BT Staff, Bulk Transporter | January 6th, 2023Higher prices for crude oil and natural gas in 2021 contributed to higher proved reserve estimates, including a 16% increase in oil reserves
Proved reserves of natural gas set a record in the United States in 2021, and proved reserves of crude oil and lease condensate increased, but not quite to pre-pandemic levels, according to the U.S. Energy Information Administration.
Energy demand had risen from the 2020 lows that resulted from the COVID-19 pandemic, pushing up prices and making more U.S. resources economically viable.
Proved reserves are operator estimates of the volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, EIA explained in the recent news release.
Estimates of proved reserves are heavily influenced by prices. Higher 2021 prices for crude oil and natural gas were a contributor to higher proved reserve estimates.
The 12-month, first-of-the-month average spot price for West Texas Intermediate (WTI) crude oil at Cushing, Oklahoma, increased by 67% from $39.66 per barrel in 2020 to $66.26 per barrel in 2021. Texas, where more proved reserves of crude oil and lease condensate are located than any other state, saw the largest net increase in proved reserves in 2021, when Texas’s annual crude oil and lease condensate proved reserves increased by 12% (1.9 billion barrels) from 16.7 billion barrels to 18.6 billion barrels. New Mexico saw the second-largest net increase of proved reserves of crude oil and lease condensate (39%, 1.4 billion barrels), and Alaska saw the third largest (31%, 0.7 billion barrels).
The 12-month, first-of-the-month average spot price for natural gas at the U.S. benchmark Henry Hub in Louisiana increased by 84% from $1.99 per million British thermal units (MMBtu) in 2020 to $3.67/MMBtu in 2021. Alaska had the largest increase in proved reserves of natural gas in 2021 (173%, 63.3 trillion cubic feet), which almost tripled the state total compared with 2020. Texas had the second-largest increase of natural gas proved reserves in 2021 (30%, 34 trillion cubic feet). New Mexico had the third-largest increase of natural gas proved reserves (38%, 10 trillion cubic feet).
The full Proved Reserves of Crude Oil and Natural Gas in the United States, Year-End 2021 report is available on the EIA website.