Abstract
Abstract
World gas supply forecasting has proved difficult because its exploration, transportation, and customer bases are so heavily dependent on fluctuating economic factors. Our recent study showed that the conventional Hubbert model with one complete production cycle is not appropriate for use in forecasting gas production trends for most gas producing countries.
This paper presents our forecast for the world's supply of conventional natural gas to the year 2050. We used a multicyclic Hubbert approach to develop 53 country-specific gas supply models that enable production forecasts for virtually all of the world's gas. The multicyclic modeling approach is presented in a convenient form that makes production data exhibiting two or more cycles easier to model. These models were aggregated to the regional level and to the world level. Supply models for some organizations (e.g. OPEC, non-OPEC, OECD) were also developed and analyzed.
Our results indicate that the world's supply of natural gas will peak in 2014, followed by an annual depletion rate of 1%/yr. A regional analysis indicates that gas production of some regions will peak soon. North American gas production is currently (1999) at its peak. West European gas production is expected to peak in 2002. The countries of the former Soviet Union and Middle East, which comprise about 60% of world's ultimate recovery of natural gas, will be the main sources of world gas supply in the future.
Introduction
Natural gas is becoming an increasingly important source of the world's energy. In recent years, natural gas has become the fastest growing fossil fuel, and it will continue to grow rapidly for several decades. The US Energy Information Administration (EIA)1 reported that the world's gas consumption grows by 3.3%/yr compared to 2.2%/yr for oil and 2.1%/yr for coal. This higher growth rate can be attributed to several factors. First, natural gas, including unconventional gas, is available in abundant quantities in many parts of the world. Second, natural gas is environmentally cleaner than coal and crude oil. Third, the lower price of gas relative to other fuels makes it attractive to many gas operators and consumers.
Fig. 1 shows the U.S. wellhead prices of gas and crude oil since 1949. These data are wellhead inflation-adjusted prices based on 1992 U.S. dollars on an equivalent energy basis. The figure shows that there is a somewhat direct relationship between oil and gas prices, with a time lag of 3 to 4 years. In 1949, the gas/oil price ratio was 0.12, indicating that gas was 12% as valuable as oil on an energy basis. Since that time the trend of this ratio has been increasing generally upward, reaching the value of 0.94 in 1998. This indicates that gas has now reached a close price parity with oil.
The gas industry is influenced by political events, economic factors, and its relationship with the oil industry. Fig. 2 shows the U.S. marketed gas production rate since 1918. The gas production trend from 1918 until 1970 shows an exponential growth. From 1970 to 1973, gas production continued to increase, but at a slower rate of growth. Oil production peaked in 1970. Contributing factors to the slow-down in gas rate increases might have been the oil production decline, which resulted in a decline of associated gas production, and lower gas prices. However, there were gas supply shortages in the very cold winter of 1972–1973. Actual gas production peaked in 1973, the time OPEC cut production of crude oil. Then gas production rates dropped, paralleling the decline in oil production. This drop in gas rate extended to 1975 since the gas market was based on long-term gas sales contracts with stable prices. During the 1975–1979 period, gas production showed slow growth and gas prices became more extensively regulated. In 1979, the Iranian revolution caused oil prices to increase sharply reaching the peak in 1981. This corresponded to an increase of gas prices, which peaked in 1984 (Fig. 1.) The oil/gas price time lag of three to four years possibly resulted from the moderating effect of long-term gas contracts. In 1981, with low gas demand, the " gas bubble" and gas production decreased rapidly until 1986 despite the fact that gas reserves and production capacities were high.