The world production of natural gas from conventional sources was projected parabolically based upon data posted on the Web in advance of the publication of the U.S. Geological Survey World Petroleum Assessment 2000 - Description and Results in a procedure similar to that followed in a previous companion paper dealing with oil. The Year 2000 Assessment of undiscovered oil and gas resources was published at the time of the 16th World Petroleum Congress held in Calgary, Alberta, 11-15 June 2000 (DDS-60). The main purpose of this paper is to estimate the timing and magnitude of the peak in conventional natural gas production for the world as a whole. The Mean Value of the Assessment was employed in the parabolic calculation in two ways because of the uncertainty concerning a large quantity termed `natural gas reserve growth'. Gas in this category was assumed to contribute to output only after the peak has passed at one extreme (Case 1) and to be continuously available throughout the production period in the other (Case 2). The actual production is likely to lie between these two limiting cases.
In two sensitivity tests, conventional gas production based on the smaller resources expected at 95% probability and for the larger resources expected at 5% probability were calculated as Cases 3 and 4 respectively. These cases represent two extremes of the assessment values. In Case 1, world conventional natural gas production was projected to peak at 106.57 trillion cubic feet per year (T/yr) per year in 2041.1; for Case 2 - 116.30 T/yr in 2055.5; for Case 3 - 99.24 Y/yr in 2030.3; and for Case 4 - 116.42 T/yr in 2055.7. Cumulative and per capita data were also calculated from these four parabolic projections.
In view of the growing importance of this convenient fuel, the same parabolic projection methodology was applied to resources of natural gas it was to oil in the companion paper.2 The main object was to estimate the timing and magnitude of the peak in production of gas expected in the middle decades of the new century. Though by far the greater proportion is derived from conventional sources at present, production from non-conventional sources, such as the methane derived from coal seams in the U.S. and some other countries, may be of growing importance in Canada and elsewhere in the future. These non-conventional sources of supply are not considered in this paper.
The parabolic method for projecting petroleum production was originally devised to focus on the timing of the peak in output of oil derived from conventional sources as there are good reasons to believe that the world energy system will behave differently once this point has passed.3 This technique differs in two main ways from such methods as devised classically by Hubbard4 and more recently by Duncan and Youngqvist.5 First, the future is not determined by the history of past production over time before a certain chosen `staging' date. The Staged Parabolic Method does depend, however, on the production pattern after this date. Second, this technique employs geological assessments to define the parabola: ultimate oil resources are not estimated from the past record of production over time. These differences also apply to the natural gas case in this paper.
The U.S. Geological Survey has long been a leader in the assessment of undiscovered petroleum resources. In 1995, it released an authoritative assessment of the United States oil and gas resources6 (results available on one CD-ROM), and the new assessment of the world as a whole requires a 4 CD-ROM set to hold this extensive study.7 This more recent study reported an increase in the world's oil resources of some 20% but a slight decrease in the corresponding gas resources as compared to the earlier assessements of the U.S.G.S. In March of 2000, an understanding was reached with the International Energy Agency whereby the U.S.G.S. will be recognized as the main source of information in this field for this multilateral organization.
The preliminary results from the Year 2000 Assessment were posted on the Web in advance of publication and give the Mean Value for undiscovered conventional natural gas for the world as a whole as 5196 trillion cubic feet (T), ranging from 2691 T at 95% probability and 8871 T at 5% probability. The category termed `natural gas reserve growth' was placed at a high 3305 T for regions outside of the U.S. Adding 322 T to this value taken from the 1995 Assessment6 for the U.S. itself leads to a world total of 3627 T for natural gas resources in this category. These values were employed in the calculations that follow.
Although the resources of gas may be somewhat more widely distributed around the world than those of oil, there are locations with significant quantities of `stranded gas' that must await market opportunities including the large-scale conversion to liquid fuels. Consequently there may be regions of the world with surplus resources at the same time it may be necessary in other places to turn to non-conventional sources of gas, if not other fossil and non-fossil options, to meet energy needs. To the extent this situation persists, the parabolic projections will be misleading.
In this paper, the cumulative production was calculated as 2265.3 T to 1998 based upon the value given by Masters et al8 of 1523.6 T to 1988 and with the addition of subsequent yearly data as reported in the BP Amoco Statistical Review of World Energy. The reserves were taken as 5170.3 T as published to the end of 1998 without reservation. There are reasons for believing this value may be overstated, or that it is not consistent with strict definitional rules in all countries, but this issue is not explored here. The U.S.G.S. estimates of undiscovered resources were then added to the sum of these values and the parabolas derived. The natural gas reserve growth was interpreted in two different ways for the Mean Value of the resources. In Case 1, this addition to reserves was only considered effective after the peak in production was passed but in Case 2, it was included throughout the full production cycle. Cases 3 and 4 were sensitivities based upon the smaller value of the resources expected at 95% probability and the larger value at 5% probability which represent the broad limits of the undiscovered resource base. The natural gas reserve growth term was included only after the peak in the latter two sensitivity cases as in Case 1.
For each of the four natural gas cases calculated, a check was made on the quantity of gas produced between the Staging Date of 1988 and 1998, the last year for which actual production data was available. Ideally, the area defined by those two years on the parabola should equal the actual cumulative production between those years. In Case 1 the check was 0.77%, in Case 2 - 0.84%, in Case 3 - 0.67%, and Case 4 - 0.84%. This level of agreement was considered satisfactory. This check is more difficult to achieve in the case of natural gas than oil because of the greater fluctuations in the production of gas from year to year.
The rationale for dealing with the reserve growth in this way was the same as in the case of oil. Moreover, since the peak for conventional natural gas production occurs later than that for conventional oil for all four of the cases calculated, the energy price regime is expected to be both higher and more rational earlier in the gas production cycle. These more favourable financial conditions should justify the greater cost of the advanced exploration and production techniques needed to recover this extra gas. Furthermore, there is more time for these additional resources to be exploited before the peak is reached in the gas supply system than in the corresponding oil case. For these reasons, the assumption of no participation of the reserves growth in production before the peak is reached is less certain than in the oil case and no doubt introduces some error. Case 1 must therefore be considered as one of the limits. Case 2 is the limit at the other extreme where the reserves addition is assumed as active in the supply of gas throughout the whole production period. The actual situation should lie between these two Cases.
Two curves appear in the Case 1 Figure for the post-peak period. The upper curve represents the effect of the growth in reserves and the lower curve the expected track of production if there were no such addition. It is thus possible to estimate the effect of more modest additions to the reserves by interpolating between these two curves.
The historical gas production data plotted was taken from the BP Amoco Review of World Energy for 1969 and later years. There is no particular reason for the historical points in the figure to lie on the parabola before the staging date of 1988; the agreement shown is coincidental and arises from the accidental approximate equivalence of the cumulative production to 1988 and the area of the overlap zone shown on the figure. Only after that time should the parabola expected to track the actual output. In contrast to the corresponding historical oil case, the production of natural gas increased fairly regularly through the troubled period of the 1970s for the energy economy.
This case should be considered the opposite extreme as compared to Case 1 when the reserves addition was only operative once the peak has passed. The actual output is expected to lie between these two limits but nearer Case 1.
From the point of view of estimating carbon dioxide emissions from projections of conventional natural gas production, there is little difference among the cases until after the mid-point of the century has passed.
Historical values for per capita world natural gas production are also plotted in Figure 6. These values have increased more or less regularly in the previous decades and were less affected by the severe dislocation in the world energy system at the time of the energy crises of the 1970s.
The yearly production for Cases 1- 4 are plotted in Figure 6 on a per capita basis past their respective peaks until 2070. For Case 1, the per capita production remains more or less constant through the century. Only in Cases 2 and 4 is there an increase. In Case 4, the increase in per capita production by 2070 over 2000 is of the order 11%. In Case 3, the per capita production falls throughout the century. The full implications of this effect are not clear as yet, but these results suggest the world per capita production of conventional natural gas can only increase about 11% in the most favourable case.
Because the peak in the world conventional natural gas system will occur after the corresponding peak in the world oil system, much of the natural gas resource will likely be produced in a higher and more stable price environment. This advantage may permit the large-scale conversion of stranded gas to liquids (including the methanol already synthesized) useful in the transportation sector. For this reason, the Staged Parabolic technique probably understates the magnitude of the peak somewhat as this spare capacity comes into service one way or another as the peak in world oil production is past. The timing of the peak, however, may only shifted by a matter of months by this effect. The figures have been prepared in a form which allows the production data to be plotted easily as the years pass to provide a visual record.
As in the case of oil, the question of the large category termed the `natural gas reserve growth' appearing in the U.S. Geological Survey Year 2000 Assessment also requires further consideration. In this paper only one value was available for all the cases studied though this reserves addition would be expected to vary in actuality in some way with the size of the resource endowment. This problem is more acute in the case of natural gas because there is more time for the reserve addition to be brought into play before the peak in production is reached than in the corresponding oil cases. As with oil, the whole question of world reserves requires more attention as it is probably true that these are overstated in terms of a strictly defined definition of this category. In the case of Canada, the National Energy Board expects conventional natural gas supply to either peak or plateau in the 2008-2013 period over a wide range of assumptions despite the advent of production from the eastern off-shore unless prices are markedly higher than the Board expects.9 After this period, the Board believes that there will be substantial production of gas from non-conventional resources with methane recovered from coal seams identified as the most important such source in the shorter term. This suggests Canada will be turning to non-conventional gas supplies before the peak in world production of both oil and natural gas is reached. This timing suggests non- conventional gas in Canada will be in competition with water-born liquefied natural gas in coastal markets with implications for allowable prices at the site of coal bed methane operations.
Two cases were chosen for the Mean Value of the endowment. In Case 1, with the reserves addition only operative after the crest in world production of conventional natural gas has passed, the peak was found to be 106.57 trillion cubic feet per year (T/yr) in 2041.1. In Case 2, with the reserves addition available through the entire production cycle, the peak was 116.30 T/yr in 2055.5. In the two sensitivity trials, in Case 3 at 95% probability, the peak was 99.24 T/yr in 2030.3 and in Case 4, at 5% probability, the peak was 116.42 T/yr in 2055.7.
Cumulative and per capita production were also calculated for all cases. Over a wide range of assumptions, the cumulative production of conventional oil does not differ much among the cases before mid-century which facilitates the estimation of carbon dioxide emissions from this important fossil fuel at least in the medium term. Based upon a plausible world population scenario, per capita availability of conventional natural gas per capita stays essentially constant in Case 1 and only rises in Cases 2 and 4 by a maximum of about 11% over present values. Per capita availability in Case 4 falls continuously through the century.