However, almost 95 percent of proposed new generating capacity will be gas-fired. Federal lands have played a large role in helping meet our needs, producing about 11 percent of the natural gas produced onshore in the United States while the OCS currently accounts for more than 26 percent of domestic natural gas production, with the Gulf of Mexico OCS producing, on average, over 5.1 tcf of natural gas per year. Despite these impressive statistics, it is clear the Nation and the natural gas industry face a daunting supply challenge. The depressed product prices of 1997 through early 1999 have resulted in a decline in domestic gas production capacity. Investments necessary for developing new gas supplies slowed dramatically in 1998 and 1999.
Continued investment is critical to maintaining, let alone expanding production capacity.
The OCS has not been immune to these market forces. During this same period, however, production from the deepwater slope has increased by an average of 77 bcf per year, more than offsetting the decline of the shelf. In 1999, deepwater production increased over 1998 levels by 350 bcf, reaching a total of 1 tcf. More recently, natural gas prices have rebounded, and most analysts believe they will remain strong. The gas resource base of the United States and Canada is substantial.