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New US Oil and Gas Reserve Estimates

The United States Geological Survey (USGS) released a new estimate last week on the US’s oil and gas reserves. The new estimate for 2012 is part of the Reserve-Growth Assessment Project. It found 32 billion barrels of crude oil, 291 trillion cubic feet of natural gas, and 10 billion barrels of natural gas liquids as potential undiscovered US reserves. The USGS estimate stated that these amounts represent about 10% of the overall US oil and gas endowment and do not include reserve growth estimates for federal offshore areas.

Most reserve growth results from the delineation of new reservoirs, field extensions, improved technology that enhances efficiency, and recalculation of reserves due to shifting economic and operating conditions. For this estimate, fifty-five large oil fields and thirty-five large gas fields significantly contributed to the reserve growth. Within the fifty-five oil fields, sixty-eight individual conventional accumulations (i.e. reservoirs or groups of reservoirs) were identified and assessed. In the gas fields, two accumulations were individually assessed. The sixty-eight individually assessed oil accumulations accounted for seventy percent of the potential reserve growth in the United States. The other thirty percent is from smaller accumulations estimated by the regression methods.

The estimate noted that no attempt was made to gauge economically recoverable resources, so resources such as shale gas, tight gas, tight oil, and tar sands were not included in the USGS’s study. The USGS used detailed analysis of geology and engineering practices, which departs from the methods of previous reserve growth estimates which relied entirely on statistical extrapolations of growth trends. The USGS used both public and commercial geologic information and field production data.

Director Marcia K. McNutt said, “By providing geologically based, domestically consistent estimates of the potential additions of oil and gas from the growth in reserves in known fields, and placing that information in the public domain, we are furnishing a valuable projection on how much and where fossil fuels may be produced in the future.” Director McNutt went on to say, “When combined with our estimates of undiscovered resources, policymakers can obtain a more complete picture of domestic, technically recoverable oil and gas.”

The full picture of technically recoverable oil is even brighter, with a recent study by the Institute for Energy Research putting it at 1.4 trillion barrels in the United States. The largest deposits are offshore, in Alaska and in shale in the Rocky Mountain west. This study asserted that there is enough oil to last America’s consumption for 250 years, and 175 years worth of natural gas. In terms of coal, the North American countries- the US, Canada, and Mexico- together have 497 billion short tons of recoverable coal. That coal could power the US at the present rate of consumption for 500 years, according to this study.

Looking at our energy resources in any light, it is clear that the United States has been geologically blessed with considerable resources. To those of us working in or with the oil and gas industry, this demonstrates that if the US experiences high prices or gasoline or fuel oil shortages, it is probably the result of politics rather that lack of resources.

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