Geology and Technology Drive Estimates of Technically Recoverable Resources

A common measure of the long-term viability of U.S. domestic crude oil and natural gas as an energy source is the remaining technically recoverable resource (TRR). TRR estimates are a work in progress, changing as more production experience becomes available and as new technologies are applied to extract these resources. The greatest uncertainty is associated with the "estimated ultimate recovery," or EUR, per well.

EIA updates its TRR estimates using the latest available well production data. EIA's recently released Annual Energy Outlook 2012 (AEO2012) contains a detailed discussion of TRR estimates and resource uncertainty. AEO2012 projections also include sensitivity cases varying the EUR per well and a high-TRR case. The TRR estimates provide context for the size of the resource, while projected production depends strongly on the number of wells, the EUR per well, other well characteristics, and economics.

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TRR estimates consist of "proved reserves" and "unproved resources." As wells are drilled and field equipment is installed and productivity is assumed, unproved resources become proved reserves and, ultimately, production. The TRR estimate for a continuous-type shale gas or tight oil area is the product of land area, well spacing (wells per square mile), percentage of area untested, percentage of area with potential, and the estimated ultimate recovery (EUR) per well.

The Annual Energy Outlook 2012 unproved TRRs are shown in the figures above for the major shale gas and tight oil formations. The formation parameters that result in these TRR are provided elsewhere. The volume of total TRR due to proved reserves is not shown. "Tight oil" refers to crude oil and condensates that are produced from low permeability sandstone, carbonate, and shale formations. The tight oil TRRs are for the entire formation, including the non shale portions.

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