There is an abundance of natural gas in North America, but it is a non-renewable resource, the formation of which takes thousands and possibly millions of years. Therefore, understanding the availability of our supply of natural gas is important as we increase our use of this fossil fuel.

This section will provide a framework for understanding just how much natural gas there is in the ground available for our use, as well as links to the most recent statistics concerning the available supply of natural gas.

As natural gas is essentially irreplaceable (at least with current technology), it is important to have an idea of how much natural gas is left in the ground for us to use. However, this becomes complicated by the fact that no one really knows exactly how much natural gas exists until it is extracted. Measuring natural gas in the ground is no easy job, and it involves a great deal of inference and estimation. With new technologies, these estimates are becoming more and more reliable; however, they are still subject to revision.

A common misconception about natural gas is that we are running out, and quickly. However, this couldn't be further from the truth. Many people believe that price spikes, seen in the 1970's, and more recently in the winter of 2000, indicate that we are running out of natural gas. The two aforementioned periods of high prices were not caused by waning natural gas resources - rather, there were other forces at work in the marketplace. In fact, there is a vast amount of natural gas estimated to still be in the ground. In order to understand exactly what these estimates mean, and their importance, it is useful first to learn a bit of industry terminology for the different types of estimates.

The EIA provides classification system for natural gas resources. Unconventional natural gas reservoirs are also extremely important to the nation's supply of natural gas.

U.S. Natural Gas Resource Estimates

Below are three estimates of natural gas reserves in the United States. The first, compiled by the Energy Information Administration (EIA), estimates that there are 1,190.62 Tcf of technically recoverable natural gas in the United States. This includes undiscovered, unproved, and unconventional natural gas. As seen from the table, proved reserves make up a very small proportion of the total recoverable natural gas resources in the U.S.

The following table includes an estimate of natural gas resources compiled by the National Petroleum Council in 1999 in its report Natural Gas - Meeting the Challenges of the Nation's Growing Natural Gas Demand. This estimate places U.S. natural gas resources higher than the EIA, at 1,779 Tcf remaining. It is important to note that different methodologies and systems of classification are used in various estimates that are completed. There is no single way that every industry player quantifies estimates of natural gas. Therefore, it is important to delve into the assumptions and methodology behind each study to gain a complete understanding of the estimate itself.

Below is a third estimate completed by the Potential Gas Committee. This estimate places total U.S. natural gas resources at just over 1,320 Tcf, the lowest of the three estimates. This estimate classifies natural gas resources into three categories: probable resources, possible resources, and speculative resources, which are added together to reach a total potential resource estimate. Only this total is shown below.

There are a myriad of different industry participants that formulate their own estimates regarding natural gas supplies, such as production companies, independent geologists, the government, and environmental groups, to name a few. While this leads to a wealth of information, it also leads to a number of difficulties. Each estimate is based on a different set of assumptions, completed with different tools, and even referred to with different language. It is thus difficult to get a definitive answer to the question of how much natural gas exists. In addition, since these are all essentially educated guesses as to the amount of natural gas in the earth, there are constant revisions being made. New technology, combined with increased knowledge of particular areas and reservoirs mean that these estimates are in a constant state of flux. Further complicating the scenario is the fact that there are no universally accepted definitions for the terms that are used differently by geologists, engineers, accountants, and others.

Historical Proved Natural Gas Reserves

The graph below shows the change in proved natural gas reserves in the United States from 1990 to 2000, as recorded by the EIA. As can be seen, the levels of proved reserves in the United States have not changed significantly over the past 10 years. If the additions to proved reserves in a given year are larger than the subtractions from production, then proved reserves will increase, and vice versa. Usually, however, the additions are close enough to the subtractions to maintain a relatively constant level of proved reserves.

U.S. Dry Natural Gas Reserves 1990-2000

Source: EIA - U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 1990-2000 annual reports

Where Are These Reserves?

Most of the natural gas that is found in North America is concentrated in relatively distinct geographical areas, or basins. Given this distribution of natural gas deposits, those states which are located on top of a major basin have the highest level of natural gas reserves. As can be seen from the map below, U.S. natural gas reserves are very concentrated around Texas and the Gulf of Mexico.

Dry Natural Gas Proved Reserves by Area - 2006

Source: EIA - Office of Oil and Gas

This map gives a general impression of where most of the proved natural gas resources are in the United States. Visit the EIA for more in-depth analysis into natural gas reserves across the country and to access geographical natural gas data.

World Natural Gas Reserves

The EIA, in conjunction with the Oil and Gas Journal and World Oil publications, estimates world proved natural gas reserves to be around 5,210.8 Tcf. As can be seen from the graph, most of these reserves are located in the Middle East with 1,836.2 Tcf, or 34 percent of the world total, and Europe and the Former U.S.S.R. with 2158.7, or 42 percent of total world reserves. The United States, by this calculation, possesses 3 percent of the world total natural gas reserves.

World Natural Gas Reserves by Region - Dec 2006

Source: Oil & Gas Journal 2006

For more information on international natural gas reserves, visit the EIA's international data section on their website.

Now that the methods of reserve estimation, and the most recent data concerning North America and the World's supply of natural gas has been discussed, proceed to learn about the many uses of this vital gas!