Worldwide supply of natural gas is examined in relation to worldwide demand for gas. Unlike reserves of crude oil, the natural gas reserves are noted to be distributed geographically in far corners of the world often beyond direct access by pipelines.
In contrast, the worldwide demand for natural gas is shown to be concentrated in relatively few countries.
This paper shows that the market-limited supplies must be matched with supply-limited markets if natural gas resources are to provide energy needs beyond the declining years of crude oil.
The economic wellbeing of the United States and that of the Western Europe and Japan depend critically on having sufficient energy resources, among which natural gas occupies a premium rank. That is why the status of natural gas reserves, worldwide or indigenous, has been in the forefront of just about every long-range energy planning effort. In the United States, almost 30% of our total energy consumption comes from natural gas. It was only 6 years ago, in 1973, that the "destination embargoes" put on Arab oil helped focus the public opinion on our dependence on crude oil imports. That energy crisis, however, was not the first one. The following is a direct quote from the Bulletin of American Association of Petroleum Geologists some years back: ". . . It is therefore evident that the people of the United States should be informed as people of the United States should be informed as fully as possible as to the reserves now left in this country, for without such information we cannot appraise our probably dependence upon foreign supplies of oil, on the expanding use of which so much of modern civilization depends." Date of the above quote was 1922. The problem then, as the problem now, was limited supply vs increasing demand. problem now, was limited supply vs increasing demand. Surprisingly as was recently pointed out, the solution proposed then was very similar to a solution proposed now: eliminating waste, conservation, proposed now: eliminating waste, conservation, synthetic crude from coal, development of shale oil reserves. The problems we face in energy today have two dimensions as they had over 50 years ago the supply and the demand. Interestingly, the proposals by government agencies 50 years ago and proposals by government agencies 50 years ago and today both address control of the demand and both yet somehow, directly or indirectly, neglect the supply. The background of what actually has happened between the energy crisis of 1922, 1973, and more recently 1979, is not only informative, but significant as well. No commercial shale, or synthetic crude industry from coal has developed. Control of demand through conservation largely has remained rather ineffective. Coal production has not even increased significantly. The only significant and most observable increase was that of production of crude oil and natural gas. In our country, the rate of production increased from 1.3 million B/D in 1922 to almost 8 million B/D in 1978. Present U.S. reserves recently released jointly by API and AGA put recoverable oil at 27.8 billion bbl and proved gas reserves at 200.3 Tcf as of Dec. 31, 1978.
The phenomenal increase in production and increase in recoverable reserves (in 1922, the reserves were reported to be 5 billion bbl) represent the increase in supply that inevitably occurred between 1922 and the present, not having been even suggested or effectively pursued as a remedy to our recurring energy crises.
It was the private sector, the oil and gas industry operating under sufficient favorable economic incentives and a free market climate, that made it possible to commit the risk capital, to drill end find the reserves that eventually led to our present oil, gas, and petrochemicals industries. As a producer of oil and gas, the United States (with the exclusion of Alaska) has been the most intensively explored petroleum producing region in the world.