Unconventional gas: Report on a focus group discussion

three separate technologies were discussed but, because of the background of the discussants, the greater part of the discussion focused on geopressure aquifers. In general, there was considerable agreement with regard to the level and types of technological and economic uncertainty, the institutional barriers, and the role that the federal government should take in enhancing commercialization. The resource is considered to be vast and if the market were allowed to operate freely the demand for the gas would be considerable. It was estimated that in a free market an annual demand of up to 30 trillion cubic feet could be expected in the near future. The industry representatives think that the market demand would be greater than estimates compiled by the government because those demand estimates were influenced downward by assumptions of relatively constrained supply. It was agreed that the economic incentives available to industrry, given the current regulation of price, are not sufficient to induce significant risk captial into well drilling in search of geopressurized gas. A common industry position is that the government needs to provide front-end funds to at least assist in well drillings, or for additional research within existing wells. The goal of this research would be to compile necessary engineering data to reduce the technological uncertainty and provide a basis for economic decision-making on possible risk-captial expenditures by industry. Industry opinion at this time is that the ceiling price of gas is going to have to be above the current price to induce such investment decisions in favor of these technologies over alternative uses of risk capital.