Hodel: Natural Gas Reserve Estimates Bound to Change

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WASHINGTON (AP) - More than two-thirds of a 40 percent decline in estimates of gas remaining to be discovered onshore in the United States results from not counting some of it, Interior Secretary Donald P. Hodel said Thursday.

Hodel said he is studying just how the preliminary new oil and gas reserve estimates of the U.S. Geological Survey were ``very unwisely'' released, but he is not inclined at the moment to demand new procedures or punish anybody.

Speaking to a luncheon of directors of the Mid-Continent Oil and Gas Association, Hodel said ``it's guaranteed'' that the new figures showing a 40 percent decline in both undiscovered oil and gas will change after review.

Asked by reporters how the figures would change, Hodel said, ``there's no way for me to guess'' what will result from public and scientific comments on the new estimation methods used by the survey, an arm of the Interior Department.

``I think the perception might be in the end that the numbers have gone up'' from the first estimate because the exclusions will be understood, he said.

Exclusion of gas categories used in the earlier 1981 estimates, such as gas found in ``tight sands'' reservoirs and gas below 15,000 feet ``accounts for over two-thirds of the reductions,'' Hodel said in his speech.

Such gas is expensive to produce, and the price decline since 1981 could make it uneconomic.

The survey already has acknowledged that if comparable categories are included, its estimates would be close to those used by the gas industry. But there has been some movement of oil and gas from the ``undiscovered'' to ``discovered'' categories, and some lowering of estimates because drilling found nothing.

The industry has been particularly upset with the new figures. It can produce far more gas than customers are buying and is trying to gain markets with the proposition that gas is plentiful.

The estimates were contained in a geological seminar presentation in Denver earler this month and in an abstract of the presentation. …