This week the U.S. Geological Survey (USGS) released a report on the amount of recoverable natural gas in the Marcellus Shale (an area that runs from West Virginia north through New York). The report estimated that the shale deposit has approximately 84 trillion cubic feet of recoverable gas. In 2002 the USGS reported that amount to be only 2 trillion. That’s a pretty large increase since the last report was issued, and is likely great news for the natural gas industry, as well as the United States’ energy future.
However, there is reason to hold off some of that excitement. Reports from the U.S. Energy Information Administration (EIA) had the total available gas in the Marcellus Shale around 410 trillion cubic feet. The EIA is charged with tracking energy production, use, prices, and resources so it’s safe to assume that when the government starts to set policy, they are using data from their internal agency. It’s somewhat alarming to see that the EIA had an estimate 5 times greater than what the USGS has come up with in their most recent study, and the EIA will likely amend their data as a result.
The EIA relies on several sources, industry data being one of them, when making their projections. It’s not a stretch to assume that the natural gas industry’s numbers may be on the high side, and have skewed the EIA data when added to the rest of their calculations. Since the EIA is the federal agency charged with providing this data, which will influence policy, it’s very important that they provide reliable data.
While there is reason to be concerned with the reliability of EIA data, the USGS report is still very promising for the energy industry. Between new recovery technology and discoveries of additional resources, the 2 trillion to 84 trillion cubic foot leap since 2002 represents a lot of energy security. And though the EIA’s data remains very much in question, such a large gap between the two suggests the USGS estimates are likely a low end, conservative number. Regardless of how you look at it, we’ve got a lot of natural gas here to be recovered. More domestic natural gas means we’ll need less foreign oil or dirty coal, which is a good thing for everyone.
The full USGS report can be found here:
http://www.usgs.gov/newsroom/article.asp?ID=2893&from=rss_home
EIA Shale Gas data can be found here:
http://www.eia.gov/energy_in_brief/about_shale_gas.cfm
