U. S. Gas Supply Outlook
Authors: Allen C.M. 
Published: December 2007

American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc.

This paper was prepared for the 48th Annual Fall Meeting of the Society of Petroleum Engineers of AIME, to be held in Las Vegas, Nev., Sept. 30-Oct. 3, 1973. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made.

Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines.

This paper is a review of the domestic natural gas segment of the recently completed National Petroleum Council's study entitled "U.S. Energy Outlook." This review places particular emphasis on the rising trend of total costs, as well as estimated unit costs. These estimates of cost are translated into required unit revenues under various conditions.

Introduction

Gas supply is only a part of the massive study encompassing the outlook for all forms of energy recently conducted by the National Petroleum Council at the request of the Secretary of Interior. This study concentrated on the period 1971 thru 1985, and took a more general look at the period 1986 thru the year 2000. Insofar as possible, this paper will be confined to domestic gas supply and the period 1971 thru 1985.

Although oil supply and gas supply were studied by two separate Task Groups, there was a great deal of cooperation between the two groups. Time will not permit a long discussion of the computer program which was developed for the oil and gas study as a joint program which was developed for the oil and gas study as a joint endeavor of both Task Groups. However, it should be made clear that this program is not an econometric model solving for a price-supply relationship. The program has no internal optimizing price-supply relationship. The program has no internal optimizing logic or mechanisms by which it can relate calculated economic results to investor motivation or incentives. The computer program was developed in order to facilitate the processing of program was developed in order to facilitate the processing of data and for making a large number of repetitive calculations.

The study was performed on a geographic region-by-region basis, taking into account variations in drilling and finding experience and, of course, costs. The regional results were subsequently combined to present total U. S. results. Three different levels of drilling activity were assumed and combined with two levels of success in findings. This led to a great many calculations and made some type of computer program the only feasible method of operation.

Within the computer program, oil supply - including associated-dissolved gas and plant liquids - and related economics were calculated for the lower 48 states plus southern Alaska. Non-associated gas supply, including lease and plant liquids, and related economics were computed for only the lower 48 states. Projections of North Slope oil and gas and southern Alaska Projections of North Slope oil and gas and southern Alaska non-associated gas operations were made independently rather than thru the computer program.