12-10-14 US Alienates Canada For No Good Reason

By Blythe Campbell

On December 4, The U.S. Energy Information Administration (EIA) issued its annual report on U.S. Crude Oil and Natural Gas Proved Reserves for 2013. “Proved reserves” are estimates based on existing economic and operating conditions.

U.S. proved reserves of crude oil increased for the 5^th year in a row, to 36.5 billion barrels, with 5.5 billion barrels of new discoveries exceeding adjustments and production of 2.9 billion barrels. North Dakota’s proved reserves have passed the Federal Gulf of Mexico, and are now second to Texas among the states.

For the third year in a row, Alaska’s crude oil and lease condensate reserves declined, with 186 million barrels of production, and significant downward revisions. There were 123 million barrels in positive changes due to upward revisions, acquisitions and field extensions, but no new field discoveries or new reservoir discoveries in old fields. However, Alaska still is in 4^th place (behind Texas, North Dakota, and the Gulf of Mexico) at 2.9 billion barrels of proved reserves, or about 8% of the U.S. total.

U.S. natural gas proved reserves increased significantly – to a new record of 354 trillion cubic feet – with 96% of new discoveries coming from extensions to existing fields. EIA says that an increase in natural gas prices contributed to the increase in reserves. Pennsylvania and West Virginia accounted for 70% of the increase in reserves this year with continued development of the Marcellus shale gas play. Shale gas now makes up more than 40% of the U.S. natural gas reserves.

Alaska’s natural gas proved reserves declined from 9.7 billion cubic feet to 7.4 billion cubic feet – a 24% decrease. Production of 289 billion cubic feet was dwarfed by downward revisions of 2.4 trillion cubic feet. EIA attributes this significant reduction to a decline in “associated-dissolved natural gas proved reserves, the result of deteriorating well performance in certain crude oil fields.” On the positive side, though much less significant, acquisitions and extensions added 366 billion cubic feet, and there was 1 billion cubic feet of new reservoir discoveries in old fields.

The EIA’s data in this report is based on a 12-month, first-day-of-the-month average West Texas Intermediate crude oil spot price of $97.78 per barrel, and a natural gas spot price at the Louisiana Henry Hub of $2.66 per MMBtu. Production data are estimates.