Future Supply Picture
- Louisiana Proved Reserves
- Louisiana and total U.S. proved reserves of natural gas are provided in Table II for 1977 through 1987. Over the 10-year period Louisiana and U.S. proved reserves declined 37.4% and 9.7%, respectively, and Louisianan's share of U.S. reserves declined from 27.5% to 19.1%. The high decline in Louisiana reserves relative to the total U.S. is not surprising, considering the early and accelerated development of oil and gas in Louisiana and the support of this activity over the years by citizens and all levels of government in the state. This contrasts considerably with some areas of the country where the mere thought of drilling or building a refinery stirs protests.
Table II
Dry Natural Gas Proved Reserves4
(Billion Cubic Feet)
| Louisiana |
| Year |
Offshore |
OCS |
South |
North |
Total |
Total
U.S. |
LA. % U.S. |
| 1977 |
35,295 |
|
18,580 |
3,135 |
57,010 |
207,413 |
27.5% |
| 1978 |
34,767 |
|
17,755 |
3,203 |
55,725 |
208,033 |
26.8% |
| 1979 |
33,250 |
|
13,994 |
2,798 |
50,042 |
200,997 |
24.9% |
| 1980 |
31,233 |
|
13,026 |
3,076 |
47,325 |
199,021 |
23.8% |
| 1981 |
31,462 |
|
12,645 |
3,270 |
57,377 |
201,730 |
28.4% |
| 1982 |
30,203 |
|
11,801 |
2,912 |
44,916 |
201,512 |
22.3% |
| 1983 |
28,480 |
|
11,142 |
2,939 |
42,561 |
200,247 |
21.3% |
| 1984 |
28,574 |
|
10,331 |
2,494 |
41,399 |
197,436 |
21.0% |
| 1985 |
1,643 |
26,113 |
9,808 |
2,587 |
40,151 |
193,369 |
20.8% |
| 1986 |
1,312 |
25,454 |
9,103 |
2,515 |
38,384 |
191,586 |
20.0% |
| 1987 |
1,431 |
23,260 |
8,693 |
2,306 |
35,690 |
187,211 |
19.1% |
- Forecast of State Regulated Production
- Long Term Forecast
- The latest projection of state controlled gas production through the year 2030 from the Technology Assessment Division's long term model is plotted in Figure 2 along with actual production through 1988. If the 1975-88 pattern of production continues, production in the year 2000 should be in the range of 0.64 TCF. In 2030, the model indicates the production will be around 0.21 TCF.
- The model is retuned and updated periodically to accomodate changes. Significant structural changes, if any, in the industry over a 40 year period in the future cannot be anticipated by the model; therefore, the results should be interpreted in the context of these constraints. The two factors that most impact the accuracy of the model are the price of energy in real dollars and the state of technology for exploration and production. Presently the gas model is set up to be most accurate when the price of gas is in the range of $1.40 to $2.50 per thousand cubic feet in 1988 dollars. A significant step increase or decrease beyond this range in the real price of gas would cause the model to underestimate or overestimate, respectively, reproduction.
Figure 2
Louisiana Natural Gas Production,
Including Casinghead gas
DNR Long-Term Model vs Actual Data
- The model accomodates technology changes by assuming that future technology growth will be at a similar growth rate as that seen historically in Louisiana. The long term model is based on the assumption that there will not be a technological breakthrough that will significantly advance oil and gas exploration and production technology beyond historical growth rates.
- Short Term Forecast
- The short term production forecast from the Technology Assessment Division short term model is provided in Figure 3 along with historical production for 1975-88.
- In spite of low gas prices, reduced gas demand and general economic depression in the oil and gas industry, the short term production decline rate for state controlled gas production has averaged at slightly over 1/3 of the long term decline rate of 8.5% per year. Additionally, drilling activity has been extremely depressed during this period. Three items may explain this short term deviation from the long term decline rate.
Figure 3
Louisiana Natural Gas Production,
Including Casinghead Gas
Short-Term Model Forecast
- (1) Data reported to the Department of Natural Resources indicates that the amount of shut-in gas is declining. Therefore, a portion of the state's production rate is being maintained by this previously developed gas that is now going into production.
- (2) The drilling that has taken place in the last few years has brought in several larger than normal fields which has increased the average production per well slightly.
- (3) The economic down cycle of the gas industry has apparently forced many producers to take extreme measures such as selling gas below replacement costs in order to maintain cash flow in an effort to hang on until prices improve. This has resulted in much gas on gas competition in the market place.
- U.S. Resource Base
- The Potential Gas Committee, an independent group of representatives from industry, government, and academia, recently released its 1988 assessment of potential gas resources. It estimates the gas resource base at 983 TCF, which is 60 times current annual production. Of this quantity, 187 TCF is proved reserves and 796 TCF is the potential resource. Of the 796 TCF potential resource, 204 TCF is in the Gulf Coast. Excluding Alaska, the Committee classified 164 TCF as probable reserves in or near existing fields; 238 TCF as possible reserves, mostly in fields not yet found in currently producing trends; 185 TCF as speculative, mostly in currently nonproductive basins; and 90 TCF of coal seam gas.8
- Others, such as William L. Fisher who is the Director of the Bureau of Economic Geology at the University of Texas at Austin, support the prospects for an extremely large potential reserve base. Dr. Fisher states that the historical approach to exploration and development, including uniform well spacing, the pursuit of large fields, and the assumption of reservoir homogeneity has resulted in inefficient development of the ultimate oil and gas resource base, particularly that in smaller fields.
Conclusion
- Natural gas, though finite, remains a viable U.S. energy resource. As the gas bubble dwindles and supplies tighten, supply and demand will come back into balance. After that, natural gas is expected to be a reliable and dependable source of fuel for the subsequent decade. Should there be a severe winter, deliverability problems on peak demand days may resurface on discrete days over the period, but should not be an obstacle to developing natural gas - fueled cogeneration projects during the period. Certainly, with industrial cogeneration projects having typical payback periods of three to five years, cogenerators should recover all costs and realize anticipated energy savings long before gas supply becomes a problem.
- Industrial facilities that have high gas - fired process heat loads and can consume the full electrical output of a cogeneration facility should be well positioned for cogeneration, since they would be large users of natural gas with or without cogeneration. As long as electricity backed out of a utility grid by a cogenerator is gas - fired utility generation, then, the cogenerator's additional gas required to cogenerate will be less than the gas previously consumed at the utility, and overall gas demand will go down.
Go To Cited References
Return to Outlook On Availability Of Natural Gas In Louisiana
Return to Technology Assessment Division Reports
Menu
Go to Technology Assessment Division Main
Menu
Comments or questions to: techasmt@dnr.state.la.us
These web pages were designed under contract to the Department of Natural Resources
and are maintained by employees of the Department of Natural Resources. |
This page updated March 3, 2008 |