Undiscovered Oil and Gas Resources An Evaluation of the Department of the Interior's 1989 Assessment Procedures (1991) / Chapter Skim
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4 Recommendations
4 Recommendations
Pages 98-108
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From page 98... ...
Because of the complex, interdisciplinary nature of resource assessments, outside review of assessment procedures is critical to ensuring that evaluators have correctly applied the most up-to-date geological and statistical appraisal methods. This chapter summarizes the committee's most important recommendations related to the 1989 assessment.
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From page 99... ...
The failure to include estimates of unconventional natural gas in addition to the estimates of conventional natural gas obscures a significant portion of the potential domestic energy supply. The committee also found that the assessment's limitation to recoverable resources made the estimates unnecessarily sensitive to future changes in recovery technology.
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From page 100... ...
The absence of a permanent assessment group created the following problems: · a lack of staff experience in resource assessments and insufficient knowledge of regional geology in some provinces; · a distribution of personnel among the provinces that did not correlate with the provinces' potential for containing undiscovered oil and gas or with the amount of data available for analysis, with a concentration of attention on the Rocky Mountains, California, and Alaska and a comparatively low level of effort in the Gulf of Mexico, Midcontinent, and Illinois Basin areas; · the lack of a clear explanation of how the 1989 assessment methodology compared to methodologies used in previous assessments; · an absence of a clearly defined assessment procedure that was unambiguously understood by all members of the assessment team; · insufficient statistical support for data analysis; and · a lack of provision for improving assessment methodologies or testing the sensitivity of the methodologies to critical input parameters. The MMS avoided some of these problems by maintaining a permanent resource assessment group.
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From page 101... ...
After reviewing the USGS's data, the committee found that the USGS lacked adequate seismic data for the lower 48 states and also for Alaska's North Slope. In addition, the committee found that the information compiled by USGS assessors into basin reports varied in scope and quality, and that the preparation of this information did not occur for all basins as an established, early part of the assessment process.
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From page 102... ...
Also important in play analysis is the consideration of conceptual plays: those that do not contain discoveries or reserves, but that geological analysis indicates may exist. Analyzing conceptual plays is especially important for assessing natural gas, because natural gas exploration is less mature than oil exploration.
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From page 103... ...
Once it has formulated plays appropriately, the MMS should institute testing to ensure that play mixing does not significantly alter resource estimates.
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From page 104... ...
The USGS's method for extrapolating discovery data to determine the number and size distributions of undiscovered fields in a play relied principally on subjective judgment. Extrapolations were based on observations about the way the shape of the undiscovered field-size distribution changes with time~observations obtained by fitting sizes of discovered fields to truncated shifted Pareto distributions (see Chapter 2, under Assessment Methods, for an explanation of this procedure)
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From page 105... ...
In addition to overlooking these possible probabilistic dependencies, the MMS may have unintentionally imposed economic constraints on calculations of technically recoverable resources. For example, in Alaska the MMS excluded from its technically recoverable resource estimate prospects that were smaller than one-half a leasing block.
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From page 106... ...
Recommendation: To avoid unintended double discounting, the MMS should develop methods for separating technically recoverable resource calculations from those that determine the volume of economically recoverable resources. Recommendation: Both the USGS and the MMS should conduct statistical studies of risk factors, field-size distributions, prospect drilling outcomes, and other play attributes to determine whether assumptions of probabilistic independence are justifiable.
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From page 107... ...
Emphasizing to users the whole range of potential resource values-not just a point estimate is especially important in Alaska because of the limited data available there and because Alaska contains such a potentially large share of the undiscovered resource base (26.9 percent of technically recoverable undiscovered oil and 22.7 percent of economically recoverable undiscovered oil, calculated with mean values)
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From page 108... ...
Incorporating the committee's recommendations in future resource assessments is likely to result in significant changes in the estimates of undiscovered oil and gas. The committee believes the overall impact will be to increase both the point estimates and the breadth of the range of estimated resource volumes.
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