Wednesday, August 24, 2011

USGS Estimates Marcellus Gas at 84 Tcf

The U.S. Geological Survey reported yesterday that it had revised its estimates of the resource potential of the Marcellus Shale, estimating that the formation contains 84 Tcf of undiscovered natural gas.  Sounds like a lot, but it is less than a third of the 285 Tcf that has been commonly used and considerably lower than the 410 Tcf to 827 Tcf that more exuberant sources have suggested.

This is the first time the USGS has estimated the Marcellus since 2002, when it estimated a 2 Tcf potential.  But that was before horizontal drilling and hydraulic fracturing made access to shale gas relatively easy.  The USGS also estimates that there are 3.4 billion barrels of recoverable natural gas liquids (range: 1.6 to 6.2 billion barrels).

Estimates change all the time, but this is a significant deviation from expectations.  I expect to hear some questioning of this report by those who have invested billions in the Marcellus.

No word on whether or not we should be looking for a new estimate for the Haynesville Shale anytime soon, but based on this revised estimate, the Haynesville would be by far the largest gas field in the U.S.

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