the reserve estimates – a lot of conventional and unconventional gases and vapors which are more for the financial peoples and corporate bottoms – I seem to remember we had multiple agencies giving AAA ratings and insurance on various bonds which weren’t quite that good.
These reserve estimates don’t even integrate the issues as to having deliverable reserves via existing NG pipelines and NGL pipelines and users….issues that make NE and California primary targets….Friends in LA are upset with low estimates but I tell them be upset with high reserves and low/declining prices and royalties checks…
Fields are not based on the USGS/EIA numbers so don’t worry be happy to get thru 2020..