In the bigger picture, nothing that took place this summer in gas production and demand and nothing relating to the storage or pipeline situation changes the bleak long-term outlook for North American gas supply against the relentless increases in demand. The Energy Information Administration recently reported that the industry's reserve additions in 2004 were 118% of consumption versus 111% in 2003 and 118% in 2002 but that additions from new fields (as opposed to field extensions and new reservoirs in old fields) were by far the smallest they've been for at least the past 10 years. Despite all the drilling (and rapidly rising finding costs) roughly 90% of the reserve replacement is now coming from field extensions and barely 4% from new fields. The oil ratios are similar. From a short-term economic perspective, this increased intensity of operations at existing fields is a positive factor, indicating economic efficiency. From a long-term resource perspective, however, the implications are extremely adverse. The truly new resources simply do not exist at the quantities and the costs to which the country has become accustomed.

Sadly, however, the short term events may cause the longer term concerns to be discounted once more, and needed solutions will be pushed to the back burner for a while longer.