The world according to gas A. ODEDRA, 1,2 S. D. BURLEY, 1,3,* A. LEWIS, 1,4 M. HARDMAN 1 and P. HAYNES 1,5 1 BG Group, 100 Thames Valley Park Drive, Reading, Berkshire RG6 1PT, UK 2 Present address: BG North America, 5444 Westheimer, Suite 1200, Houston, Texas 77056, USA 3 Present address: BG India, Sahar Plaza, M.V. Road, East Andheri, Mumbai, India 400 059 (email: stuart.burley@bg-group.com); and Basin Dynamics Research Group, University of Keele, Staffordshire ST5 5BG, UK 4 Present address: BG Norge Limited, PO Box 780, 4007 Stavanger, Norway 5 Present address: BG Canada, 700, 150 6th Avenue SW, Calgary, AB T2P 3Y7, Canada * Corresponding author Abstract: Proven global reserves of conventional natural gas are immense, with some 5500 £ 10 12 SCF recognized world-wide, sufficient for around 60 years supply at current global gas production rates. However, total global growth in demand for gas is expected to average 3.2% over the coming decade and is projected to double by 2025. Along with accelerating liberalization of gas markets, this growth in demand will generate huge opportunities for gas explorers and producers. The exploration and reservoir engineering challenges are to find and produce three times more gas over the next 20 years than the industry has found in cumulative total since 1970. Current estimates suggest that 50% of conventional gas resources have been discovered to date. These resources are well characterized and exploration will have to extend deeper into sedimentary basins, in deeper waters, and in new plays, as well as creatively re-evaluate current acreage, to discover additional conventional natural gas. Tertiary deltas will be a major exploration play over the next decade. In the future, unconventional gas resources will be used increasingly to supplement high volume demand in developed markets and as a major longer-term source of energy. Natural gas in low permeability sandstone reservoirs, coal beds and fractured shale already accounts for more than 25% of natural gas production in the USA. Additionally, enormous volumes of natural gas are generated by methanogenic bacteria during early burial in marine sediments, much of which then contributes to frozen methane hydrates on the continental slopes. At present, much of this unconventional natural gas is categorized as hypothetical and requires fundamental scientific research before it can be considered as an economic resource. Historically, the commercial imperative has been to find gas close to markets. Shipping of liquefied gas, liquid gas derivatives and potentially solid methane hydrates (LNG, GTL and GTS technologies) around the globe, are changing the traditional patterns of gas exploration, transportation and market supply as new producers and demand centres emerge. LNG has already been transformed from a small volume, exotic trade into a sophisticated global market and GTL is likely to follow, opening global gas exploration and production to deep waters and plays far removed from markets. Keywords: natural gas, gas reserves, gas exploration and production, LNG The most immediate problems facing humanity over the next 50 years are recognized internationally as being dominated by the four Es: Energy, Economics, Environment and Education (Simon 1995). Of these, a cheap and effective supply of energy is essential for powering the world’s economies. Global energy use has evolved over the last 50 years from a coal base through oil to being dominated today by natural gas. It is debatable when the switch in emphasis from oil to gas took place, but most commentators now suggest that the age of natural gas has arrived (Holditch 2001; EIA 2003; NPC 2003). Indeed, natural gas is increasingly the fuel of choice. It is the cleanest of all the fossil fuels, is abundant and relatively cheap, providing stability of supply, and proven global reserves are sufficient for some 60 years supply (BP 2003). However, it has not always been so. During the first half of the twentieth century there was little use for natural gas. It was considered a by-product of oil production and priced so cheaply that exploration was curtailed and new pipelines were financially unviable. Natural gas was either burnt-off as waste or pumped back to maintain reservoir pressure enabling more oil production. But with the huge gas discoveries onshore Netherlands (the Groningen gas field has, for example, some 97 £ 10 12 SCF of recoverable reserves) and in the Southern North Sea (estimated in excess of 160 £ 10 12 SCF ultimate recoverable reserves) during the 1960s, natural gas as a source of energy became more pro- minent (Petroleum Geological Circle 1993) and contributed to the status of Britain as a net exporter of energy. Initi ally, European energy policy was considered too important to leave to the market so politicians retained control on supply. All that changed in the 1980s, when the UK Conservative government forced the privatization of oil, coal and electricity industries. In this respect, Britain set the pace for liberalizing energy markets, a practice continuing around the world today. European privatized power companies made a ‘dash for gas’, building new gas power stations. This heralded the start of a rapid decline of coal production in the UK, leading eventually to the closure of all Scotland’s mines and all but one in Wales. By 1990, gas was the preferred fuel for power generation and domestic heating across much of Europe and North America, whilst many industrial and petrochemical plants were powered by natural gas. Despite this demand, in most industrialized nations, and especially the USA, domestic gas production is declining because easily detectable accumulations have been discovered and reserves ODEDRA, A., BURLEY, S. D., LEWIS, A., HARDMAN, M. & HAYNES, P. 2005. The world according to gas. In:DORE ´ , A. G. & VINING, B. A. (eds) Petroleum Geology: North-West Europe and Global Perspectives—Proceedings of the 6th Petroleum Geology Conference, 571 – 586. q Petroleum Geology Conferences Ltd. Published by the Geological Society, London.