Friday, August 26, 2011
Federal geologists offer much lower estimate of natural gas available in Marcellus Shale
The U.S. Geological Survey estimates the Marcellus Shale formation underlying most of Central and Northern Appalachia has 84 trillion cubic feet of "undiscovered, technically recoverable natural gas . . . drastically lower than the 410 trillion cubic feet that was published earlier this year by the federal Energy Information Administration," Ian Urbina reports for The New York Times.
As a result of the USGS report, EIA plans to reduce its estimate by 80 percent, to match the USGS estimate. "The decision by the agency to lower the estimates comes amid growing scrutiny from Congress about how the administration calculates its numbers and why it depends on outside and industry-tied consultants to produce some of its reports," Urbina writes. "Accurate estimates are important for lawmakers who are making long-term decisions about subsidies and policies relating to the nation’s energy mix. They are also essential for landowners and investors as they decide where and whether to lease their land to drillers or invest in gas companies."
The new estimate is of resources, not reserves, which are always smaller because they are based on the ability to extract them profitably. "The geologists also did not discuss how high gas prices will have to rise before companies can make enough money to justify increased drilling," Urbina notes.