Just as football fans have been eagerly anticipating the start
of the NFL draft, followers of the U.S. energy
have been looking forward to the release of the U.S. Energy
Information Administration's 2012 Annual Energy Outlook.
OK, so no one is actually sitting on the edge of their seats
to see what the federal agency thinks will happen in the
electricity generation sector in the same way they are waiting to
see where Andrew Luck and Robert Griffin III will be drafted, but
there will still be a lot of very interesting information
contained in the report, which will be released sometime this
Earlier this year, the EIA made available an
early release overview of the report
and some of the findings were surprising to say the
Probably the most eye-popping of the changes between the 2011
report and what has been released about the 2012 one is the
downgrade of estimates of shale
reserves in the country.
In 2011, the EIA estimated that the U.S. had 827 trillion
cubic feet of shale gas reserves, but the 2012 report slashes
that figure to 482 trillion, a reduction of 42 percent.
That reduced estimate drastically changes America's place on
the list of country's with the top shale gas supply. According to
the EIA's World Shale Gas Resources report from April 2011, the
U.S. had the second highest technically recoverable shale gas
resources on the planet, behind only China, which was estimated
to hold 1.275 quadrillion (yes, quadrillion) feet of the
Now, using the U.S. estimates from the 2012 Annual Energy
Outlook report and global estimates from the 2011 shale gas
report, America has just the fifth most shale gas in the world.
The country's whose estimates leap-frogged the U.S. were
Argentina (774 trillion cubic feet), Mexico (681 trillion) and
South Africa (485 trillion).
The chief cause of the drastic downgrade was a serious
revision of the estimated size of the Marcellus shale, which
covers parts of New York, Pennsylvania and Ohio and most of West
Virginia, among other states.
In 2011, the EIA estimated that the Marcellus contained 410
trillion cubic feet of recoverable gas but that figure has been
reduced 66 percent to 141 trillion. Still the Marcellus might not
be a bust on the scale of failed Chicago Bears running back
Curtis Enis, and a more apt analogy may be current free agent
tailback Cedric Benson, who after a few disappointing seasons
ended up a successful NFL player, although he still never lived
up to the expectations of a fourth overall pick.
The EIA said that the revised Marcellus estimates were due to
more data becoming available.
"Drilling in the Marcellus accelerated rapidly in 2010 and
2011, so that there is far more information available today than
a year ago," the department said. "Indeed, the daily rate of
Marcellus production doubled during 2011 alone."
And the EIA isn't the only government agency that has bad news
for the Marcellus.
reports that the U.S. Geological Survey said earlier this year
that it might cut its estimate of undiscovered
in the shale play by 80 percent after it received updated
The U.S. is clearly still in a strong position to become a
exporter of natural gas (something the Department of Energy
estimates will take place in 2021), but the future for shale gas
development certainly looks to take a big hit from the upcoming
This serves as a reminder that in the shale gas game, just as
in the NFL draft, one shouldn't count their chickens before their
hatched (or wells before their fracked).