Even as oil and natural gas production in Texas and the United States have been increasing rapidly, new data from the U.S. Energy Information Administration indicates that proved reserves are also hitting record highs. Basically, weÐÔÊӽ紫ý™re finding new reserves faster than we can extract them from the ground.
Proved reserves are resources projected to be recoverable under existing economic and operating conditions. They are based on geologic and engineering data and can change due to factors such as prices and costs, new discoveries and advances in techniques and technologies.
Total U.S. proved reserves increased 9 percent in 2022 to reach 48.3 billion barrels at year-end, while production was up 6 percent (and 2023 U.S. output exceeded the annual total for any country in history). Texas, which has more proved reserves than any state, saw the largest absolute increase in 2022 (9 percent or 1.7 billion barrels). New Mexico proved reserves increased by an impressive 26 percent (1.3 billion barrels).
Proved reserves of natural gas increased 10 percent during 2022 to reach 691.0 trillion cubic feet (Tcf), led by Alaska, Texas and New Mexico. When the universe is expanded to encompass reserves that are technically recoverable (but not yet practical at current prices), the Permian Basin alone has centuries of known supply despite the facts that (1) current approaches only capture 8 percent of the amounts in shale formations and (2) the U.S. Geological Survey indicates that substantial quantities are not yet identified.
About 80 percent of the energy consumed in the United States is from fossil fuels, and about 40 percent of electricity is generated using natural gas. Clearly, itÐÔÊӽ紫ý™s important to our quality of life and energy security that we have a large and growing domestic supply even as we address critical environmental concerns.
Climate issues and policies are (properly) omnipresent, but we should note two key facts. First, total energy-related CO2 emissions are falling, down about 20 percent over the past two decades despite increasing demand.
One reason is solar and wind power generation, but another is natural gas displacing coal (down from about 50 percent to less than 20 percent of domestic power generation). Coal combustion is significantly more carbon-intensive than burning natural gas, with switching thus providing a huge dividend for climate conditions.
Second, CO2 captured from industrial sources (including natural gas processing facilities, coal-fired generation plants, petroleum refineries, and even the air) can be used to responsibly enhance oil recovery. This win-win is already happening, and there is ample room to accelerate it.
Fossil fuels will remain essential for the foreseeable future, which is not something to lament. The energy industry is also a vital part of the solution, with the capability and incentive to dramatically improve emissions profiles and generate further advances.
