Abstract
About four trillion cubic feet of gas are thought to lie beneath Lake Erie. Federal and State officials currently are considering opening U.S. portions of the lake for gas extraction. The generalized resource policy evaluation model (GEN2) is used here to evaluate commercial prospects for such extraction under risk. Using average data, discounted profits appear to be marginal, especially by comparison to the risks encountered. However, higher gas prices, above-average reserves, or slow rates of production decline improve commercial prospects considerably. While public revenues from Lake Erie gas extraction will be modest, output from such wells could help stabilize supplies in a region which is chronically short of gas.
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