Jean Laherrère comments on "Global Natural Gas Perspectives"

"Global Natural Gas Perspectives" by Nakicenovic, et al, published by the International Gas Union for the Kyoto Council and the International Institute for Applied Systems Analysis, October 2-5, 2000. [abstract] [full report, pdf, 1.4mb]

This is a very well written paper with interesting graphs and a good history of natural gas, but I disagree with its claims that gas resources are very abundant, which appear on almost every page often without real justification by data or reference and with its belief that resources are similar to reserves.

I offer below some more detailed comments by page.

Page 2: The most recent findings indicate that the perceptions about global methane resources have changed drastically. Natural gas is much more abundant around the world than was estimated just a decade ago

It depends which estimates are used. It is important to distinguish technical estimates (confidential) from what are reported (published) for political, commercial or financial purposes. There has indeed been growth in reported reserves, but the technical estimates are little changed, as shown in the graph for conventional gas remaining reserves. Technical reserves are estimated as the mean values (called proven + probable or 2P) and backdated to the year of discovery. The world’s remaining technical reserves have been substantially flat since 1980 at about 6 000 Tcf (Tcf Å EJ), but the reported so-called Proved Reserves (current P) have grown from 3000 Tcf in 1980 to 5200 Tcf in 2000.

Even the remaining reserves, reported by the Oil & Gas Journal, flattened around 1993 after a sharp increase from 1965 to 1992.

I cannot identify the claimed recent findings that are said to have drastically changed the perspectives. South Pars in Iran is reported as a 1991 find, but it is the extension of North Field in Qatar found in 1971. So the whole field has to be attributed to 1971 (being the world’s largest gasfield by far) especially as the extension into Iran was evident at an early stage. Much of what it attributed to new discovery is in fact nothing more than the correction of poor initial estimates (constantly revised), termed Proved.

The technical estimates of the world’s conventional have been flattening since 1980 as shown in the above graph

The estimates of unconventional gas have in fact been declining: In 2000, the best-known Russian hydrate expert, Soloviev, estimated the potential for hydrates to be as much as a hundred times less than in the previous estimates: "All published global estimates of methane content in gas hydrates of the Ocean are enormous and range more than three orders of magnitude from 1E15 [1x1015] to 7.6E18 cub.m... the global methane content in submarine gas hydrates is estimated at 2E14 cub.m".

To-date, no one knows if it will be possible or economic to produce hydrates.

It is worth pointing out too that the hopes of twenty years ago for tapping huge amounts of methane contained in geo-pressured aquifers are no longer included in official assessments. The U.S. Department of Energy (DOE) funded a geopressured-geothermal energy research program (mainly on the Gulf Coast) for a period of seventeen years (1975-1992) costing approximately 196 million dollars. Bonham (1982) estimated that there was as much as 50 000 Tcf in geo-pressured brines in the Gulf Coast. This is much larger than the 1 300 to 7 000 Tcf attributed to the Blake Ridge hydrates by the USGS, and is obviously a much more reliable resource. Simon 1996 states: "A later "official" estimate, made in the midst of the congressional debate on energy in the same year 1977, by Dr. Vincent E. McKelvey, who was then director of the U.S. Geological Survey, was that "as much as 3,000 to 4,000 times the amount of natural gas the United States will consume this year may be sealed in the geo-pressured zones underlying the Gulf Coast region".

A paper entitled "What Are Unconventional Sources of Natural Gas?" ( notes:

"Geopressurized zones--areas that have abnormally high pressures for their particular depth. Such zones are formed by the rapid deposition and compaction of clays. Large volumes of compacted clay are deposited on top of more porous debris such as sand and silt. Water and gas squeezed from the clays during compaction enter the sands and silts under high pressures, hence geopressure. Experts estimate between 5,735 and 49,000 trillion cubic feet of natural gas are located within geopressurized zones in the Gulf Coast region, located between 10,000 and 25,000 feet below the earth's surface." And not a word on hydrates! Now it is the contrary.

Another paper, "Department of Energy, tech brief, June 1994 "Natural Gas from Deep-Brine Solutions" ( notes:

"The Gulf Coast resources of brine-encapsulated gas are estimated to be over 1000 times U.S. annual gas consumption."

Zorkin & Stadnik (1975) estimated the amount of gas dissolved in water at around 35 000 Tcf for West Siberia and as much again for the Caspian.

Page 4: The most drastic change in perception is associated with gigantic quantities of methane trapped in the ice, the so-called methane hydrates (clathrates).

This is an old estimate, which led to the myth that the quantity of carbon trapped in the hydrate form was at least twice as large as carbon stored as fossil fuels. Recent articles paint a more pessimistic picture: (Soloviev 2000, Holland 2000 and Laherrere 2000).

Doubts about hydrates will be discussed at the 17th World Petroleum Congress in Rio on September 1st-5th 2002 in a session entitled: "Economic Use of Hydrates: Dream or Reality?" (I have been chosen to chair it.)

Page 9: Gm3 = 1027 m3 = one million times the earth's volume! And Tm3 = 1036 m3

Gm3 = 109 m3 means that 1 km2 = 0.1 hectare!

Page 16: Carbon-free sources of energy would eventually take over, eliminating the need for carbon handling and storage. This would conclude the global transition toward decarbonization and the resulting major transformation of the energy system. Hydrogen has the lowest mass of all atoms and its use would radically reduce the total mass flow associated with energy activities

Pierre-Rene Bauquis (President de l’Association Française des Techniciens et Professionnels du Pétrole (1999-2000), Vice-President de l’Institut Français de l’Energie, Chargé de mission auprès du president de TotalFinaElf) wrote last May:

"1-Hydrogen is and will be expensive to produce, today as well as tomorrow. Today and up to 2030-2050 it will be produced from fossil fuels at a cost of 5 to 10 times (by energy unit) that of fossil fuels that are used to produce it. 2- Hydrogen is expensive to transport and to store and will stay that way. Today as well as tomorrow, the transport of hydrogen by pipe costs and will cost 10 to 15 times more per transported energy unit than hydrocarbon liquids (the laws of thermodynamics are as they are). The storage (either under pressure, or liquefied, or chemical, or adsorbed) could see its cost diminished, but it will stay much more expensive than the hydrocarbon liquids."

He concluded: "1-for calorific uses (industrial boilers, steam, electricity, heating, air conditioning), hydrogen is a "vector" less interesting than electricity. Electricity and natural gas are about the same order of cost in the matter of logistics/transport, either in massive quantities, or in final network. Hydrogen is and will stay 3 to 4 times more expensive to transport and distribute than natural gas. 2-For the uses of mobility (car, planes, boats) the advantage of hydrogen stays in the lack of urban pollution. In contrast, the high costs of logistics and storage in cars/planes/boats leads to the conclusion that, for moving, hydrogen will keep its handicap of low energetic volumetric concentration and its high cost of storage. 3- For the uses of mobility the best way to use hydrogen should be likely to carbonize it in order to convert it into synthetic hydrocarbons."

Bauquis’ statements are contradictory to the statements of page 16

Page 20: In a number of scenarios, natural gas is expected to approach half of all primary energy reaching up to 30 Gtoe (1300 EJ) per year. This corresponds to more than three times the total current global energy requirements or more than 15 times the current global gas production...

This is most unrealistic, being based on wishful thinking regarding hydrates and on obsolete estimates.

In fact, the likely scenario for conventional and unconventional gas production, based on technical data is below the lowest of the wide range of IPCC scenarios as shown in the graph at left.

It should be noticed that the past data (1950-1990) are clearly ignored. Furthermore the two highest scenarios (A1G message and A1G AIM) are still climbing in 2100.

This next graph models the production over the period 1950-2300 illustrating the extreme nature of the A1G message and A1G AIM scenarios extrapolated up to 2300.

These scenarios imply that the amount of gas produced from 2000 to 2300 would be twenty times the most likely technical estimate of the conventional and unconventional gas combined, making them utterly implausible.

The lowest IPCC forecast (B1 image) is still twice the technical scenario.

The same graph reproduced with an enlarged vertical scale displays a break around 2000 between the past trend and the two highest scenarios. The present world’s gas production is not showing any drastic change! Only the lowest scenario shows a reasonable fit with the past.

Since the oil projections are equally weak, it can be said that the IPCC conclusions from these unrealistic assumptions are not supported by technical data and are accordingly giving a dangerously misleading impression.

Page 21: The three scenarios have little in common. Scenarios that envisage large future contributions of natural gas to the future global energy supply. This means that the possibility of such developments is relatively robust

It is evident that all the authors of the scenarios have assumed a huge potential for gas supply, which is not supported by the data, having been misled by public data reported for political and financial purposes by international and national oil companies. The scenarios in reality are anything but robust.

Page 21: Recent assessments of energy resources convincingly indicate that hydrocarbon deposits are much more abundant and pervasive than previously believed

No reference to the recent assessments is given, but the authors may refer to the USGS 2000 assessment, which is contrary to the recent results of discovery by the oil and gas industry, which does not seem to follow the USGS conclusions in their new exploration.

Page 24: It should be noted that the quoted reserves are from public sources, which differ markedly from those based on technical evaluation as already discussed. (see my first graph)

Page 26: even oil and gas would last for about 120 years at current global consumption levels

Note that the graphs of page 24 shows 45 years for oil and 70 years for gas. They are clearly not additive, being produced in parallel.

Page 27: Smith and Robinson (1997) also estimate that the replication of the experience of the Northwest European Continental shelf to the whole world translates into reserves increment due to drilling advances of as much as 2 ZJ (350 billion barrels or 48 Gtoe)

This statement cannot be substantiated. Reserves in the North Sea have increased because water flooding turned out to be more effective than at first expected due to better than anticipated reservoir conditions. It has little to do with technology as such. The gas lift applied to the Forties Field has had no significant impact on the reserves (Laherrere 1998). Drilling advances, such as horizontal well increase the reserves per well by placing more of the reservoir in communication with the wellbore than is the case in a vertical well, but do not increase the reserves of the total field. Such technology tends to hold production higher for longer, which makes good economic sense, but at the expense of a steeper final decline. The reserves themselves are barely affected.

Page 31: Estimates of potential reserves of natural gas resulting from enhanced gas recovery are based on the assumption of a historical average recovery rate of 50 percent and an enhanced recovery of 30 percent yielding a total recovery factor of 80 percent

Instead of making assumptions about recovery factor (RF), it is better to look at facts and data, as illustrated on the graph at right. It plainly shows that most gasfields have a recovery factor of more than 75%, meaning that there is little scope for further improvement

Page 32: The estimates of coalbed methane (CBM) in-place are greatly in excess of what can be accepted as reserves.

Despite the large amounts of CBM and tight reservoir resources in the United States, V.Kuuskraa in his paper presented with Andy Dykes (USDOE) at IIASA-IEW proposes a mid-range forecast that US unconventional gas production will peak around 2030-2040 at only 5 Tcf/a, which is not greatly above the 4.5 Tcf/a produced in 2000.

Page 32: For the world as a whole, gas in tight reservoirs is estimated at about 4.2 ZJ (over 4 000 Tcf), which is approximately half the 8.6 ZJ coalbed methane estimate. It is difficult to reconcile this with the estimates for the US by the Department of Energy which show five time more tight gas sands and shales (respectively 270 Tcf and 49 Tcf) than coalbed methane (58 Tcf)

Page 33: Geopressured aquifer

As already mentioned, gas in geopressured aquifers, which was considered a potential resource twenty years ago, is no longer quoted in the assessments of the 2000 GRI report.

Page 33: Methane clathrate hydrates

As already mentioned above, the recent estimate by Soloviev 2000 has decreased the estimates by a hundred-fold. Oceanic hydrates are too dispersed to be producible, being mainly disseminated crystals in a muddy sediment.

On the other hand, hydrates in reservoirs in gas producing basins under the permafrost (as in the Arctic: Western Siberia, Mackenzie delta and North Slope) are identical to other free-gas reservoirs within the petroleum system. It is evident that these free gas accumulations, few of which are yet in production, will be tapped long before attention turns to the hydrate content.

Page 35: The direct recovery of methane from solid hydrate would in any case have a positive energy balance. The energy required to liberate is likely to be 13 to 17 times smaller than the thermal energy contained in the released methane (Macdonald 1998)

It is difficult to know how a net energy balance can be computed before a method to produce hydrates has been foreseen, still less actually developed. Any theoretic estimate must relate to massive hydrate, which is very rare, judging from the fact that ODP drilling has found only at three holes' cores with massive hydrates thicker than 30 cm, out of more than 2,400 holes (over 1,000 sites) and over 250 km of cores. The last find of 14 cm was at Site 997A (Leg 164 Blake Ridge), but it was evidently a very local occurrence as no hydrates were found at the same depth only 20 m away, at Site 997B. This confirms the view of Ginsburg (1998) that hydrate accumulations are restricted both in horizontal and vertical extent. Since most of the occurrences are disseminated crystals in mud sediments, it is difficult to imagine a net positive energy equation in producing them.

(On July 24 after the IIASA-IEW I sent to Nebosja Nakicenovic (at his request) a list of recent good references on hydrates, but I did not hear from him).

Page 35: The only known production of natural gas from hydrates occurred in the Soviet Union with the partial development of the Messoyakha gas field. The production method involved injecting methanol to decompose the hydrates. Unfortunately, this project has been an economic failure because of the high cost of methanol (MacDonald 1998)

The presence of hydrates in Messoyakha has been challenged by the best expert on hydrates in Russia, Gabriel Ginsburg in 1993. The methanol was used to prevent the formation of hydrates during the production of the reservoirs with free gas. In the FSU, reserves were estimated without economic constraints

Khalimov, who introduced the Russian classification in the WPC 1979, stated in 1993: "The resource base [of the former Soviet Union] appeared to be strongly exaggerated due to inclusion of reserves and resources that are neither reliable nor technologically nor economically viable"

Page 36: Abiogenic "Deep Gas"

Theories about an abiogenic origin of gas have circulated for many years, but so far are little more than wishful thinking. There are many examples of oil and gas fields producing from weathered or fractured crystalline rocks, but in all cases there is a perfectly normal explanation of migration from a flanking or overlying conventional source rock. So far as is known, no serious oil company is conducting exploration for abiogenic gas. If further evidence is needed, reference may be made to the report by the National Academy of Science "Climate change science" June 2001, page 10 (21 on pdf) which states unequivocally that: "Fossil fuels are of biogenic origin".

Page 50: What is crucial is that the limitation in future gas availability not to be dominated by geology but by human ingenuity in developing and connecting future gas deposits with consumption centers.

This is still another expression of faith in nearly infinite resources, which is not supported by the data.

Page 60: but with abundant methane from hydrates, hydrogen and electricity as the main energy carriers become a real possibility

Again, the extreme doubts concerning the viability of producing hydrates are ignored, and they are taken as a panacea solving all future energy problems.

Page 61 (Conclusion): Decarbonization in the world can continue as methane becomes the major energy source

It is likely that gas production (in calorific terms) will overtake oil production around 2030 but it will already be declining and could not be the major energy source if demand is still growing. Coal, nuclear and renewables need to replace oil and gas.

In summary this paper tells you: "Do not worry, keep consuming as there is abundance of gas resources," while the technical data say: "oil and gas resources are limited and if we care for our grandchildren, we need to save energy."