Compiling and Reporting Proved and Potential Natural Gas in the United States
Authors: Evans David M. 
Published: December 2007

In assessing a committee's estimates of our natural gas reserves, as in evaluating an inventory of stock in the larder, we must know which system was used. Did they count only the labeled cans? did they include also the fruit on the vines? or did they add a little more for the seeds in the packet and the pictures in the catalog? packet and the pictures in the catalog? There is a shortage of natural gas in the United States. This is the consensus of experts in industry, financial institutions and government bureaus who study this clean fuel that provides one-third of our energy needs. Recent investigations have demonstrated the accuracy of the present methods of estimating natural gas reserves. But there are still critics of the gas industry who suspect that the natural gas producers might be hiding some of their reserves. They complain that natural gas figures are reported by industry-oriented committees. The figures, they say, are based upon secret information locked in company files and the consumers and government agencies have access to only a minimum of information. Furthermore, the figures are so conservative they scare the consumer to death. Since 1945, proved reserves have been compiled and reported by the American Gas Association (AGA) Committee on Natural Gas Reserves, a committee of more than 100 geologists and engineers. Since 1963, the Potential Gas Committee, a committee composed of about 150 geologists and engineers and sponsored by the Colorado School of Mines, has estimated the potential or undiscovered supply of natural gas in the U. S.

Hidden Reserves - The Figment

Any charge that the industry is hiding natural gas reserves implies that the AGA proved reserves committee has not been doing its job. Natural gas experts argue that even without a check of the AGA committee's figures, complaints of a "rigged shortage" can be proved to be unwarranted. It has been shown that the gas shortage is the direct result of a decline in drilling wells. The Potential Gas Committee has reported enormous supplies Potential Gas Committee has reported enormous supplies of natural gas waiting to be discovered. Proved additions to natural gas reserves per foot of hole drilled were as high in 1970 as in 1960. The problem is that the footage of hole drilled has declined drastically. John D. Emerson, an energy economist with the Chase Manhattan Bank, has pointed out that the reason for the drilling slump is that "between 1960 and 1970 the industry's exploration and development expenditures per foot drilled rose by over 50 percent. During this period crude oil prices, which provide the bulk of the industry's revenue, rose by 9 percent Natural gas prices rose faster, but gas prices were so depressed in 1960 that natural gas provided only 5 percent of the industry's revenue. percent of the industry's revenue. The Federal Power Commission (FPC) has investigated the charge that gas reserves were being hidden by the producers in southern Louisiana. It checked the USGS records and the records of the Louisiana Conservation Dept. The gas producers in the South Louisiana area allowed the FPC to examine their normally confidential information. Result: The FPC confirmed the accuracy of the reserves reported and found no hidden reserves. But this has not satisfied the critics. In Dec., 1971, the FPC announced a new, massive survey to cover gas reserves as of year-end 1970.

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