Assessing Gas and Oil Resources in the Intermountain West: Review of Method S and Framework for a New Approach

The authors examine four recent traditionalassessments of the nation's potential supply of natural gas and oilresources. They suggest a new methodology: estimating viable resource,which is the gas and oil resource that is available when exploration andproduction costs, infrastructure and transportation costs, and environmentalimpacts are considered. This methodology will be used in future research onspecific geographic areas.The authors examine four recent traditional assessments of the nation'spotential supply of natural gas and oil resources. The assessments were doneby the U.S. Geological Survey National Oil and Gas Resource Assessment Team,the Minerals Management Service, the National Petroleum Council, and thePotential Gas Committee. Although the assessments vary, they each indicatethat the Intermountain West contains substantial natural gas and oilresources. Traditional resource assessments, however, are intended toestimate the technically recoverable resource, which does not reflect theamount of resource that can realistically be produced. This report lays thefoundation for determining the viable gas and oil resource: that which isavailable when exploration and production costs, infrastructure andtransportation costs, and environmental impacts are considered. The nextstep in the research will be to apply this methodology to estimate theviable resource in individual geographic areas. The analysis will specifythe relationships among gas and oil deposits, technological options,economic costs, infrastructure requirements, environmental impacts, andother variables to allow for a comprehensive assessment of the viable gasand oil resource.

Tom LaTourette (Ph.D., California Institute of Technology) is an associate physical scientist at RAND.

MARK ALLEN BERNSTEIN (Ph.D. 1984, University of Pennsylvania, Program: Energy Management and Policy) is a senior policy analyst at RAND.

Katherryn Anderson (Wesleyan University, Middletown, CT B.A. Psychology) is a research assistant at RAND.

DEBRA S. KNOPMAN (The Johns Hopkins University, Baltimore, Maryland: Department of Geography and Environmental Engineering, Ph.D., 1987) is an Associate Director, RAND Science and Technology at RAND.