A recent report from the Energy Information Administration indicates that a combination of higher prices, shale development, and tight resources drove U.S. crude oil and natural gas reserves to new records in 2017.
Proved reserves of U.S. crude oil increased 19.5%, reaching 39.2 billion barrels. The previous peak level was 39 billion barrels, in 1970. Proved reserves of natural gas increased 36.1% to reach 464.3 trillion cubic feet (Tcf). The previous high was reached in 2014, with 388.8 Tcf.
"Proved reserves" refers the volumes that geological and engineering data demonstrate to be recoverable years down the line from known reservoirs under current operating and economic conditions. Changes in proved reserves from year to year reflect new discoveries or adjustments to previous reserve estimates, along with reductions from annual production.
Higher fuel prices have historically driven up estimates, as operators then consider a broader portion of the base economically producible since they can recover any investment more quickly. In 2017, the annual average spot price for crude oil increased by 20%.
New Mexico and Texas had the largest net increases in proved reserves of crude oil in 2017, adding 3.1 billion and 1 billion barrels of proved crude oil reserves. Increases in these states were primarily the result of increased crude oil prices and developments in the Permian Basin.
The annual average price for natural gas also increased last year. Pennsylvania added 28.1 Tcf of natural gas proved reserves, the largest net increase among all states. This was the result of increased prices and developments in the Marcellus and Utica Shales. Texas had the second-largest net increase in natural gas proved reserves.
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