On Wednesday, the U.S. Energy Information Administration (EIA) updated its estimates of America's proved reserves of oil and natural gas for 2010. Here's a summary of the key findings:
1. Proved reserves of both oil and natural gas in 2010 rose by the highest amounts ever recorded in the 35 years EIA has been estimating U.S. proved reserves.
2. Technological advances in drilling and higher prices contributed to gains in reserves. The expanding application of horizontal drilling and hydraulic fracturing in shale and other "tight" formations, the same technologies that spurred substantial gains in natural gas proved reserves in recent years, played a key role. Further, rising oil and natural gas prices between 2009 and 2010 likely provided incentives to explore and develop more resources.
3. Oil proved reserves rose 12.8% to 25.2 billion barrels in 2010, marking the second consecutive annual increase and the highest volume since 1991 (see chart above).
4. Natural gas proved reserves (estimated as "wet" natural gas, including natural gas plant liquids) increased by 11.9% in 2010 to a record-high 317.6 trillion cubic feet (Tcf), the twelfth consecutive annual increase, and the first year U.S. proved reserves for natural gas surpassed 300 Tcf (see chart above).
5. Proved reserves reflect volumes of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
John Hanger provides this commentary on the EIA report:
"Most impressively, proved gas reserves in 2010 were up 50% compared to the 2005 number or the 1980 number. That's right, our proved gas reserves are 50% higher in 2010 than 30 years ago, despite using a lot of gas during that 30 year period.
Indeed, during the last 30 years, the country consumed more than double the amount of our 1980 proved gas reserve number. How could that be? Exploration and production activities are never ending. They keep filling the U.S. natural gas cup that has never emptied and is now overflowing.
So our proved reserves of natural gas have gone up for 12 straight years, increased during 2010 by the highest amount in 35 years, and are 50% higher than in 2005 or 1980."
Indeed, during the last 30 years, the country consumed more than double the amount of our 1980 proved gas reserve number. How could that be? Exploration and production activities are never ending. They keep filling the U.S. natural gas cup that has never emptied and is now overflowing.
So our proved reserves of natural gas have gone up for 12 straight years, increased during 2010 by the highest amount in 35 years, and are 50% higher than in 2005 or 1980."
MP: The EIA's significant upward revisions for proved reserves of U.S. oil and gas provide more evidence that America's job-creating, game-changing, economic-stimulating energy bonanza just keeps getting better and better all the time.
As Walter Russell Mead wrote recently:
As Walter Russell Mead wrote recently:
"Nature — or perhaps Nature’s God — seems to love mocking pundits. Just when the entire punditocracy, it sometimes seemed, had bought into the “American decline” meme, Europe collapsed and huge energy reserves were discovered underneath the United States. The “special providence” that observers have from time to time discerned in America’s progress through history doesn’t seem to be quite finished with us yet."
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