U.S. natural gas reserves are far more plentiful than previously estimated, says an industry study being released today — a discovery that heralds a potential remedy to the energy crisis.
The report says the U.S. has up to 50% more natural gas reserves than earlier projections because of higher-than-expected yields from 22 shale formations in 20 states.
The industry says the findings should prod policymakers to provide incentives to wean the nation from $4 gasoline and move to compressed natural gas as a standard fuel in many cars and trucks.
"Everyone knows natural gas is clean and made in America," says Aubrey McLendon, chairman and CEO of Chesapeake Energy, the largest natural gas producer. "The only question was is there enough to go around to run cars and trucks. This proves that there's plenty of natural gas."
The U.S. has enough natural gas resources to last up to 118 years, or 2,247 trillion cubic feet (Tcf), says the study by Navigant Consulting for the American Clean Skies Foundation. That group is largely funded by natural gas companies.
The Potential Gas Committee, an independent research group, estimated in 2006 the U.S. has 1,530 Tcf of gas, an 82-year supply.
The increase stems from greater production in the Marcellus Shale in the Appalachians and the Haynesville Shale in Louisiana and Texas, says Kenneth Medlock, an economics professor at Rice University who worked on the Navigant study.
In recent years new drilling techniques have allowed companies to extract gas deeply embedded in formations of shale rock. The new study is based on estimates by Navigant, state records and a survey of more than 60 large natural-gas producers.
John Curtis, the committee's executive director, would not comment on the new estimates. But he questioned the new report's reliance on his group's study, which did not estimate shale reserves, to reach its higher projections.
Medlock says actual resources are likely less than the 118-year supply estimated by industry but much more than the current 82-year projection.
Oil tycoon T. Boone Pickens recently unveiled a plan to replace 20% of natural gas-fired power plants with wind energy and divert that gas to cars. But McClendon says gas is so abundant there's no need to channel it from power plants. Yet to jump-start the industry, he says, Washington must provide incentives to automakers, service stations and consumers.