Determinants Of The Potential Supply Of Natural Gas

American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. This paper was prepared for the Regional Gas Technology Symposium of the Society of Petroleum Engineers of AIME, to be held in Omaha, Neb., Sept. 12–13, 1968. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made. Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines. Abstract A number of predictions of need for a substantial increase in the supply of natural gas by 1980 inevitably lead to consideration of the basic determinants of available future supply. The Potential Gas Committee considers broad economic and technologic determinants in its definition of potential supply. Its estimate is based on a fair but reasonable price and normal improvements in technology. The ability of natural gas to compete with other forms of energy at the market place is therefore one of the ultimate determinants of the potential supply of natural gas. Another is the producers' willingness to enter into the producers' willingness to enter into the hazardous search for and development of sufficient gas supply at prevailing costs and wellhead prices. Hence the estimate is elastic and subject to revision as determinants change. Other factors, although exerting influence on the potential supply, are more important potential supply, are more important in determining rate at which new supply is made available. According to the Potential Gas Committee's estimates, the potential supply of natural gas should not cause concern from 1968–80. The Committee makes no predictions in regard to the rate at which the potential supply will be developed and produced, perhaps the most important factor. The annual average rate of additions to new supply has been only 19.7 Tcf for the past 12 years. There seems to be no compelling reason for its increase. An increase to an average of at least 23 Tcf per year is necessary simply to supply forecasted need for at least 300 Tcf during the period. And this quantity only meets increasing requirements. If a reserve life index of 15 years is to be maintained, the rate must be considerably higher.