Monday, February 22, 2016

World Natural Gas Oil Shock Model

This post was originally published at Peak Oil Barrel in July 2015

The post that follows relies heavily on the work of PaulPukite (aka Webhubbletelescope), Jean Laherrere, and Steve Mohr.  Any mistakes are my responsibility.

For World Natural Gas URR Steve Mohr estimates 3 cases, with case 2 being his best estimate.

Case 1 URR= 14,000 TCF (trillion cubic feet)
Case 2 URR= 18,000 TCF
Case 3 URR= 27,000 TCF

Jean Laherrere’s most recent World natural gas URR estimate is close to Steve Mohr’s Case 1 at 13,000 TCF.

A Hubbert Linearization(HL) of World Conventional Natural Gas from 1999 to 2014 suggests a URR of 11,000 TCF, an HL from 1982-1998 points to a URR of 6000 TCF for conventional natural gas.

Note that “Conventional” natural gas subtracts US shale gas and US coal bed methane (CBM) from gross output minus reinjected gas for the World.

World Conventional Natural Gas HL (shale gas and CBM output from US deducted)


Currently World cumulative conventional natural gas output (using gross minus reinjected gas following Jean Laherrere’s example) is 4200 TCF, about 38% of the URR.

When shale gas and coalbed methane gas output in the US are added to World Natural Gas, the HL points to a URR of 20,000 TCF, this implies that shale gas, tight gas and CBM might have a combined URR of as much as 9000 TCF.  This matches well with the EIA’s 7000 TCF TRR estimate for shale gas and Steve Mohr’s 2500 TCF estimate for CBM. 

I suspect the combined shale gas and CBM numbers will be lower(4000 TCF), but that conventional gas will be more than 11,000 TCF (about 15,000 TCF) .
World Natural Gas HL below (includes all types of natural gas)


Note that the HL estimate is highly uncertain, the conventional estimate could be a little low (Jean Laherrere estimates 12,000 TCF) and combined shale gas, tight gas, and coal bed methane could vary from 2000 to 9000 TCF. 

For the World the USGS estimates about 16,000 TCF of conventional natural gas resources, the EIA estimates 7000 TCF of shale gas resources, and Steve Mohr estimates 2500 TCF of coalbed methane (CBM).  The total of these three is similar to Steve Mohr’s high case (case 3), I will use 26,000 TCF for my high case (case C).

The USGS estimates about 1000 TCF for US continuous gas (tight gas, shale gas, and CBM) and my low estimate is that the rest of the World will add another 1000 TCF from continuous natural gas resources.

The total when added to the HL estimate for conventional natural gas resources is about 13,000 TCF, which is my low case (case A).

I suggest 3 cases, with Case B (the average of case A and C) as my best guess.

Case A URR=13,000 TCF
Case B URR=19,000 TCF
Case C URR=26,000 TCF

Cumulative discovery data from 1900 to 2010 is used to estimate a discovery model for each of the three cases.  The equation is Q=U/(1+(c/t)^6), where t is years after 1871 (1872=1, 1873=2, etc.), Q is cumulative discoveries of natural gas in TCF, U=URR in TCF, and c is a constant found by a least squares fit to the data.

URR (TCF)            c
13000                    112
19000                    125
26000                    136

Chart with 3 discovery models and cumulative discovery data below.


The gap between the discovery model and the discovery data (for the 19000 and 26000 TCF cases) will be filled by backdated future reserve growth of both conventional and unconventional natural gas discoveries.

As a quick reminder the maximum entropy probability distribution is used to estimate the time from discovery to first production and has the form p=1/k*exp(-t/k) where p is the probability that resources discovered in year zero will become a producing reserve after t years(t=0.5, 1.5,…) and 1/k is the average number of years from discovery to first production.

Note that the median time from discovery to production is lower than the average by about 63%.  If 1/k=29 years, the median time from discovery to first production would be 18 years.

For the models presented, case A has 1/k=25, case B 1/k=29, and case C 1/k=32.
The three scenarios can be compared on the chart below.