Natural Gas Update: Challenges Persist

The Gulf of Mexico represents about one-third of the Lower 48 increase in 2010, and is particularly interesting when you look at it a little closer.

The Shelf, which has been the bread and butter of the industry, represents almost 25% of current supply, and we project will decline over time at approximately 3% per year.

The projected offsetting increase out of the Gulf production will come from the deepwater, with that source growing from under 1 TCF per year to over 4.5 TCF per year by 2010. This increase in production is driven by advances in technology as well as increased activity generated by lower federal royalties from 1995 through 2000.

Key Issue: Is the decline on the Shelf sharper than the NPC Study projected?