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# A New Approach to Estimating Hydrocarbon Resources

### January 1995

*"As the principal Federal agency responsible for estimating the amount and distribution of hydrocarbon resources, the U.S. Geological Survey explores new methods for estimating the remaining undiscovered resources.  A new method using fractal statistics greatly facilitates our ability to independently, rapidly, and easily forecast the number and size of undiscovered conventional hydrocarbon accumulations."
Dr. Christopher Barton, U.S. Geological Survey

**The Nation needs to know about undiscovered hydrocarbon resources in order to formulate sound energy policies.**
Knowledge of the size and number of undiscovered hydrocarbon resources is necessary for strategic planning, formulating economic policies, evaluating Federal lands, and developing sound environmental policies.  The U.S. Geological Survey (USGS) is the principal Federal agency charged with responsibility for estimating undiscovered hydrocarbon resources in the United States and the world.  This work is accomplished in cooperation with many groups in Federal and State governments, academia, and industry.  In particular, USGS scientists collaborate with the Minerals Management Service (MMS) in preparation of the National Assessment of Oil and Gas Resources, and derive much of the data from industry sources and from the **Energy Information Agency** of the Department of Energy.  Related cooperative studies are conducted with various academic institutions; this study to develop a new approach for estimating conventional hydrocarbon resources has been conducted in collaboration with C.H. Scholz of the Lamont-Doherty Earth Observatory at Columbia University, New York.**In response to recommendations from the National Research Council (NRC), the USGS has developed and employed new methods for estimating undiscovered hydrocarbon resources.**
In 1990, the NRC reviewed the USGS-MMS 1989 National Assessment of Oil and Gas Resources and recommended that the USGS develop new, independent quantitative approaches for estimating hydrocarbon resources to be applied in parallel with traditional USGS geology-based methods.  Where multiple assessment methods converge in their estimates, one can have a higher degree of confidence in such estimates.  All methods are based on an assumed form of the size-frequency distribution of the natural population of oil and gas accumulations.  Over the past four decades, scientists have engaged in honest debate about the form of the distribution.  In the USGS, thinking has evolved from regarding the entire natural population as lognormal to recognizing that a fractal or power-law distribution better predicts the increasing numbers of small accumulations.**The fractal method does not assume a characteristic accumulation size.**
This new method adapts a fractal or power law to any selected population from the most specifically-defined oil and gas play to the world.  The method identifies the limit of economic perceptibility in the population of discovered accumulations, and fits a fractal distribution to the discovered accumulations larger than the economic perceptibility.  An extrapolation to smaller accumulation sizes, therefore, estimates the entire natural population.  The size and number of undiscovered accumulations below the point of economic perceptibility is the difference between the known accumulations below the point of economic perceptibility and the fractal distribution.  The method is applicable to different types of data including accumulations, fields, and reservoirs, over varying regions from plays, to petroleum provinces, to the world.**A fundamental precept of the fractal method is that data are fit above the limit of economic perceptibility.**
The limit of perceptibility is induced by economic factors, and merely appears to be the mode of a lognormal distribution, but it is not.  The rollover of size-frequency plots of discovered fields is caused by an economic perceptibility limit which in effect undersamples the population of small accumulations that are not presently economically viable. As the modes of lognormal curves shift through time towards smaller hydrocarbon accumulations, the outer envelope of discovered fields traces a fractal curve. Given other USGS studies, one can safely assume that, in maturely-explored basins, one has a nearly complete census of accumulation sizes above the limit of economic perceptibility.  The fractal method is not suitable for frontier areas where few discoveries have been made and assumes present-day technology.  However, the lower limit of estimation can be set arbitrarily even down to crustal abundance concentrations.**Estimates derived from the application of the fractal method to the world's hydrocarbon resources show convergence with the USGS geology-analog estimation method used for world assessments.**
USGS studies conducted by C.D. Masters and his colleagues indicate that 36 percent of the world's conventional oil and gas resources are left to be discovered.  This estimate was made on the basis of geologic analogs to well-known petroleum producing regions.  Barton and Scholz studied a data set of the world's giant oil and gas fields using the fractal approach, and estimate that 37 percent of the world's conventional oil and gas resources remain to be discovered.  The convergence between these two methods leads to a higher degree of confidence in the result than if only one method had been employed.  The fractal method yields results faster and easier than traditional methods, yet it is robust and clarifies the size-frequency distribution of hydrocarbon accumulations.  The fractal method is being used in the 1995 National Assessment of Oil and Gas Resources and ongoing world energy assessments to corroborate traditional geology- and analog-based methods. The fractal method has been computerized by Barton and Trussov making the method readily available to Federal and State government agencies, industry, and academia.For More Information:Dr. Christopher BartonU.S. Geological SurveyMS 940Box 25046Denver Federal CenterDenver, CO  80225
Email: barton@usgs.gov

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This USGS Fact Sheet can be found at <URL:http://energy.usgs.gov/factsheets/HydroRes/estimat.html>Maintained by L. Friedrich  Last updated 24-Sept-1997*