On Wednesday, the U.S. Energy Information Administration (EIA) updated its estimates of America's proved reserves of oil and natural gas for 2010. Here's a summary of the key findings:
1. Proved reserves of both oil and natural gas in 2010 rose by the highest
amounts ever recorded in the 35 years EIA has been estimating U.S. proved
2. Technological advances in drilling and higher prices contributed to
gains in reserves. The expanding application of horizontal drilling and
hydraulic fracturing in shale and other "tight" formations, the same technologies that spurred substantial gains in
natural gas proved reserves in recent years, played a key role.
Further, rising oil and natural gas prices between 2009 and 2010 likely
provided incentives to explore and develop more resources.
3. Oil proved reserves rose
12.8% to 25.2 billion barrels in 2010, marking the second consecutive
annual increase and the highest volume since 1991 (see chart above).
4. Natural gas proved
reserves (estimated as "wet" natural gas, including natural gas plant
liquids) increased by 11.9% in 2010 to a record-high 317.6 trillion cubic feet (Tcf),
the twelfth consecutive annual increase, and the first year U.S. proved
reserves for natural gas surpassed 300 Tcf (see chart above).
5. Proved reserves reflect volumes of oil and natural gas that geologic and
engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs under existing
economic and operating conditions.
provides this commentary on the EIA report:
"Most impressively, proved gas reserves in 2010 were up 50% compared to
the 2005 number or the 1980 number. That's right, our proved gas
reserves are 50% higher in 2010 than 30 years ago, despite using a lot
of gas during that 30 year period.
Indeed, during the last 30 years, the country consumed more than double
the amount of our 1980 proved gas reserve number. How could that be? Exploration and production activities are never ending. They keep
filling the U.S. natural gas cup that has never emptied and is now
So our proved reserves of natural gas have gone up for 12 straight years, increased during
2010 by the highest amount in 35 years, and are 50% higher than in 2005
The EIA's significant upward revisions for proved reserves of U.S. oil and gas provide more evidence that America's job-creating, game-changing, economic-stimulating energy bonanza
just keeps getting better and better all the time.
As Walter Russell Mead
"Nature — or perhaps Nature’s God — seems to love mocking pundits.
Just when the entire punditocracy, it sometimes seemed, had bought into
the “American decline” meme, Europe collapsed and huge energy reserves
were discovered underneath the United States. The “special providence”
that observers have from time to time discerned in America’s progress
through history doesn’t seem to be quite finished with us yet."