Natural Gas Resources

Natural gas is projected to be the fastest growing component of world primary energy consumption in the EIA International Energy Outlook 2005.  Consumption of natural gas worldwide is projected to increase by an average of 2.3 percent annually from 2002 to 2025, compared with projected annual growth rates of 1.9 percent for oil consumption and 2.0 percent for coal consumption.  From 2002 to 2025, consumption of natural gas is projected to increase by almost 70 percent, from 92 trillion cubic feet to 156 trillion cubic feet. In 2004 world consumption of natural gas increased by 3.3% compared to the ten year average of 2.3%. This makes the EIA forecast sound a little conservative, but that depends on whether supplies can be developed to meet a higher demand.

Natural gas prices have gone up considerably recently and are expected to remain at or above present prices for the foreseeable future.  The EIA short term energy outlook released Oct. 12, 2005 forecasts an average U.S. residential natural gas price of $12.93 per thousand cubic feet.  This compares to $10.74 for 2004 and $9.51 for 2003.  The forecast for 2006 is $15.25.  These price increases have been exacerbated by hurricanes Katrina and Rita, reflecting the sensitivity of prices to changes in supply and the price movements required to restore a balance between supply and demand.  The report states that "Complete recovery of energy infrastructure from hurricane damage will take many months. However, considerable recovery should occur by the end of 2005."  Incidental the same report forecasts the 2006 average price of West Texas crude to be $64-$65 per barrel and the price of gasoline to be $2.45.

The following table presents some of the more pertinent data for our natural gas resources.  It gives data on reserves, production and consumption of natural gas at the end of 2004.  Beyond the first six countries listed only the countries with production above 40 billion cubic meters are listed.  The table is sorted by rank in reserves.  All data was taken from the BP Statistical Review for 2004.   Several conclusions are fairly obvious from inspection of the data (combined with some data from the complete report.)    Discussion of these conclusions follows the table.  Not shown are the worlds reserves of 179,530,000 billion cubic meters with an annual production and consumption of 2,690,000 billion cubic meters for an R/P of 67.

NATURAL GAS DATA FOR 2004

Rank	Location	Proven Re-serves	Share of Total	2004 Produc-tion	Change over 2003	Con-sump-tion	R/P ratio
		Billion  cubic meters	%	Billion cubic meters	%	Billion cubic meters
1	Russian Federation	48,000	26.70%	589.1	1.80%	402.1	81.5
2	Iran	27,500	15.30%	85.5	4.90%	87.1	321.6
3	Qatar	25,780	14.40%	39.2	6.70%	15.1	657.7
4	Saudi Arabia	6,750	3.80%	64.0	6.60%	64.0	105.5
5	United Arab Emirates	6,060	3.40%	45.8	2.20%	39.6	132.3
6	United States	5,290	2.90%	542.9	-1.20%	646.7	9.8
Other	leading producers
8	Algeria	4,550	0.90%	82.0	-1.00%	21.2	55.4
12	Turkmenistan	2,900	0.30%	54.6	-0.90%	15.5	53.1
13	Indonesia	2,560	2.50%	73.3	0.70%	33.7	34.9
14	Malaysia	2,460	1.30%	53.9	4.00%	33.2	45.7
15	Netherlands	2,390	1.40%	68.8	17.90%	43.5	21.7
16	Norway	2,390	1.40%	78.5	7.30%	4.6	30.4
17	China	2,230	0.80%	40.8	18.50%	39.0	54.7
18	Uzbekistan	1,860	1.00%	55.8	4.10%	49.3	33.3
19	Canada	1,600	1.60%	182.8	-	89.5	8.8
27	Argentina	610	0.30%	44.9	9.40%	37.9	13.5
28	United Kingdom	590	1.20%	95.9	-6.70%	98.0	6.1

The Russian Federation and the United States have the highest and same order of magnitude of production even though the Russian reserves are nine times greater than those of the U.S.

According to the detailed report, the U.S. consumption remains nearly constant over the last 10 years, being able to meet most of its demands from Canada and supplying most of Mexico's needs through exports.

Although the R/P ratio is not considered the best indicator of the remaining reserves, it serves the purpose fairly well for these purposes.  The U.S., Canada, United Kingdom and Argentina have R/P ratios that are quite low and serve as a warning that reserves are  getting critical.  Reserves of natural gas are different form those of oil, in that discoveries of natural gas continue, although many "experts" believe that we are nearing the end of this period.  Some major oil companies were forced to reduce their reserve quantities during this year. For quite some time discoveries of new reserves have managed to about equal production in the U.S. and Argentina, but have not kept pace in Canada and the U.K.  Reserves in Russia and the Arab countries are generally very large and are in no danger of depleting in the near future.

Of the countries on the table Canada, Norway, the Netherlands, Malaysia, Indonesia, Turkmenistan, Algeria, Qatar and the Russian Federation are the largest exporters and only the U.S. is a large importer.  Not shown are the large importers of Germany, Japan, France, Ukraine and Finland.  Neither India or China have significant imports, but this is expected to change in the near future with increased industrialization and the construction of new pipelines.

Exporting of natural gas by pipeline is quite common within a region.  Exporting as LNG is required to transport it from one region to another.  According to EIA the share of total U.S. natural gas consumption met by net imports of LNG is expected to grow from about 1 percent in 2002 to 15 percent (4.3 trillion cubic feet) in 2015 and 21 percent (6.4 trillion cubic feet) in 2025.  Qatar is in the process of greatly expanding its infrastructure for the exporting of LNG.  Exportation of natural gas in the form of GTL is receiving a lot of discussion, but two projects in Qatar have been delayed in favor of LNG exports.  GTL has great potential for reducing the transportation costs, as it eliminates the infrastrucure at both the loading and unloading ports and can be transported on much less expensive conventional tankers.  The cost of the processing the natural gas in the GTL process required to liquify the gas to a diesel like fuel is said to be less than the extra costs involved with LNG transportation.

International Energy Outlook 2005-Natural Gas, EIA, July 2005
BP Statistical Review of World Energy 2005, June 2005 - A free 41 page summary of this report may be ordered from the website.
Short-Term Energy Outlook, EIA, Oct. 12, 2005

Technorati tags: natural gas, fossil fuels, energy resources, energy

Comments

[Adam Reynard]

Re: News Article Columbia River Basin Natural Gas should be national news

Since we are talking about potential of 200-300 Trillion Cubic Feet of natural gas and the ANNUAL U.S. usage of natural gas is about 23 Trillion Cubic Feet you would think there would be more news coverage. I've heard that Encana the operator is trying to keep tight wraps on this. Not sure why. Delta Petroleum has been very open. Delta Petroleum has 20% of the play. Their website is here: http://www.deltapetro.com

Target: Columbia River Basin (“CRB”) Washington State - The largest unexplored onshore basin in the United States

News:

Headline in the Yakima Herald Republic Friday August 18, 2006

Sitting On a Gold Mine?

Columbia Basin could hold huge natural gas reserves

by Leah Beth Ward

A Denver-based petroleum company with significant mineral rights in the Columbia Basin says drilling results so far at an exploratory well near Mattawa indicate the region could hold significant reserves of natural gas.

"There are many different estimates out there, but the reality of the situation is this basin, in all likelihood, represents the possibility of being able to prove up in the tens of Tcfs (trillion cubic feet)reserves if not possibly in the hundreds of Tcfs reserves," Roger Parket, chief executive officer of Delta Petroleum said Wednesday at an annual oil and gas industry conference in Denver.

If volumes ever approach those levels, the region would rang among the most productive in the nation, alongside or exceeding such hot spots as the Jonah Field and Green River Basin in Wyoming and the Piceance Basin in Colorado.

Parker's comments were available from a replayed Internet broadcast of the conference.

The Mattawa well described by Parker was drilled by EnCana Oil & Gas USA, a Canadian company with U.S. headquarters in Denver. EnCana has leased 800,000 acres in the basin. Delta has an interest in the Mattawa well and another outside Sunnyside.

In 2002, the United States used about 22.8 Tcf of natural gas, making it one of the world's largest consumers of the fuel, according to the federal Department of Energy. A trillion cubic feet of natural gas can heat 15 million homes for one year.

Dave Donegan, Delta's spokesman, said Thursday that Parker's remarks at the conference could be characterized as cautiously optimistic.

"That's a fair assessment," he said.

Delta is not drilling in the Columbia Basin yet, but Parker said it's planning to start later this year or early next year. The company has leased the mineral rights on about 400,000 acres in the region, which state geologists say is the largest unexplored area within the United States.

Encana has completed one exploratory well, known as the Anderville Farms 1-6 well, on a private farm in the Saddle Mountains east of Mattawa and is nearing completion at a second site eight miles north of Sunnyside in the Rattlesnake Hill. A third well is planned, but company officials haven't revealed a location yet.

EnCana USA President Jeff Wojahn told analysts last month that the company plans to conduct completion studies in the third quarter of this year, with results known sometime in the fourth quarter.

Completion studies have a strict definition in the natural gas business, explained Bill Lingley, lead geologist with the state Department of Natural Resources. The well operator runs the equivalent of a pistol down the well casing and shoots holes through the metal into a potential gas zone. If a fluid forms, its likely to be gas condensate, a sign of natural gas.

The plan for completion studies means EnCana is encouraged enough to spend at least another $ 250,000 at the site, said Lingley.

"When I hear completion studies, I perk up. That means the operator is putting his money where his mouth is," he said.

Encana, as is customary in the speculative business of exploration, is not ready to call the venture a success.

Company spokeswoman Wendy Widenbeck said in a telephone interview that it will be sometime next year before it can determine the results of its exploratory program.

If the completion studies are positive, the company will seek permits for delineation wells, which are drilled away from the original location in an efforts to find out how large and prolific the field might be.

Geologists have believed for some times that the Columbia Basin is rich in hydrocarbons. In the early 1980's, a partnership of Shell and Arco hit a reservoir that showed impressive initial pressure. But drilling technology at the time made further exploration in the region's notoriously stubborn basalt layers too expensive.

Partker, the Delta CEO, referenced the Shell experience in his remarks.

"The main thing to say about the Columbia River Basin at this point in time, the geologic theory that we've all kind of operated under here for the last couple of years, and really was identified by Shell 25 years ago, has been confirmed, if you will, with another well," Parker said. Parker said, referring to the well near Mattawa.

"We believe we have encountered what we had hoped to encounter prior to drilling the well and we will be very interested to see what actual completion results are as we go into the remaining part of this year." END

Delta CEO Roger Parker speech***********************************************

http://origin.vcall.com/CustomEvent/conferences/enercom/081406/agenda.htm

Enercom 11th Annual Oil & Gas Confernce

August 16, 2006 1:15pm 15 minutes into presentation DPTR CEO Roger Parker discusses Columbia River Basin

Speech Enercom 11th Annual Oil & Gas Conference Denver August 16, 2006 1:15 pm

Delta Petroleum CEO Roger Parker Columbia River Basin drill site approximately 15 minutes into presentation.

[Alex]

Yes, The demand for natural gas is growing day by day & the development of energy resources provides jobs for many people and your report presents a new approach to assessing natural gas. But, producers should be allowed to explore areas other than above mentioned places in order to provide consumers with less expensive natural gas.

[Charles Parkingson]

This page have a lot of kinds of parkets, and they look beatifull

[bhupabhupa]

It’s a good article telling us about the Natural gas. I learned many things from this article. Thank you very much for the Information.

===========

bhupa

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[oilfield equipment]

wow the russians have alot of reserve. why is all of this needed.

[husky air compressor]

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[Invertir en oro]

I think that this post is very good, i would like to read more information about this topic.