Crude oil prices shot up…
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Natural gas reserves in the United States fell by 2 percent in 2019 due to low prices, the Energy Information Administration said in an update on the country’s oil and gas reserves.
Henry Hub prices for natural gas in 2019 fell by more than 21 percent from 2018, the authority noted, adding that despite the modest decline, the United States had enough discoveries and production extensions of gas to replace 2019 production going forward.
In oil, reserves remained largely unchanged in 2019 despite a similar price decline, the EIA also said. In fact, proven crude oil reserves rose in that year by 367 million barrels. A decline in lease condensate reserves, however, made for a net decline in crude oil plus condensate reserves.
Perhaps surprisingly, it wasn’t the shale oil plays that accounted for the biggest increase in oil reserves—it was Alaska. New Mexico, which houses part of the Permian shale play, accounted for the second-largest reserve increase, and Texas came in third.
In natural gas, Ohio saw the biggest addition of reserves, at 10.4 trillion cu ft, but Texas saw a decline in reserves equal to 12 trillion cu ft. Three shale plays—the Eagle Ford, the Barnett, and the Bossier play—all saw sizeable reserve drops in 2019.
Last year likely saw even further declines in gas reserves and probably a decline in crude oil reserves, too, after the dive prices took in early spring on the back of the short but meaningful Saudi-Russian oil prices war, which was promptly followed by the coronavirus pandemic.
As producers cut their exploration and production budgets and many started on a path to diversification into renewable energy, chances are proven fossil fuel reserves in the United States dipped.
Prices have begun recovering lately, but the rebound has not been strong enough to merit a return to an exploration boom. Some doubt they will recover enough to justify more exploration at this point, although others foresee a short-term supply crunch that may motivate investment in exploration and production growth.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com