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Because of lower natural gas prices in the first year of the COVID-19 pandemic, U.S. operators reported that proved natural gas reserves in 2020 declined by 4% to 473.3 trillion cubic feet (Tcf), according to our Proved Reserves of Crude Oil and Natural Gas in the United States, Year-End 2020 report.

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 the future from known reservoirs under existing economic and operating conditions.

The decline in natural gas reserves in 2020 was largely attributable to lower natural gas prices. The average annual price of natural gas at Henry Hub fell from $2.56 per million British thermal units (MMBtu) in 2019 to $2.03/MMBtu in 2020.

In 2020, low prices caused many operators to revise their proved reserves estimates downward and scale back development plans for new wells. Higher natural gas prices in 2021 will likely lead to more proved natural gas reserves in 2021.

Operators in Texas reported the largest decrease in natural gas proved reserves in 2020, down 11 Tcf, or 9%. Pennsylvania’s natural gas proved reserves fell by 9.6 Tcf, or 9%, in 2020.

In contrast, proved reserves of natural gas increased in Alaska from 9 Tcf to 36 Tcf. A large-scale liquefied natural gas development project received federal approval in May 2020. This project will include a new pipeline to bring natural gas from the north slope of Alaska to liquefaction and export facilities on its southern coast.

Principal contributor: Steve Grape