Fact-Checking Obama: Is There Really '100 Years' Worth of Natural Gas in the US?
Earlier this week in his State of the Union Address, Obama announced his intention to accelerate domestic natural gas production. As part of his pitch, he claimed that there's enough natural gas buried in the United States to "last 100 years", and that a booming natural gas industry would lead to hundreds of thousands of American jobs. Here's the snippet:
We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade.The president then took to the road with the pitch, which is part of his effort to sell the nation on a GOP-esque "all of the above" energy strategy.
A lot of folks have heard these numbers before; especially the "100 years of gas" meme. Industry-wide job growth forecasts are dependent on tons of overlapping assumptions—suffice to say that it's highly, highly speculative and shouldn't be taken too seriously. Especially since one of those assumptions—that there's enough natural gas to meet current energy demands for 100 years—may be grossly overstated.
First of all, that '100 years of gas' figure was first trotted out by a biased report carried out by the natural gas industry, and should be taken with a grain of salt. This must-read Slate piece by Chris Nelder explains:
The claim of a 100-year supply originated with a report released in April 2011 by the Potential Gas Committee, an organization of petroleum engineers and geoscientists. President and Chairman Larry Gring works with Third Day Energy LLC, a company based in Austin, Texas, that is engaged in acquiring and exploiting oil and gas properties along the Texas Gulf Coast. Chairman of the Board Darrell Pierce is a vice president of DCP Midstream LLC, a natural-gas production, processing, and marketing company based in Denver. The report's contributors are from the industry-supported Colorado School of Mines. In short, the Potential Gas Committee report is not an impartial assessment of resources.This isn't to say straight-out that the report is rubbish—but there's a massive built-in incentive for the contributors to gin up some extra-rosy figures to boost their industry.
But what if the report was right? If an objective analysis of the data confirmed the numbers, then the mere fact that it was carried out by partial contributors wouldn't be criticism enough. However, it doesn't seem that's the case. Nelder explains where the numbers come from, writing that the total gas stores in the U.S. are estimated therein to be "2,170 trillion cubic feet (tcf). At the 2010 rate of American consumption—about 24 tcf per year—that would be a 95-year supply of gas, which apparently has been rounded up to 100 years."
But the devil is in the details, of course—here's Nelder breaking down why, even if there is '100 years worth of gas' buried in the US, we probably won't be able to get most of it:
273 tcf are "proved reserves," meaning that it is believed to exist, and to be commercially producible at a 10 percent discount rate. That conforms with the data of the U.S. Energy Information Administration. An additional 536.6 tcf are classified as "probable" from existing fields, meaning that they have some expectation that the gas exists in known formations, but it has not been proven to exist and is not certain to be technically recoverable. An additional 687.7 tcf is "possible" from new fields, meaning that the gas might exist in new fields that have not yet been discovered. A further 518.3 tcf are "speculative," which means exactly that. A final 176 tcf are claimed for coalbed gas, which is gas trapped in coal formations ...I really encourage you to read Nelder's entire analysis—it's quite thorough. He says that a more accurate number may be 21 years worth of gas at current consumption levels; but he also notes that since nat gas champions are saying we should be converting our transportation sector to run on the stuff, we may run out even sooner than that.
By the same logic, you can claim to be a multibillionaire, including all your "probable, possible, and speculative resources." Assuming that the United States continues to use about 24 tcf per annum, then, only an 11-year supply of natural gas is certain. The other 89 years' worth has not yet been shown to exist or to be recoverable.
The bottom line is that we should be raising skeptical eyebrows aplenty when the president—or anyone—starts trotting out talk like the '100 years of gas' claim. Or say that the United States is like a 'Saudi Arabia' of gas, or so on. There simply isn't enough good information out there to know just how much gas is recoverable, and there's every reason to be cautious of industry-backed numbers. There's certainly not enough good info available to justify making such grandiose claims that, in truth, border on industry boosterism.