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U.S. Gas and Oil Reserves Still Growing

Natural gas reserves set a record, oil reserves also up.

Remember those doomsayer reports that the world is running out of energy reserves? Well, it won't happen in the United States in the near future, according to last week's report released by the U.S. Department of Energy's Energy Information Administration.

Record-high additions to U.S. dry natural gas proved reserves in 2007 totaled 46.1 trillion cubic feet, more than double the 19.5 tcf of dry natural gas actually produced in the United States during the year. That puts total U.S. proved reserves at the highest level in the 31 years that EIA has published annual reserves data.

Prior to 2007, proven natural gas reserves steadily increased due to new discoveries every year since 1998. The report did not include the most recent and largest natural gas discovery in the Marcellus shale formation stretching from central New York through West Virginia, which is expected to double the nation's natural gas reserves. That should be reflected in the 2008 update.

The dry natural gas reserve additions mostly reflected the rapid development of unconventional gas resources including shale, coal bed methane and tight low- permeability formations. Many of these unconventional resources are now economic to develop because of the application of advanced technologies like horizontal drilling with hydraulic fracturing. Shale proved reserves, in particular, increased 50% in 2007 and now account for about 9% of the total.

Domestic proven oil reserves rising, too

For the first time in four years, U.S. proved oil reserves increased during 2007. Proved reserve additions of 2.0 billion barrels exceeded production of 1.7 billion barrels. Year-end proved reserves in 2007 stood at 21.3 billion barrels, nearly 2% higher than at the end of 2006.

The largest increase of year-end crude oil proved reserves came from Alaska, growing 7% over 2006, followed closely by Texas with a year-end increase in proved reserves of 5%. Alaska's increase included 45 million barrels of new field discoveries. Due to rapid development of unconventional oil resources associated with the Bakken Formation, North Dakota had the third largest year-end increase in crude oil proved reserves, up 17% from 2006.

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