WASHINGTON (Reuters) - The United States has over 100 years worth of natural gas supplies, and forecasters have consistently low-balled the amount of the clean-burning fuel trapped in unconventional places like shale rock, an industry group said on Wednesday.
Total U.S. recoverable supplies amount to 2,247 trillion cubic feet, or 118 years worth of supply at current production levels, according to a report funded by the American Clean Skies Foundation and completed by Navigant Consulting Inc.
The foundation is chaired by Aubrey McClendon, the outspoken chief executive of Chesapeake Energy Corp, the third-largest U.S. natural gas producer.
“The size of these shale gas deposits is so enormous that they can no longer be overlooked,” said McClendon, whose company is making big bets in shale gas plays like the Barnett Shale in Texas and the Haynesville Shale in Louisiana.
More conservative estimates peg U.S recoverable natural gas supplies at 1,680 trillion cubic feet, or 88 years of supply.
But such estimates ignore the potential of unconventional gas production from shale, tight sands and coal-bed methane, said Rick Smead, co-author of the report and project manager for Navigant.
Forecasts from the U.S. Energy Information Administration “have been significantly outstripped by actual behaviour,” Smead said.
Shale formations, sedimentary rock found across the United States that makes natural gas, were once untouchable.
But new technology like horizontal drilling and fracture stimulation in recent years have “liberated enormous amounts of natural gas,” McClendon said.
A conservative estimate for sustainable production from just the “big seven” shale plays is at least 27 billion cubic feet per day -- half of current total natural gas production, Smead said. But many unconventional natural gas plays, especially in the West, are off-limits to drilling because of a congressional ban.
McClendon’s Oklahoma City, Oklahoma-based company is spending $13.5 billion on drilling and leases in 2008, with the aim of being the biggest U.S. natural gas producer in coming years.
Chesapeake is the third largest U.S. natural gas producer, behind BP and Anadarko, according to first-quarter data.
Other U.S. natural gas producers like EOG Resources Inc, have taken a more cautious approach to securing rights to drill in unconventional shale plays.
U.S. natural gas futures prices have fallen about 30 percent since the start of July, and settled at $9.248 per mmBtu on Wednesday. McClendon told Reuters he expected prices to hover in the $10/MMBtu range.
“I think somewhere in that $9 to $11 range with an average of $10 is a pretty good price,” McClendon said.
McClendon also declined to comment on a rumour that China National Petroleum Corp might bid for a minority stake in Chesapeake’s shale gas assets.
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