Chris McGill Natural gas supply in the United States

Nearly two years ago, in the early stages of emerging developments with respect to natural gas supply in the United States, I wrote an AGA energy analysis, “U.S. Natural Gas Supply: Then There Was Abundance.” In fact, the notion that estimates of domestic natural gas resources made a decade ago are being significantly surpassed given developments in extraction technologies, today, is universally acknowledged. However, as with any new idea or development open to public scrutiny, debate on the topic brings supporters and detractors – that is how it works.

I feel the need to mention this because the New York Times has published a series of articles authored by Ian Urbina over the past several months critical of natural gas, which have resulted in the back and forth of public debate. Even other NYT editorials from sources such as Times editor Arthur Brisbane have questioned Mr. Urbina’s articles.

Predictably, gas industry representatives such as Aubrey McClendon, CEO of Chesapeake Energy, have also written a response to one of Mr. Urbina’s earlier articles that I would encourage you to read.

With that said, it seems that Mr. Urbina has a bone to pick with natural gas and Marcellus shale (in general) and continues to do so. In his latest article, rather than reporting that the United States Geological Survey (USGS) technically recoverable resource estimate for the Marcellus went from 2 Tcf to 84 Tcf with billions of barrels of liquids, he compares it to another resource evaluation (apples to oranges) and promotes the idea of a huge cut. An interesting perspective to offer. I’m including some slides with this post to give an accurate picture of how domestic natural gas supply has increased.

In addition, does it really matter that the resource estimate for  Marcellus shale is 54 Tcf, 84 Tcf or 184 Tcf. The answer is no. Resource assessments are going to change and evolve with time, and are only part of a total resource base for the country that has grown more than 80 percent since 1990. In addition, the new Marcellus shale estimate published by the USGS will have virtually no impact on how companies evaluate their current activities.

It will change some of the outputs of the EIA model in out years – but are we trying to say that the EIA modeling outlook is irrevocably accurate. Of course not! EIA outlooks serve as a starting place for our evaluation of the market (and thank goodness for them) but they change with the tide of events.

Mr. Urbina is once again taking a stance to minimize the importance of market area gas supply and all of the benefits it brings to consumers and communities. The challenges with that opportunity still need to be dealt with, also, and the best way to do that is through meaningful discussion. Mr. Urbina’s take on the announcement does nothing to advance the crucial elements of the discussion.

I know AGA has reached out to Mr. Urbina to meet with him about his articles. We’d like to discuss the current natural gas supply situation with him or at least give him a different perspective than the one he currently seems to be following. We’d welcome a meaningful discussion on natural gas.

I’m told that invitation was refused.

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