How Much Natural Gas is Left? Not Enough to Be a Long-Term Solution

 

     BP, in their most recent Statistical Review estimated that we have 52.8 years left of natural gas reserves. That was a 2021 estimate so that means supply could run out before 2073. Now, we can probably assume that new reserves will be found, and technology can continue to increase recovery rates. That could potentially add another 10 years or more. Globally, in 2021 natural gas accounted for 32% of primary energy and 38% of electricity production.

     Most energy use scenarios going forward suggest that natural gas consumption will continue to rise modestly. Global natural gas consumption has risen steadily since the late 1990’s, doubling since the mid-1990’s, less than 30 years ago. At current consumption rates and at current reserve estimates, annual natural gas consumption represents about 1.9% of global reserves being consumed in a year. With consumption still rising, in just a few years that consumption could represent 2.5% of reserve estimates, or 25% of reserve estimates at that flat rate over a decade. That means, with increased consumption, natural gas could run out in as little as 40 years – 2061. Thus, with added reserves due to new finds and technology improvements combined with likely increased demand, 2073 is likely a fair estimate for when we might run out of natural gas. However, when supply begins to be constrained, prices will rise. If other suitable alternatives are available, which is not a given since wind and solar cannot match the reliability and dispatchability of natural gas, then natural gas consumption will fall.

 

 Data Source: Statista

     US natural gas proved reserves have risen in recent years from lows of about 200 TCF in the mid-1990’s to 625 TCF at year-end 2021, according to the US Energy Information Administration. Thus, US proved reserves represent about 8.4% of global proved reserves. At the beginning of the “fracking” revolution US natural gas proved reserves were a little less than half of what they are now, so one could estimate that the US fracking revolution thus far has added about 4% or so to global reserves. It should be noted that about 10% of the total US proved reserves was an increase just in 2021 (63TCF) in Alaska that was previously considered stranded before development of the Alaska LNG Project which can bring them online.

     Thus, when fossil fuel advocates like Alex Epstein say that fossil fuels will power us for generations to come that might be a bit deceiving. How many generations fit into 52.8 years? A generation is usually considered to be 30 years so that means natural gas will last less than 2 generations and that is if it can still be produced economically after the best resources get used up first. I know there are other reserve estimates that predict natural gas could last 100 years, but with continued increasing demand I am skeptical of those being obtainable at reasonable cost. Even 100 years is just a little more than 3 generations.

     With these numbers natural gas supply could begin to be constrained as soon as 2050 or sooner. Bringing new supplies online takes time, sometimes a decade or more for offshore projects. With decreased investment in recent years due to commodity prices, energy transition pushes, regulatory challenges, and stranded asset uncertainties, new supply may not meet demand at some point in the future. If prices rise and new drilling booms manifest, that will bring a new set of challenges.

     What is the solution? I don’t know but we do need to continue deploying wind and solar smartly. I think nuclear is our best bet, but I also think we need to get a move on that, streamline permitting, cut regulatory approval times, and start deploying. Small modular reactors can be a game-changer but will take time. It looks like they will take off in the 2030’s but to get enough deployed to offset natural gas demand could take another 20 years or more. We could always fall back on coal, where global reserves are estimated at 132 years but that would be quite regressive and way out of line with current goals and actions. Geothermal cannot add much, nor can hydro, biomass, or green hydrogen.

     As Robert Bryce has long advocated, our best course of action for power production is natural gas to nuclear. Oil reserves too are estimated at 50 years or so. Thus, transportation and heavy industry will have to adapt to higher prices at some point and with the shift to EVs, that will require more grid power which could well mean increased natural gas consumption in the near-term beyond the level of increases seen in the last 30 years. Building new natural gas plants now and in the near to medium term can be good, especially new generation combined-cycle plants with highly efficient turbines. However, these will likely be the last generation of natural gas plants. I don’t see anyone building new gas plants beyond say 2050 or so – not due so much to the energy transition but due to obtaining gas supply at reasonable prices going forward. Natural gas is a great solution in the near term, but it won’t last forever, and we need to consider how we are going to be reliably powered in the future.

 

References:

 

BP Statistical Review of World Energy – 2022. Statistical Review of World Energy 2022 – US (bp.com)

 

Natural gas consumption worldwide from 1998 to 2021. Statista. July 2022. Global natural gas consumption 2021 | Statista

 

Proved reserves of natural gas increased 32% in the United States during 2021. US Energy Information Administration. January 30, 2023. U.S. Energy Information Administration - EIA - Independent Statistics and Analysis