Feds slash natural-gas resource estimate; production to keep rising

On January 24, 2012 — No comments

The Energy Department’s statistical arm has sharply cut its estimate of the country’s endowment of natural gas in shale formations, the type of gas commonly tapped with the controversial drilling method called hydraulic fracturing.

The estimates may embolden opponents of the drilling, dubbed “fracking,” though the federal Energy Information Administration (EIA) cautioned that resource estimates are continually revised and aren’t the main driver of prices and production rates.

EIA, in its 2012 Annual Energy Outlook, unveiled Monday, estimates that so-called unproved technically recoverable resources of U.S. shale gas are 482 trillion cubic feet, well below last year’s estimate of 827 trillion cubic feet.

The main reason is a sharp cut in the estimate of resources in the Marcellus Shale, which underlies areas in Pennsylvania, where gas production is booming, New York, West Virginia and other surrounding states.

“The decline largely reflects a decrease in the estimate for the Marcellus shale, from 410 trillion cubic feet to 141 trillion cubic feet,” states the outlook, a closely watched forecast of various U.S. energy production and consumption trends through 2035.

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