Recently, there has developed an aura of optimism around the recognition that the United States and North America, in general, hold an abundant and diverse resource of natural gas – one that may be an important part of a future lower-carbon domestic energy economy. Announcements of new assessments reflecting strong growth in natural gas resource potential have come from numerous groups including the Potential Gas Committee (Colorado School of Mines) and have been exciting news for policy makers seeking homegrown and secure solutions to our energy puzzle.
With optimism comes naysayers and thank goodness for them all. Contrary views cause us to examine our core beliefs and offer an opportunity to explain them in language citizens and policy makers can understand. For example, the Potential Gas Committee (PGC) noted in June that their most recent view of natural gas future supply in the United States exceeded 2,000 trillion cubic feet (tcf), including proved reserves (published by the Energy Information Administration). The assessment is the largest ever published by the group and founded on current technology and foreseeable economics and, in addition, comes from a non-political spectrum of experts that actually work in the areas they are evaluating.
The PGC as a group has been assessing natural gas resources for over 40 years. Much of the resource optimism is centered on onshore natural gas shales and comes because technology has allowed these low porosity, low permeability, unconventional reservoirs to be produced. The committee does not say how and when the resources will be developed but offers a snapshot of potential based on their knowledge and expertise.
Regarding the shales specifically, they become an easy target for naysayers that believe the resource potential is not real and that their productive characteristics cannot meet the future attributed to the resource optimism. So, what is true? Something between naysayer and optimist perhaps?
The problem with arguing these points based on current decline curves, innate biases or even the most objective opinion is that they miss the point of resource development in this country. The fact is that more natural gas has been produced in the United States during the past forty years at a lower cost than any person could have imagined. It has occurred because of new resource plays, evolving technology to extract the gas, changes in energy economics and most importantly – new ideas.
Focusing on a single element of the resource story is dangerous and it is inherently self-limiting. Natural gas abundance in North America is predicated on diversity – not a single resource element. To meet its full potential in our energy economy, natural gas needs to be developed responsibly from onshore conventional and unconventional reservoirs (including shales, tight sands and coal seams). Creating infrastructure to bring arctic gas to lower-48 markets is also crucial and continuing to develop offshore gas supplies responsibly must be a part of our energy future.
Shales are a part of that future but only one element of the whole. To say that shales or coal seams or any other source of natural gas will not meet current expectations is as speculative as the opposite bookend that shapes these arguments. Those arguments will be resolved with time but one fundamental remains.
The outlook for natural gas future supply in the United States has grown with time not precipitously declined. Sources of gas have been broadened and a partnership between private investment, government and creative ideas have prevailed and will continue to prevail as the primary factors responsible for delivering a low-carbon fuel to our homes, industries and businesses.