The Potential Gas Committee and the Potential Supply of Natural Gas
Authors: Beebe B.W. , Hanley John M. 
Published: December 2007

The growth of the natural gas industry since World War II, coupled with numerous divergent estimates of future supply, prompted an industry self-examination of undiscovered potential supply and future requirements for natural gas. The Potential Gas Committee (PGC) estimated the undiscovered potential supply of natural gas in the U. S., exclusive of Alaska, to be 690 Tcf as of Dec. 31, 1966. Separate estimates of potential supply were made for the west, central and east supply areas and classified as probable, possible and speculative categories of undiscovered supply.

Potential supply is that undiscovered prospective quantity of natural gas that remains to be found under assumed conditions of adequate, but reasonable prices and normal improvements in technology.

The PGC is sponsored by the Potential Gas Agency (PGA) of the Mineral Resources Institute of the Colorado School of Mines Foundation, Inc. The PGA was selected by the Gas Industry Committee, composed of representatives of American Petroleum Institute (API), Independent Natural Gas Association of America (INGAA), and American Gas Association (AGA).

The PGC makes estimates of potential supply of natural gas in the U. S. These estimates must be related intimately to the rocks in which gas is found, by detailed studies and analyses of geologically significant areas by many qualified individuals. These studies are made by 12 regional work committees designated by the PGC.

The demand for natural gas and crude oil to provide important quantities of energy for consumption in the U. S. can be expected to continue. The economic, political and technological forces prevailing in the future will, as in the past, be the primary determinants of the price of natural gas and of crude oil in the field and in the market place, of how much of the undiscovered supply of natural gas and crude oil will be found by exploration, and of the rate at which each of these sources of energy will be developed and become available to the gas and oil industries.

Introduction

Any industry must be concerned with all aspects of its operations, not the least important of which is the supply of its particular commodity. This is particularly true for industries, such as the natural gas industry, that rely upon non-renewable resources. More than 38 million ultimate consumers paid nearly $8 billion for services by gas utilities and pipelines during 1966. The gas utility and pipeline industry, with a gross plant investment in excess of $30 billion, has become the sixth largest industry in the nation.

The Energy Explosion

To gain a better understanding of the growth of the natural gas industry to its status as the number two source of primary energy consumed in the U. S. today, it is necessary to see the growth of all forms of energy since the end of World War II. The annual consumption of all forms of primary energy increased 73 percent, from 32.9 quadrillion Btu in 1947, to 56.9 quadrillion Btu in 1966 as shown in Fig. 1. The annual consumption of energy from natural gas (dry) increased 284 percent, from 4.5 quadrillion Btu to 17.3 quadrillion Btu during this same 20-year period. Viewing this growth another way, the portion of the total energy-consuming market supplied by natural gas increased from 13.7 percent in 1947 to 30 percent in 1966.

Data shown in Fig. 1 for natural gas are USBM data and are derived as follows: gross production, minus returned to reservoirs, minus wastage, plus imports, minus exports, minus increase in underground storage and minus extraction shrinkage.