Decline in conventional natural gas reserves in the US
Between the mid-1960s and the mid-2000s, proved natural gas reserves in the United States fell by one-third, the result of restrictions on drilling and other supply constraints.
Starting in the 1990s, government promoted the use of natural gas as a clean fuel, and with fixed supply and rising demand from electric utilities, a natural gas supply shortage occurred, causing prices to rise from an average of $1.92 per thousand cubic feet in the 1990s to $7.33 in 2005.
Rising prices were exacerbated by the effects of hurricanes Katrina and Rita in 2005, which sent prices over $12.00 per thousand cubic feet for several months due to damage to gas production facilities.
As illustrated in the figure above, conventional natural gas production is projected to decline while unconventional natural gas production such as coal-bed methane, tight gas, and shale gas in particular.
- American Chemistry Council, “Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs, and US Manufacturing,” March 2011.