Now, fast forward:Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States.But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.
In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.
US natural gas reserves reached record levels in 2011 as producers found and produced more gas than was consumed, the American Gas Association said. Quantities estimated to exist as a result of drilling and completing wells reached 300 tcf, AGA said in its preliminary findings.The American Gas Association estimates US natural gas reserves reached 300 tcf in 2011.
“This ‘on-the-shelf’ inventory is the foundation, along with growing national resource estimates, that may point to as much as a 100-year gas supply in America,” AGA Pres. Dave McCurdy said on Apr. 4. “This abundance is helping to reduce prices and increase stability for our customers and also ensuring that that natural gas is America’s domestic, clean foundation fuel for now and into the future.”
The combination of reserves information and resource assessments places that future supply at 2,100 tcf or greater, according to AGA. This represents about 100 years’ of supply at current gas production rates of 22-23 tcf/year, it said.
This is not an investment site, so I won't get into the economics of natural gas, but will focus on the NY Times argument that the oil and gas industry is overstating the abundance of natural gas in the US.