ASPO the Association for the Study of Peak Oil

Proceedings of the 2nd International Workshop on Oil Depletion, Paris, France, May 26-27 2003,
Edited by K. Aleklett, C. Campbell and J. Meyer, www.peakoil.net/iwood2003 .

The World’s Endowment with Natural Gas:
The Perspective from BGR’s New Energy Study
J. Peter Gerling & Hilmar Rempel

Natural gas accounts for about 24% of the worldwide primary energy consumption, after crude oil and hard coal. Its share has increased in the last several years, and this trend can be expected to continue in the future.

The global estimated ultimate recovery (EUR) determined in this study for conventional natural gas is about 447 T.m³ corresponding to about 353 Gtoe, which is about the same as the EUR for conventional oil. This value is nearly 8 T.m³ (about 2%) more than the previous estimate in 1997. It may be considered as a conservative estimate. The remaining potential is about 2 T.m³ less than before.

The CIS countries, particularly Russia, have the largest EUR. The value for the Middle East is also considerable. Although North America has a substantial EUR, the remaining potential is less significant, since nearly half of its EUR has already been produced (particularly in the USA). The EUR of about 5% for Europe (not including the CIS countries) is of little importance. The European gas market, however, has access to about 38% of the global EUR for natural gas, due to the accessibility to Russian fields. If the Middle East is considered a potential supplier, this figure rises to about 70%. The European gas market, therefore, is in a comfortable position compared to other gas markets.

Despite increasing production, global reserves of conventional natural gas have further increased to nearly 161 T.m³ at the end of 2001. Their energy content corresponds to about 84% of the global reserves of conventional crude oil. Global resources of natural gas are estimated to be about 217 T.m³. The global remaining conventional natural gas potential is about 337 T.m³, with an energy content about 26% above that of the remaining conventional oil potential.

Global production of natural gas has continually increased in the last several years, reaching a high of about 2.5 T.m³ in 2001. The regions with the highest production are the CIS countries and North America, each with about a third of global production, followed by Europe with an eighth. Cross-border trade (not including transit across third countries) amounted to about 650 G.m³ (about 25% of production worldwide) in 2001. About 23 % of this amount was liquified natural gas (LNG).

Cumulative natural gas production by the end of 2001 reached nearly 70 T.m³, or 30% of the total reserves discovered up to that time. Half of this amount was produced within the last 16 years. When flared gas is taken into consideration, more than one-third of the original reserves have been removed.

Half of the total reserves discovered up to this time will have been consumed by 2019, assuming annual production remains the same and reserves are not increased by new discoveries and enhanced production methods. Static lifetime of the present natural gas reserves is about 64 years.

There are four main regional natural gas markets in which producers and distributors have long-term contracts: the European market, with the main exporters Russia, Algeria, Norway, and the Netherlands; the North American market (NAFTA); the Asian market characterized by large distance between the main consumers (mainly Japan, South Korea, and Taiwan) and the producing countries (mainly Indonesia, Malaysia, Australia, and Brunei as well as Qatar and the UAE in the Middle East); and the South American market, which has recently developed.

There are considerable uncertainties in the estimates of the amounts of non-conventional natural gas that can be recovered. Global reserves of non-conventional natural gas are estimated to amount to only 2 T.m³, because recovery technology is available only for coal-seam gas and tight reservoirs. Moreover, the conditions necessary for economic production are present only in relatively small regions. We estimate non-conventional natural gas resources (not including gas hydrates and aquifer gas) to amount to about 220 T.m³, which is about half of the estimated ultimate recovery of conventional natural gas. The 1:100 ratio of reserves to resources reflects the low degree of exploration. For comparison: This ratio is about 1:1 for conventional natural gas and about 3.3:1 for conventional oil.

Estimates of the quantity of natural gas in gas hydrates and aquifers differ considerably and have a high degree of uncertainty. A few production facilities for this kind of gas do exist, but they are mostly on a pilot scale. A critical analysis of the results of recent research leads to a distinct reduction of the resources that can be expected. Significant commercial production is not probable in the foreseeable future, despite the immense amounts that can possibly be recovered – 800 T.m³ for gas hydrates and 500 T.m³ in aquifers, which is more than the EUR of conventional natural gas.

Demonstrated global reserves of natural gas will last until mid-century, assuming production remains at the same level as at present. It can be expected that the technologies for production of coal-seam gas and tight gas will continue to be improved, and increasing demand will be met into the latter part of the century.

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