ICF International, an industry consultant, estimated in a report that the U.S. and Canada have 1,500 trillion cubic feet of gas that can be developed at a cost of $5 or less per million Btu. That includes about 800 trillion cubic feet of shale gas, ICF said.
For now, low prices have flattened U.S. gas production as producers divert their resources to drilling for more profitable oil. Yet output still is “kind of hanging in there,” said David Pursell, a managing director at Tudor Pickering Holt & Co. in Houston.
The country’s gas resource “is not endless, but it’s pretty dang big,” Pursell said, and it can be counted on for decades. He said the government should stay out of the way and let the market work.
Daily U.S. gas output is forecast to be 70 billion cubic feet in 2013 and 70.4 billion cubic feet next year, compared with 69.2 billion in 2012, according to a July 9 outlook from the EIA.
The expected growth rate is stronger for crude, which is trading for more than $100 a barrel in New York. The EIA forecasts U.S. daily output will average 7.3 million barrels this year and 8.1 million barrels in 2014, from 6.5 million in 2012.
Hughes said U.S. policy priorities should include measures to reduce energy consumption in transportation, such as encouraging the building of higher-density communities that require shorter commutes.
Gas prices at less than $6 won’t generate as much production as people expect, he said.
“At those prices, gas production will decline in the U.S.,” Hughes said. Production would grow at higher prices, but at a significant cost to the economy. The problem with the hype, Hughes said, is that it predicts we’ll have both: “cheap and abundant.”