October 31, 1975 - Gerald R. Ford Presidential Library and Museum

After discussing the methods of complying with the mandate with
Senate and House members, the FEA concluded that having Government
personnel work with API and AGA subcommittees to prepare reserve estimates
would not be widely acceptable as an lIindependent li source of
estimates.
Hav"ing Government teams prepare estimates for a sampling of fields
and prepare a report based upon these estimates was deemed to be the
most lIindependentli but least IIcompleteli method because of the lack of
available technically competent manpower to make reserve estimates.
Technical manpm'ler requirements are monumental. The API has 24 subcommittees
that provide inputs to their annual reserves update. The
AGA has a siMilar but smaller organizational structure to provide
reserve data for natural gas and natural gas liquids. FPC estimated
that it would require a staff of up to 400 people to provide reserve
data on a continuous basis for natural gas.
The FPC Natural Gas Reserves Study, published in 1973, was a sample
of about 200 of some 6,400 known gas fields. Including management,
engineers, geologists, statisticians, consultants, and sub-professionals,
about 100 people worked on this study over a 2-year period. About half
of the U.S. gas reserves were quantified on an individual reservoir
basis. As more than 100 of the fields included in the sample were the
IIgiantsli (fields having reserves greater than 400 billion cubic feet),
the required manpower for making reserve estimates for the numerous
smaller fields not included in the original study would be significantly
higher. As the FEA mandate also included crude oil and, as the ratio
of oil fields to gas fields is about 4 to 1, this approach was not
deemed to be satisfactory for meeting the IIcomplete li requirement within
the allotted time. The number of engineers experienced in oil and gas
reserve calculations, geologists and other required technicians to do
a complete and independent analysis (in terms of 100 percent coverage
on an individual reservoir basis) of oil and gas reserves and resources
within 1 year was not available in Government. Thus, an alternative
method was needed.
Using decline curves was not considered acceptable because only
about one-third of the crude oil reserves were in reservoirs that
exhibited characteristics considered favorable for estimating proved
reserves by decline-curve analysis. An even lesser volume of gas
reserves could be estimated reliably from analyses of decline curves.
As other methods did not satisfy the Congressional mandate, FEA
elected to survey oil and gas operators by requesting estimates of proved
reserves and auditing their responses.
Critique of the Operators Survey
The Operators Survey provides the only comprehensive National
estimates of crude oil and natural gas proved reserves, indicated
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