Sunday, August 5, 2018

US Remains The Natural Gas King -- Oilprice -- August 5, 2018

Updates

May 3, 2019: Beetaloo Basin, Australia, could add 500 trillion cubic feet; see this post;

December 6, 2018: USGS 2018 Survey of The Permian -- 46 billion bbls of crude oil; 281 trillion cubic feet of natural gas; and 20 billion bbls of NGLs.


Original Post

30-second elevator speech when it comes to natural gas: there is so much natural gas in the world, that as a commodity, it's all about free market capitalism and governmental policies (at all levels) that will determine winners (suppliers/consumers) and losers (suppliers/consumers) for the next fifty years.

For those in the know, I doubt there is anything new here, but some nice data points for future reference.

From oilprice, the data comes from BP's annual review, 2017 data.

US natural gas production (flat over the past three years):
  • 2017: 71.1 billion cubic feet per day
  • 2016: 71.1 billion cubic feet per day
  • 2015: 71.6 billion cubic feet per day
  • accounts for 20% of world's total natural gas production
Global history:
  • until the 1980s: US dominated global natural gas production
  • 1980s: Russia took the lead
  • past 50 years: the Middle East has grown its natural gas production at a much faster rate, and is on pace to take the lead in the next decade (2020s)
US history:
  • natural gas production in decline until the fracking boom which began in the middle of the last decade (the Bakken boom began in Montana, 2000; in North Dakota, in 2007)
  • production from the US grown by an astounding 51% from 2005 to 2015 -- the years of the Bakken boom -- pushed the US back into the global lead (memo to self: note to Jane Nielson)
US exports, LNG:
  • 2017: 1.7 bcfpd; about 2.4% of US production
  • Asia Pacific: received 41% of this production
  • Mexico: received 22%
US exports, pipeline:
  • 6.3 bcfpd, or 8.9% of US daily production
  • Mexico: accounts fo 64% of the total
  • exports to Mexico are growing rapidly; last week, RBN Energy reported that exports to Mexico hit 5.0 bcfpd for the first time ever
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Reserves

So, with all that, I assumed US reserves looked huge compared to the rest of the world, but this is simply astounding.

Reserves:
  • Middle East: 2.8 quadrillion cubic feet = 2,080 trillion cubic feet (quadrillion is 10^15; trillion is 10^12)
  • US: 309 trillion cubic feet (but see below)
I've long lost the bubble on global natural gas reserves (and I'm sure the reserves are currently way under-estimated) but back in 2016, this post:
Disclaimer: I often make simple arithmetic errors. Numbers rounded. Natural gas reserves according to BP/wiki, 2013 - 2014 (US estimate as of December 2013). Top five countries:
Now, let's go back and re-run the numbers that were posted earlier:
  • that recent huge Mediterranean natural gas find: 30 trillion cubic feet
  • Barnett, revised USGS figures: 53 trillion cubic feet
  • Utica, newly revised figures: 782 trillion cubic feet
  • Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves
  • Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
  • Qatar: 800 trillion cubic feet, wiki, conversion
  • Mozambique, from the story above: 85 trillion cubic feet
That was back in 2013. Certainly we can do better.

From the 2018 BP review (2017 data), global natural gas reserves:

US natural gas reserves, February 13, 2018, EIA:
  • 341.1 trillion cubic feet; increased by 5% over 2016
  • Pennsylvania: added 6.1 tcf natural gas reserves, the largest net increase of all states in 2016 as a result of the Marcellus)
  • next largest net gains, after Pennsylvania: Oklahoma (3.7 tcf); Ohio (3.1 tcf); SCOOP, STACK, Utica
  • natural gas from shale as a percentage of total production: increased from 54% in 2015 to 62% in 2016
  • additions exceeded consumption by 30%
Discrepancies, observations, and further comments:

As noted above, the official EIA estimates for the US: 341 trillion cubic feet, but I think those numbers are "way low."

And from the numbers above, the numbers are all over the place (from the official EIA estimates to estimates by others.

Another source suggests the Marcellus-Utica could produce a quadrillion cubic feet -- which greatly exceeds current EIA estimates of total US natural gas reserves.

From NaturalGasIntel, undated but probably in 2015:
The Utica Shale is a massive formation that lies beneath portions of Ohio, West Virginia, Pennsylvania, Kentucky, Maryland, New York, Tennessee, Virginia and a part of Canada.
In a September 2012 report, the United States Geological Survey (USGS) estimated that the Utica has a recoverable potential of 940 million barrels of oil, and approximately 38 trillion cubic feet of natural gas.
That estimate, though, has proved conservative at best. With far more drill bits having proved-up the play in Ohio, a West Virginia University-led study released in mid-2015 estimated that the Utica contains more than 20 times as much technically recoverable natural gas resources than previously thought when the USGS released its report (see Shale Daily, July 14, 2015). 
20 x 38 = 760 trillion cubic feet of natural gas.

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