Report Contents
Report#:SR/OIAF/2000-04

Preface

Contacts

Executive Summary

1. Scope and Methodology of the Study

2.  Summary of Results

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[1]  David Pursell, Depletion: The Forgotten Factor in the Supply and Demand Equation: Gulf of Mexico Analysis (Houston, TX: Simmons and Company International, 1998).

[2] For example, see R.E. Snyder,“Oil and Gas Prices: What Else is Important?” World Oil, Vol. 220, No. 1 (January 1999), p. 31.

[3] Energy Information Administration, U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 1998 Annual Report, DOE/EIA-0216(98) (Washington, DC, December 1999), pp. 58-61.

[4]   Energy Information Administration, U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 1998 Annual Report, DOE/EIA-0216(98) (Washington, DC, December 1999), pp.19 and 27.

[5]   The report is expected in December 2000.

[6]   John S. Herold, Inc., Herold 33rd Annual Reserve Replacement Cost Analysis—Top 50 U.S. Companies (Stamford, CT, May 2000).

[7]  Energy Information Administration, Performance Profiles of Major Energy Producers 1998, DOE/EIA-0206(98) (Washington, DC, January 2000), p. 107.

[8]  Energy Information Administration, Natural Gas Annual 1998, DOE/EIA-0131(98) (Washington, DC, October 1999), Table 3, p.12. The daily figure is calculated by adding yearly State and Federal offshore figures for Texas, Louisiana, and Alabama and dividing by 366.

[9]  Advanced Resources International, internal memorandum, 1999.

[10]  R.E. Snyder,“Oil and Gas Prices: What Else is Important?” World Oil, Vol. 220, No. 1 (January 1999), p. 31.

[11]  National Petroleum Council, Meeting the Challenges of the Nation’s Growing Natural Gas Demand, Vol. I (Summary Report) (Washington, DC, December 1999), p. 13.

[12]  3D seismic imaging is a technique that uses sound waves and advanced computing technology to model the three dimensional shape of underground reservoirs, and horizontal drilling is a development process that extracts oil and gas by drilling through a reservoir horizontally, to maximize the number of feet of resource that is drilled through from a single well, thereby improving production. For more information about these techniques and other technologies that have aided oil and natural gas production see US Department of Energy, Environmental Benefits of Advanced Oil and Gas Exploration and Production Technology, DOE/FE-0385 (Washington, DC, October 1999).

[13]  M.N. Fagan, “Resource Depletion and Technical Change: Effects of U.S. Crude Oil Finding Costs from 1977 to 1994,” The Energy Journal, Vol. 18, No. 4 (1997), p. 101.

[14]  A synopsis of NEMS, the model components, and the interrelationships between the components is available in Energy Information Administration, The National Energy Modeling System: An Overview, DOE/EIA-0581(2000) (Washington, DC, March 2000).

[15]  Energy Information Administration, Analysis of the Impacts of an Early Start for Compliance with the Kyoto Protocol, SR/OIAF/99-02 (Washington, DC, July 1999).

[16]  Energy Information Administration, Annual Energy Outlook 2000, DOE/EIA-0383(2000) (Washington, DC, December 1999).

[17]  Energy Information Administration, Short-Term Energy Outlook, DOE/EIA-0202(00/2Q) (Washington, DC, April 2000), www.eia.doe. gov/pub/forecasting/steo/oldsteos/apr00.pdf.

[18]  Although the Rapid and Slow Technology Growth Cases are designed to highlight the uncertainty associated with the effects of technological development, they do not provide a formal confidence interval. In AEO2000, the rates of technological growth for the technological sensitivity cases were adjusted by 33 percent, rather than the 50 percent used for this analysi s in order to acknowledge th ebroad range of uncertainty around future technological change.

[19]  The projected substitution of coal for natural gas between cases is not just a function of the price in a given year, but also reflects projected capital stocks and relative efficiencies, which are modeled in NEMS. Although coal prices per unit of energy (Btu) produced are projected to be lower than natural gas prices, lower capital and operating costs for natural gas burners make its use economical for electricity generation.

[20]  Energy Information Administration, Short-Term Energy Outlook, DOE/EIA-0202(00/2Q) (Washington, DC, April 2000), www.eia.doe. gov/pub/forecasting/steo/oldsteos/apr00.pdf.

[21]  For a detailed discussion of the expected influence of recent high prices on long-term oil markets, see “Oil Market Volatility: The Long-Term Perspective,” in Energy Information Administration, International Energy Outlook 2000, DOE/EIA-0484(2000) (Washington, DC, March 2000), p. xii.

[22]  Small amounts of access were granted to those plays that had active development in 1999.

[23]  A more complete discussion of the topic of reserve growth for producing fields can be found in Energy Information Administration, The Domestic Oil and Gas Recoverable Resource Base: Supporting Analysis for the National Energy Strategy, SR/NES/90-05 (Washington, DC, 1990), Chapter 3.

[24]  David Pursell, Depletion: The Forgotten Factor in the Supply and Demand Equation: Gulf of Mexico Analysis (Houston, TX: Simmons and Company International, 1998), p. 10.