Periodic estimates of the quantity and geographic location of the potential natural gas resources remaining to be discovered, developed and produced in the United States have been made by the Potential Gas Committee, These estimates, however, cover a wide range of geographic conditions, depth subdivisions and variations in the cost of exploration and drilling. The principal objective of this study, sponsored by the Gas Research Institute and the Electric Power Research Institute, is to develop an econometric and resource modeling methodology to evaluate the relative costs of development of the natural gas resource potential which has been estimated by the Potential Gas Committee, and to present these relative cost data in such a way that meaningful comparisons can be made between alternate resources of natural gas. The economic investigations in this study have been concentrated upon two main components: a drilling cost model and a discovery process model. A modification to a previously developed model has been prepared to estimate the discovery rates of natural gas based upon the Potential Gas Committee estimate of ultimate natural gas resource and the previous exploration history (actual or analog) of a geological province. The econometric model will be calibrated by comparisons with the subjective estimation of resource distribution by Potential Gas Committee members, and a consensus discovery rate would be derived. The drilling cost model will be used to translate the exploratory and development efforts into present constant dollars.

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