UNDISCOVERED RESOURCE AND PRODUCTION POTENTIAL OF NATURAL GAS FROM THE U.S. FEDERAL OUTER CONTINENTAL SHELF (OCS)

The OCS contains 67% (75 Bbbl) and 58% (362.2 Tcf) respectively, of the undiscovered technically recoverable oil and gas of the U.S. About 12% of the proved reserves of oil and 19% that of gas are present in the OCS. However, a significant portion of the undiscovered technically recoverable oil (21%) and gas (10%) is under moratoria and is not available for exploration and development.

In 1998, 26% of the U.S. demand for natural gas was met by production from the OCS. Based on the 2000 National Assessment, about 192 Tcf of technically recoverable natural gas resources in the Gulf of Mexico remain to be discovered and/or developed. Over seventy percent of the remaining resources are present in water depths greater than 200 meters. Fifty-one percent of the undiscovered resources is present in water depths of 800 to 2400 meters.

In the Atlantic, the technically recoverable mean of natural gas is estimated to be 28 Tcf. Only 12.8 Tcf of the total is economically recoverable at $3.52 per Mcf. No new production is expected to occur in the next 10 to 15 years due to the existing moratoria.

The Pacific OCS is primarily an oil-prone area, except the Pacific Northwest Province in the Washington-Oregon Planning Area. The remaining gas reserves in the Pacific area are 2.3 Tcf, of which 1.4 Tcf is proved reserves. Undiscovered, economically recoverable gas resources are estimated to be 11.6 Tcf at $3.52/Mcf. Over 60% of the resources are believed to be present in the Central California and Santa Barbara – Ventura Provinces.

The mean technically recoverable natural gas resources of the Alaska OCS are substantial (122.6 Tcf) and far exceed those of the Gulf of Mexico. However, higher infrastructure costs, formidable logistical hurdles of distribution, and other economic constraints make the offshore Alaska gas economically nonviable. Only 3.0 Tcf of natural gas is economically recoverable at $3.52/Mcf Reserve estimates from five discovered fields, North Star, Liberty, Kuvlum, Hammerhead and Sandpiper, total 0.7 Tcf. Most likely, if gas is co-produced with oil, it will either be re-injected or consumed on site.