Periodic estimates of the quantity and geographic location of the potential natural gas resources remaining to be discovered, developed and produced in the United States have been made by the Potential Gas Committee. These estimates, however, cover a wide range of geographic conditions, depth subdivisions and variations in the cost of exploration and drilling. The principal objective of this study, sponsored by the Gas Research Institute and the Electric Power Research Institute, is to develop an econometric and resource modeling methodology to evaluate the relative costs of development of the natural gas resource potential which has been estimated by the Potential Gas Committee, and to present these relative cost data in such a way that meaningful comparisons can be made between alternate resources of natural gas. The economic investigations in this study have been concentrated upon two main components: a drilling cost mod and a discovery process model. A modification to a previously developed model has been prep to estimate the discovery rates of natural gas based upon the Potential Gas Committee estimate of ultimate natural gas resource and the previous exploration history (actual or analog) of a geological province. The econometric model will be calibrated province. The econometric model will be calibrated by comparisons with the subjective estimation of resource distribution by Potential Gas Committee members, and a consensus discovery rate would be derived. The drilling cost model will be used to translate the exploratory and development efforts into present constant dollars. Introduction Since the early 1960s, the Potential Gas Committee has made periodic estimates of the potential natural gas resources remaining to be discovered, developed and produced in the United States. In recent years these estimates have been made for each of 18 geographic areas, both onshore and offshore. For onshore areas, separate estimates have been made for the potential resource which is believed to exist at depths shallower than 15,000 feet and for that which is believed to exist at depths between 15,000 and 30,000 feet. In offshore areas, separate estimates have been made for the resource which is believed to exist from the shoreline out to a water depth of 200 meters and from a depth of 200 meters out to a total water depth of 1,000 meters. These estimates by the Potential Gas Committee have served as a reasonable evaluation of the U.S. resource potential, and the estimates have received wide credibility throughout the country in both the industrial and political sectors. However, the estimates cover a wide range of geographic conditions as well as variations in the cost of exploration and drilling. Because of such factors as deep versus shallow occurrence and the additional cost of drilling in deep offshore waters as compared to inshore waters or onshore locations, it has not always been possible to make meaningful comparisons of the possible to make meaningful comparisons of the relative costs of recovery of natural gas from the conventional resources in various parts of the country, and, further, to compare these relative costs with the costs of development of nonconventional natural gas and synthetic natural gas and with the costs of alternate energy sources. The Mineral Resources Institute of Colorado School of Mines has undertaken a project to estimate the relative costs of development of the U.S. Natural gas potential. This project has been sponsored by the Gas Research Institute and the Electric Power Research Institute. This Project has two objectives:to evaluate the relative costs of development of the natural gas resource potential which is believed to exist in each of the eighteen geographic areas for which estimates have been made by the Potential Gas Committee, andto present these data in such a way that meaningful comparisons can be made between alternate sources. In the study, the wok of the Potential Gas Committee is to be utilized for evaluation of the resource base. Data for exploration, drilling, and completion costs will be derived from other sources. P. 69

Where these models have been applied, they have Discoveryprocessmodels-we used to predictdrilling enhancedexploration/lease posit ion evaluation, basin successratesand field.>, ZPS for a developing basin." risk analysis evaluation,and alternativeenergyThe earliest attempts at these predictionsrelied supply determination.However,they have not found eitheron historical data (objective models)or on the generalapplication in the oil industry. development team's "feel" for the basin (subjective models ). Recentlymodels have been developedwhich This paper reviewsseveralof the models which have are more rigorousthan theseearliermodels. However, beendevelopedand indicates theirlimitations.A new thesemodelshave not foundgeneralusagebecausethey model is then developedbased on several of these 0149 are not applicable duringthe earlylife of the basin models vhich overcomes most of these and because they~re highly data intensive. A new limitations,It has been successfully appliedto both modelhas been developed which is basedon thesenewer a matureand an immaturshorizonin the GreaterGreen RiverBasin. modelsbut which is applicable duringthe entirelife Predictions have been made of the future of the ba~in and which is more flexiblein its data fielddiscoverysizes per incremental drillingeffort requireme,,~s. The model is appliedto both a mature in both horizons. and an immatu,'e horizon in the GreaterGreen River Basin. Definitions 3. How easilycan the questionsin (1) and (2) above 2. Energysource (primary, secon~'.try) be adjusted for changing ?, Economic(present cost lev,-l, specified cubt level, economic and/or technologicalclimates and as new information irrelevant cost level) becomesavailable. 4. Technological (currently feasible, indicated feasibility, infeasible -References and illustrations at end of paper.

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