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Analysts: Don't underestimate U.S. shale

Jan. 24, 2012 at 8:26 AM   |   Comments

WASHINGTON, Jan. 24 (UPI) -- U.S. data indicated a lower-than-expected reserve estimate from the Marcellus shale deposit though analysts downplayed the significance of the findings.

The U.S. Energy Information Administration said the Marcellus shale gas field in the country's Midwest region holds an estimated 141 trillion cubic feet of gas, a sharp decline from the previous estimate of 410 trillion cubic feet.

Bill Herbert, an energy research official at Houston investment bank Simmons, told the Financial Times assessing shale gas reserves was a difficult task.

"Reserve estimates are inherently imprecise and have an enormous error bar around them," he said. "This latest estimate on the part of the U.S. government just reinforces the difficulty in ascertaining shale reserves with precision."

The EIA in its annual outlook for 2012 said natural gas production in the United States would increase 7 percent during the coming decades. The EIA estimate for Marcellus shale is still more than 50 percent higher than assessments from the U.S. Geological Survey.

"The new EIA figures reflect, to some extent, the more conservative view of the USGS," Adam Sieminski, an energy analyst at Deutsche Bank, told the Financial Times. "But it will not discourage further exploration because the companies involved do not believe any estimates reflect what will eventually be recoverable as technology improves."

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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