Is there really 100 years’ worth of natural gas beneath the United States?
The recent press about the potential of shale gas would have you believe that America is now sitting on a 100-year supply of natural gas. It's a "game-changer."
A "golden age of gas" awaits, one in which the United States will be energy independent, even exporting gas to the rest of the world, upending our current energy-importing situation.
The data, however, tell a very different story...
...An example of how inflated initial resource claims can be, and how they can be sharply cut, presented itself in August with a new assessment of the Marcellus shale by the U.S. Geological Survey.
It offered a range of estimates, from 43 trillion cubic feet (tcf) at 95% probability, to 84 tcf at 50% probability, to 114 tcf at 5% probability. (Not surprisingly, the 95% probable estimates have proven historically to be closest to the mark.)
Only five months earlier, the EIA speculated in its Annual Energy Outlook 2011 that the Marcellus might have an "estimated technically recoverable resource base of about 400 trillion cubic feet."
The USGS reassessment had slashed the estimate for the Marcellus by 80 percent.
Similar adjustments may be ahead for other shale plays.
...I am not anti-gas; neither is Berman. What concerns him, and me, are the overblown claims about the potential for shale gas and the poor quality of both technical and financial information about its production.
We don't yet know how much of the estimated gas resources will be economically recoverable or whether the projected production rates for some wells might be off by a factor of 10.
We might have a 100-year supply of gas, or we might have an 11-year supply.
We might realize economic and environmental benefits by transitioning trucking and coal-fired power generation to natural gas, or we might do so only to find ourselves out on a limb far more economically dangerous than the current peak and impending decline of world oil supply.
We simply don't know, and we may not know for years to come.