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SPE/DOE 8921 SPETHE NEED AND URGENCY FOR UNCONVENTIONAL GAS

by Vella A. Kuuskraa, Lewin &Assocs., Inc.

Copyright 1980, Society of Petroleum EngineersThis paper was presented at the 1980 SPE/!?OE S ~ m p o s i u m on Unconventional Gas Recovery held in Pittsburgh, Pennsylvania, May 1821, 1980. The material is subject tocorrection by the author. Permission to copy IS restricted to an abstract of not more than 300 words. Write: 6200 N. Central Expwy., Dallas, Texas 75206

INTRODUCTION

Despite th e nation's preoccupation with oi l , th ecolorful, turbulent history of coal and th e controversysurrounding nuclear energy, neither oi l , coal or nuclear is now th e dominant U.S. energy source--sinceth e mid-1970's th e largest domestic energy source ha sbeen natural gas.In th e past year, the nation consumed nearly 80quads (quadril l ion or 1015 BTUs) of energy with domest ical ly produced natural gas providing approximately19 quads (19 Tcf). In comparison, domestic o i l production was 18 quads (3 bil l ion barrels), coal production was 14 quads (600 million tons) and nuclearenergy in th e form of electr ici ty was 3 quads (250million kilowatt-hours).Natural gas issti tute for o il andsource than coal orindustr ial heating.supplies of naturalth e U.S. dependencehelp th e balance of

an economically preferable sub-an environmentally more acceptablenuclear for many uses, such asFurther, increased domesticgas could reduce imports, lessenon foreign energy sources, andpayments.The current constraint on natural gas usage isno longer stimulating demand bu t rather obtaining sufficient supply. Even though several early warningswere sounded in the 1960's and early 1970's, predictingcurtailments of gas, these warnings were muted by econometric studies that forecast massive additions ofnatural gas i f only prices were slightly increased.Recent detailed geological studies, decliningfinding rates and the limited additions of new suppliesin response to sharply higher prices corroborate th econclusion that th e geological limits of th e domesticconventional natural gas resource base are beingreached and that future production from this sourcewill decline.The most promising hope for future additions tonatural gas supplies is from th e nontraditional sourcessuch as frontier (offshore and arctic) areas, deepdri l l ing, imports, and unconventional gas. This paperwill discuss each of these future supply sources.

and 11 at end of paper.9

THE DEMAND FOR ENERGYEven with conservation and improved end-useefficiencies energy consumption is expected to increase from 78 quads in 1978 to about 100 quads by1990. The changes in U.S. energy demand by sector,or market, ar e projected in Fig. 1.The demand fo r natural gas is supply l imited, withindustr ial firms deterred from i ts use by fear of curtailments and electr ical uti l i t ies deterred by law.Assuming adequate supplies were available, th e AmericaGas Association (AGA) and several demand models project an unconstrained gas demand of 25 to 30 quads(o r Tcf), Thus, th e cri t ical issue fo r natural gasis supply and how i t can be increased from domesticsources.

ESTIMATING FUTURE SUPPLIES OF NATURAL GASThree types of estimating techniques dominateany future projections of natural gas supplies-tradit ional, advocacy, and disaggregate analysis.1. Traditional. The tradit ional approach toestimating energy supplies rel ies on econometric models, finding rates and an aggregate resource base,generally the l a tes t official USGS study. The currentvalidi ty of these techniques, however, is doubtful,given; (a) th e fiasco resulting from th e use of econometriI models for th e Project Independence Study in1975; (b) th e dramatic recent changes that have takenplace in th e estimates of th e 10wer-48 resource

lFederal Energy Administration, Project IndependenceReport (Washington, D.C., November 1974). In their$16.50 pe r barrel (1979$) and accelerated developmentcase, th e Project Independence Study Group estimateddomest.ic oil production would increase in 1985 to 18million barrels pe r day and domestic natural gasproduction would be 24 Tcf per year and l imited bydemand.

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THE NEED AND URGENCY FOR UNCONVENTIONAL GASbase2; and, (c) th e inabili ty of "hindcasting" modelsto properly incorporate new geologic areas (e.g. ,offshore, deep gas) or unconventional resources.

The gas resource base used by tradit ionalis ts is(beyond th e API proved reserves), th e USGS 1976 est imate of 600 Tcf inferred plus undiscovered recoverable reserves. The.models in Fig. 2 project th efuture supplies and sources of gas.2. Advocacy. A second set of projections are

provided by advocacy groups such as industr ial organizations and gas research inst i tutes. While advocacygroups serve a valuable role and often provide information more timely than th e t radi t ional ists, th e underlying assumptions in their forecasts must always beclosely examined. Generally, the advocates use astheir resource base the estimates of th e Potent ial GasCommittee that over 1,000 Tcf of recoverable gas remains undiscovered, in addition to a proved and inferre d reserves base of 400 Tcf. 4 The problem with th eadvocacy group studies has been that few of th e forecast increases in gas supplies have materialized de spite five to ten fold real increases in gas prices. 5Two of th e most thoughtful of th e advocacy forecasts are those of AGA and th e Gas Research Inst i tute 's

"Gas Option." (See Fig. 3)3. Disaggregate Analysis. While th e two previousmethods of forecasting seek to find sta t is t ica l curvesthat describe production from an aggregate naturalgas reserve base, a third set of forecasters rejectthe notion of a single, uniform resource base andquestion the value of trend l ine forecasts during majorchanges in prices, technology and the nature of th eresource target . These forecasters rely heavily ondetailed basin and reservoir data and geologicalassessments. They diss.aggregate th e resource into th evarious gas sources and use engineering models to determine price and technology elast ic i t ies . Becauseof th e massive data bases and th e range of engineeringand economic talent that must be assembled in makingsuch forecasts, few such efforts have been attempted.The recent work by the National Petroleum Council onunconventional gas6 and th e level of detail in Shell

2In 1976, th e USGS issued i ts report, USGS Circular725, that more than halved previous estimates of th edomestic undiscovered natural gas resource base.Special U.'S.G.S. studies of th e offshore and selectedonshore basins, conducted in 1978-79, further reducedth e estimates of undiscovered natural gas.3USGC Circular 725, op. ci t .4The Potential Gas Committee ha s repeatedly projectedan undiscovered, recoverable natural gas reserve of1,000 Tcf. However, th e PGC ha s continually had toexpand th e geological base, by including deep watersand deeper horizons, to maintain i ts estimates. SeeReport of th e Potential Gas Committee, 1979.5New contract prices for intrastate and interstatenatural gas in 1969 were $0.20 and 0.26 pe r Mcf respectively. After adjusting fo r inflation, they wouldaverage about $0.45 per Mcf (i n 1979 dollars) . Gasprices a t th e star t of 1980 were between $2.00 and$4.00 pe r Mcf depending on applicable regulations.

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Oil 's recent supply forecasts are examples of disaggregated forecasts. 7A DISAGGREGATE FORECAST OF FUTURE NATURAL GAS SUPPLIES

The following forecast of natural gas supplies andth e review of future unconventional gas sources isbased largely on such a disaggregate geological andengineering approach.1. Convent'ional Domestic Natural Gas Supplies

a. Lower 481) Existing Reserves. At th e end of 1978,th e lower 48 proved reserves were 174 Tcf and werebeing produced at a production to reserves (P/R) ratioof 1 -to 10 . With this proved reserves resource baseand assuming a continuing 1 to 10 P/R rat io, i t isrelatively straightforward to project historic production from existing reserves to th e year 2000. (SeeFig. 4)2) Inferred Reserves. The development ofa natural gas field, by extension dril l ing and improvements in recovery efficiency, lead to adjustmentsin th e size of th e existing gas reserve. An examina

t ion and projection of this growth in gas reservesleads to th e following estimates of gas productionfrom inferred reserves. (See Fig. 5)Ultimately 80 Tcf are anticipated to be added tolower 48 proved gas reserves by future development ofalready discovered f ields.3) 'New Discoveries. A major paradox exists inprojecting new discoveries of natural gas. On onehand are th e large undiscovered reserve estimates ofth e USGS and th e Potential Gas Committee that project400 to 1,000 Tcf of undiscovered recoverable naturalgas. On th e other hand, actual new discoveries duringth e pas't years h ~ v e been low, despite four-fold in

creases in prices, as shown in Fig. 6.The problem is not the amount of explorationdri l l ing. The 1978 rate is four times that a t th es ta r t of th e decade, as shown on Figure I - I . Themajor problem is that th e productivity of exploratorydrilling has declined severely. New reserve additionspe r well have dropped from 4 Bcf pe r year in 1970 to1 Bcf per well in 1978, as shown on Figure 1-2.

Even af ter allowing fo r th e growth of new discoveries through subsequent development dri l l ing, onlyone half of th e yearly production is being replaced.

6At th e end of 1979, the National Petroleum Councilwas completing a detailed geological/engineeringcosting assessment of gas supplies from four unconventional sources - - t ight gas, Devonian shales,methane from coal seams, and geopressured aquifers.70ne of th e companies that has been in th e forefrontof detailed energy forecasts has been Shell Oil withi ts National Energy Outlook series. In 1978, theyprojected domestically produced gas supplies coulddecline to 15 Tcf per year by 1990, counter to muchrosier forecasts provided by th e bulk of the industry.

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V.A. KuuskraaGiven the recent reduced estimates of the convent ional natural gas resource base, th e l imited gasrecovery response to a tenfold price r ise and a fourfold increase in drilling during the 1970's, and th econtinuing decline in exploratory dril l ing productivi ty, expectations of major gas supplies from new discoveries must be tempered. At best, th e average yearlyrate of new gas additions wil l stabi l ize at th e 1978levels. Less optimistically, new gas discoveries willfollow th e historically declining pattern. These twooutcomes fo r new discoveries are shown on Figure 1-3.These new discovereis will grow by subsequentdevelopment dri l l ing, similar to development growthof already discovered fields (through inferred reserves), as shown on Figure 1-4. However, given thatth e new discoveries have been low, th e base fo r subsequent development dril l ing is also limited. Theestimates of future gas production from new discoveries

is shown in Fig. 7.b. Alaska. Currently, 26 Tcf of natural gas arein Prudhoe Bay and other smaller Alaskan reservoirs.Domestic use of this gas awaits the construction of amajor, 4,000 mile pipeline. Assuming that th e pipel ine is buil t by 1990, a t th e currently planned 2.2Bcf pe r day capacity, less than 1 Tcf per year would

be available in th e 1990-2000 period. However, th emassive capital costs involved in th e project, est i-mated a t $15 to $20 bil l ion dollars, dictate a highdelivery cost, estimated a t $10.00 or more pe r Mcf.This would make Alaska gas uneconomic unlessrolled in with other lower priced gas and raises concerns as to who would bear th e burdens of this highercost gas. (A pipeline combining Alaskan gas withnatural gas from th e Canadian Mackenzie Delta/BeaufortSea could lower these costs and expedite th e availabil i ty of supplies from both sources). I t is no tlikely that these concerns can be resolved in sufficient time to meet th e current 1984 deadline. Assumin g th e U.S. is willing to subsidize this energysource, Alaskan gas could reach U.S. markets by 1990,

as shown in Fig. 8.c. Deep Gas. Considerable publicity has beengiven to the prospects of massive new gas suppliesfrom formations below 15,000 feet . These estimatesinclude 200 Tcf of recoverable reserves by th e Poten

t i a l GasCommittee; 80 Tcf in th e Deep Andarko Basin(Oklahoma) alone. However, with 600 gas wells a yearalready being dril led to this depth, deep gas isessentially jus t a more challenging conventional target and ha s been included in th e conventional gas reserves, estimated in Fig. 8.The gas potential in horizons below 20,000 feet ,labeled ultra and super deep, is s t i l l too speculativefo r inclusion in th e projections.2. N,.t-l1,.,.l GasThree sources of natural gas augment domesticsupplies. These are: overland gas imports fromMexico and Canada and overseas gas imports of LNG.a. Mexican Gas Imports. The U.S. euphoria overth e increasingly large hydrocarbon reserves of Mexico,reported to be over 200 bill ion barrels of o il equivalent hydrocarbons, is no t just i f ied. Such largeprojections are no t proven reserves. Rather, theyshould be classif ied as speculative anticipations andappear to be based on optimistic volumetric ca1cu-

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lat ions.Clearly, Mexico ha s a large amount of oil and gas.The estimates, in early 1979, placed the proved reserves a t 34 bil l ion barrels of o il and 35 Tcf of gas.However, i t is not a t a l l certain whether th e U.S. wi1ever obtain access to more than a small fraction ofth e gas reserves. The Mexicans are converting theirown industry to gas, th e Mexican economy and populat ion are growing, with a target economic growth rateof 7%, and, internal demand fo r gas is increasingrapidly. The newer prospects appear to be less gasprone (lower gas/oil ratios) and th e current development schedule is straining internal capacity. Mexicohas also stated that poli t ical and internal economicdecisions rather than th e size of th e resource basewil l dominate decisions on exports. I t may well bethat th e current 300 MMcf per day (0.1 Tcf per year)

is th e most th e U.S. wil l be allowed to import fromMexico.Projections fo r future natural gas imports fromMexico range from th e current, essential ly t r ivia llevels, to a maximum based on Mexico's productivecapacity and underlying reserves. However, evenassuming highly successful exploration, less than 1Tcf pe r year would be available in 1990 and internal

demand would consume a l l available Mexican gas by th eyear 2000. (See Fig. 9)b. Canadian Gas Imports. Canada currently ex ports about 1 Tcf annually to the U.S. and appearsto have th e capacity to remain th e U.S. 's largestsource fo r gas imports. With th e additional exportsauthorized in late 1979 and early 1980, gas exportswould r ise slightly above this level through th e mid-1980's. After that , unless new authorization is obtained and resources are committed, exports ar escheduled to drop precipitously.From a geological and resource perspective, Canadahas th e potential for becoming a major natural gasproducer, primarily from i ts Frontier areas (Mackenzie

Delta, Arctic Islands and East Coast Offshore) andfrom i ts unconventional gas (the t ight gas sands ofth e Deep Basin). How much of this gas wil l be madeavailable to th e U.S. is uncertain and subject tonumerous internal Canadian poli t ical decisions. Theprojections of gas imports from Canada would thusrange from th e currently authorized levels, as supplemented a t th e end of 1979, to th e ful l technicalpotential , as shown in Fig. 10 .c. Liquified Natural Gas (LNG). While th e U.S.already has supply agreements that provide 0.4 Tcfper year of LNG imports, th e capacity to substantiallyincrease this amount is l imited. The inaction by th eU.S. government on LNG ha s led the bulk of th e available gas reserves to be committed to European andJapanese markets. The remainder of th e gas reservesare in highly uncertain areas fo r long term imports(Iran and th e Soviet Union) or in geographically distant areas.Using th e recent LNG report by th e OfficeofTechnology Assessment as the primary source document,projections of U.S. LNG imports are shown in Fig. 11.3. Summary of Conventional Gas Sources andImports.The range of supply estimates for each convention

a l source of gas provides a useful boundary of antici-

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THE NEED AND URGENCY FOR UNCONVENTIONAL GASpated outcomes, shown as th e Low Case and High Case onFig. 12. While prudent contingency planning for futureenergy supplies should heavily weight the projectionsof th e Low Case, th e likely outcome is somewhere be tween th e Low and High Cases, labeled th e Most LikelyCase on Fig. 12.

Numerous assumptions and judgments, relevant toth e natural gas situation in early 1980, are the basisfo r this Most Likely Case estimate. For example, th ecurrent U.S. policies give low priority to securingLNG imports while European and Japanese countries areaggressively signing long-term commitments. This dictates that, unless conditions change, future LNG imports will be closer to the Low rather than th e HighCase. A tabulation of th e potential sources shows:

o In 1990, domestic conventional gas production and imports would range from 12 to 17Tcf with a Most Likely Case estimating 16Tcf.o In 2000, these sources of natural gas havedeclined to a range of 9 to 15 Tcf, with aMost Likely Case estimate of 12 Tcf.Even under th e best conditions, conventio.na1

natural gas supplies will fa l l far short of potentialgas demand. Filling as much of this gap as possiblewill depend on th e promise and timeliness of the unconventional and synthetic sources of gas.4. Synthetic/Unconventional Sources of Gas

Two sources of gas have th e potential fo r appreciably closing the gap between demand and conventionalsupplies of natural gas; these are, synthetic gasfrom coal (or shale) and unconventional gas.The technology fo r synthesizing gas exists,although i t is unproven, l imited and costly. Themajor technical challenge is to develop a pressurized,

intrained-bed gasifier that can produce syntheticgas from th e ful l range of U.S. coals. The majorinst i tut ional challenge is to manage th e massive scaleintroduction of medium (and possibly low) BTU gas asa substitute in th e industrial sector fo r pipelinequality gas,Unconventional gas is currently produced fromth e higher quality t ight gas and Devonian shale de postts, providing about 0. 9 Tcf per year. However,th e gas recovery technology is inefficient and inadequate fo r unlocking th e vast bulk of th e more diff i-cult , lower grade resource. The technical challengesvary- by type of unconventional resource. Howevereach type requires improvements in understanding th eresource and i ts controlling characteristics and each

type requires significant advances in well comp1etiodand stimulation technology.To a major extent, th e size of th e gas potentialfrom synthetic and unconventional sources is dependent on how rapidly the technologies develop. Giventh e l1J1perfect:i:ons in th e R&D marketplaces and th e

l m i t e d _ c a p a c ~ t y of th e price mechanism to influencen e a r ~ t e r m private R&D investments in synthetic andunconventional gas technology, Federal incentives forR&D (like in Canada) or direct Federal investment inR&D will be required.

The Federal government has been reluctant to

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establish incentives :eor technology or to make thenecessary investment in R&D. For example, th e unconventional gas program is only partly funded and th ethrust of th e proposed Energy Security Corporation ison building plants rather than on investing in futuretechnology.Because of this , major uncertainties and a widerange of outcomes characterize th e potential of thesesupplementary gas s ~ u r c e s .a. Synthetic Gas

1) High BTU Gas from CoalThe pace at which synthetic gas enters the domes

t ic market will depend greatly on th e emergence andsuccess of the Synthetic Fuels Corporation. Under ahigh track of world o il prices and assuming a marketexists fo r high cost gas, total annual synthetic gasproduction from coal could be up to 0.5 Tcf by 1990and range from 1 to 2 Tcf by the year 2000. (Theproduction of SNG by reforming naptha and LPG, is anenergy inefficient conversion of an already valuablepetroleum product and is no t included in these est i-mates.) As a point of comparison, Shell and Exxonanticipate approximately 1 Tcf of synthetic gas by1990.2) Low and Medium BTU Gas from CoalLow and medium BTU gas from coal will compete ina different energy market than pipeline q u ~ l i t y gasand thus is riot considered in these supply projectionb. Unconventional Natural Gas Supplies

1) Size of the ResourceOne of the largest potential additions to U.S.natural gas supplies could be from four unconventionanatural gas sources--tight gas sands, Devonian shales

methane from coal seams, and dissolved methane ingeopressured aquifers. The estimates of gas in-placefor these four unconventional resources range widely,depending on what portions of the resource base ar eincluded, and are shown below:oo Tight Gas Sands - 400-1,000 TcfDevonian Shales - 100-2,000 Tcfo Methane from Coal Seams - 200-700 Tcfo Geopressured Aquifers - 1,000-6,000 TcfWhile this gas is costly, the geologically betterportions of th e resource are already economic and projections of future prices appear adequate to renderth e resource economic. However, this resource isconstrained much more by technology than by price and

in general, after prices reach $4.00 to $5.00 per Mcfth e supply elastici t ies with current technology be come very low. The major means for increasing supplyand converting a modest gas source into a major resource is through the introduction of advanced gasrecovery technology.2) Potential ContricutionEstimates of the contribution of unconventionalgas range widely and ar e highly dependent on assumpt ions about technology advances. The low side ofth e estimates assume a continuation of current capacity; th e high side of th e estimates assume accelera-

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V.A. Kuuskraated development and use of advanced technology, asshown in Fig. 13.SUMMARY OF TOTAL GAS SOURCES

Considerable uncertainty exists in estimatingenergy supplies in th e future. The three estimates ofconventional gas supply, th e Low, High and Most LikelyCases, are shown on Fig. 1-5. Figure 1-6 shows th e

SectorResidential/CommercialIndustrialTransportation

disaggregated sources that comprise the estimates inth e Most Likely Case. Superimposed on th e Most LikelyCase, on Figure 1-6, are th e various estimates of gassupplies from unconventional and synthetic gas. Whichof these futures will come about is dependent on howfavorable th e undri11ed unconventional geology is andwhat choices we make in,investing in th e essential gasrecovery and conversion technologies.

Annual Consumption

Conversion Losses/Adjustments18222018

19332227TOTAL Gross Energy Consumption 78Source: Department of Energy EIA, Series C1978 Annual Report to Congress

Fig. 1 - U.S. energy consumption.

101

ETA-78 Series C Exxon - 19791985 1990 1985 1990

Domestic 18.4 17.9 15.7 15.1Imported 1.9 2.0 2.0 2.6

Total 20.3 19.9 17.7 17.7Source: Department of Energy, ETA, op. cit.,

200011.32.8

14.1

Energy Outlook 1978-2000. Exxon Corporation, December, 1979.Fig. 2 - Traditional forecasts of natural gas supplies (Tcf).

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AGA GRI "Gas Opt ions"1985 2000 1985 2000

Domestic Lower 48 18.6 15.0 19.0 15.0Alaska 0.8 3.6 0.9 1.5Other

(e.g.,unconventional, 1.4 8.8 1.6 12.5synthetics, etc.)

Imports ~ 4.8 .2.:.Q. 2.:.?.TOTAL GAS SUPPLY 24.4 32.2 24.5 31.5

Source: Testimony by Dr. H. Linden before the Subcommittee onEnergy and Power, U.S. House of Representatives, June 6, 1979.

Fig. 3 - Advocacy group estimates of natural gas supply (Tcf).

Year198519902000

Yearly Production (Tcf)Onshore Offshore' Tota 17.64.31.3

1.60.90.39.25.21.6

Fig. 4 - Estimates of production from existing reserves.

Year Y e a r l ~ Production (TeF}Onshore Offshore1985 2.2 0.51990 2.8 0.52000 2.3 0.4

Total2.33.12.7

Source: Enhanced Recovery of Unconventional Gas, Volume III, Lewinand Associates, Inc. 1978 (updated in 1980).Fig. 5 - Estimates of production from inferred reserves.

Gas Prices for Lower 48New Contracts ($/Mcf) New Discoveries (Tcf)Year Intrastate Interstate Onshore OTfshore Total

1973 0.37 0.801974 0.46 1.00 1.5 0.8 2.31975 0.57 1.40 1.5 1.1 2.61976 1.42 1.60 1.1 0.4 1.51977 1.42 1.90 1.2 1.0 2.21978 1. 75 2.10 1.3 0.5 1.8Source: Ener!1X Future, op. cit.; API/AGA Blue Book, May, 1979.

Fig. 6 - Summary of natural gas prices and new discoveries for past sixyears.

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Y e a r l ~ Production (Tcf)Year Onshore Offshore

Low Hiqh Low High Low High1985 1.7 1.9 0.1 1.7 2.01990 2.3 2.8 0.2 0.6 2.5 3.42000 2.4 3.9 0.3 0.8 2.7 4.7

Source: Lewin and Associates, Inc.Fig. 7 - Estimates of production from new discoveries.

Yearly Production (Tcf)19851990 0-0.82000 1.0

Fig. 8 Estimates of production from Alaska.

Year Yearly Imports (Tcf)1985 0.1-0.51990 0 .1-0.72000 0.1

Source: Future Mexican Oi 1 and Gas Production. Lewin and Associates,Inc., 1979.

Fig. 9 - Estimates of natural gas imports from Mexico.

Year Year 1y Imports (Tcf)1985 1.2-2.01990 0.3-2.52000 0-3.0

Source: Canadian Natural Gas: A North American Energy Source, Lewinand Associates, Inc., 1980.

Fig. 10 Estimates of natural gas imports from Canada.

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1985

0 Lower 48

- Existing Reserves- Inferred Reserves- New DiscoveriesSub-Total

0 Alaska0 Imports

- Mexico- Canada- LNG Sub-Tota 10 Total Conventional Gas Supply*1990a Lower 48

- EXisting Reserves- Inferred Reserves- New Di scoveri esSub-Tota 1

198519902000

Tcf0.4-0.80.8-1.30.8- 1.8

Source: The Future of Liguified Natural Gas Imports (Draft), Officeof Techno logy Assessment , U. S. Congress, 1979Fig. 11 - Estimates of LNG imports.

Most Likely Low HighCase Case Case 1990 (continued)

0 Al aska

9.2 9.2 9. 2 0 Imports2.7 2.7 2.7

.1.:.9. .J.:2 .1.:.9. - Mexico13.9 13.6 13.9 - Canada- LNG$ub-Total

0 Total Conventional Gas Supply*0.3 0.1 0.5 20001.5 1.2 2. 0 0 Lower 48~ ..Q.! ....Q.&2.3 1.7 3.3 - Existing Reserves- Inferred Reserves

.!!. .:!i lZ. - New DiscoveriesSub-Total0 Alaska0 Imports

5.2 5.2 5.23. 3 3.3 3.3 - Mexico

2.,Q ..1.:l. .1,.,i - Canada11.5 11.0 11.9 - LNG

Sub-Total0 Total Conventional Gas Supply*

* Total domestically produced gas

Most Likely Low HighCase Case Case

0.8 0.8

0.5 0.1 0.71.5 0.3 2.5

...ld ....Q.& ...ld3.3 1.2 4.5

.!!. 11 lZ.

1.6 1.6 1.62.7 2.7 2.7

-:.Q. ...1:2 -i:2.8.3 7.0 9.01.0 1.0 1.0

0.1 0.11.5 3.0...ld ....Q.& ---.!&2.8 0.9 4.911 .2. .:!i

supplies would be approximatelyTcf hi gher in 1985-1990 when unconventional gas sources are inc 1 udeSource: Lewin and Associates, Inc.

Fig. 12 - Estimates of U.S. gas supply from conventional sources - 1985-2000. (Tcf pe r year).

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I/O.....(ij3:

t'0+->reiS-o'C..xI.&.J:;'

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4-1u~ ICIlOJ.,..jj..lOJ:>0uCIl'M0OJ:z;

4

3

2

1< : : : : : : ~ ~ - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - ' - J-..... --___ Range of Uncertainty .------- - - - - - - - - - - .

1966 1970 1975 1980 1985 1990 1995 2000IFlg. 1-3 Range of uncertainty in new discoveries. (First year new discoveries-lower 48.)

4-1U~ I..c:01-10j..l0H.,..jOJ..c:E-0(jCIl'M0OJ:z;

120

100

80

60

40

20

1980 1985 1990 1995Fig. 1-4 - Range of uncertainty in total new additions.(New discoveries and their growth-lower 48)

2000

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Hcd(l):>