NPC study urges prudent N. American oil, gas development

North America’s oil and natural gas resources are more abundant than previously thought and should be prudently developed, the National Petroleum Council recommended in a report submitted to US Sec. of Energy Steven Chu.

NPC said this might be achieved by establishing “councils of excellence” covering environmental, safety, and health practices; corporate and regulatory commitments to advancing environmental performance; engaging affected communities; and structuring policies to support prudent development of and access to resources.

The report, which NPC adopted on Sept. 15, also said the US will find it difficult to reduce greenhouse gas emissions further without putting a price on carbon that is economy-wide, market-based, predictable, transparent, and part of a global framework. It added that options should be kept open for carbon capture and sequestration, and information developed on environmental footprints and full fuel cycle impacts.

This recommendation produced two written dissents and a question during the NPC meeting from members concerned about possible adverse impacts of more-stringent GHG regulations on refining, chemical, and other heavy industries.

But the report does not call for putting a price on carbon emissions with a cap-and-trade or other program, two members of the coordinating committee that prepared it told OGJ following the meeting. “It was discussed extensively in several meetings,” explained Andrew J. Slaughter, the committee’s chairman who also is Shell Exploration & Production Co.’s Upstream Americas business environment manager. “But the final report does not make that recommendation.”

‘Most efficient strategy’

Fiji C. George, El Paso Corp.’s climate strategies director who led the committee’s climate change discussions, said that the group eventually decided that if the US deems it necessary to take further GHG emissions reduction steps, “it should recognize that the most efficient carbon capture strategy would be to put a price on carbon, both nationally and as part of an integrated global response.” Natural gas could significantly contribute to such an effort, he added.

The report also called for more efficient energy use, enhanced regulation of markets, and more development of intellectual capital and a skilled workforce. “There’s still a wide experience gap between retiring professionals and new hires in government as well as the industry,” said Christopher L. Conscenti, energy investment banking executive director at JP Morgan Securities LLC and chairman of the committee’s macroeconomic subgroup. “Natural gas and oil companies will need to take a bigger lead in recruitment and talent development.”

Chu, who attended the meeting, said, “I want to stress how impressive oil and gas exploration technologies have been over the past decade.” Recovery rates have gone from 20-30% to as high as 75% in some places, he said, adding, “Horizontal drilling has transformed natural gas exploration and production, and is transforming oil E&P. But as technology improves, one wants to sure it keeps up with safe and environmentally sensible extraction.”

He especially approved of the report’s emphasis on prudence. “I want to remind you that scientific evidence of human behavior’s impact on climate change is not decreasing,” Chu said. The measured ratio of Carbon 12 to Carbon 13 in the atmosphere shows the opposite, he maintained.

“Natural gas is actually going to be needed as the price of renewable energy sources goes down and more alternatives are deployed,” Chu said, adding, “As more intermittent systems are used, new and more-efficient gas turbines will be needed. Fortunately, the technology has made such turbines much more efficient, allowing them to be ramped up in 15 min—a feature that did not exist 10 years ago.”

‘Get started’

Chu told reporters after his remarks that he disagrees with those who say further development of US oil resources is not necessary because they represent only 2% of the world’s total. US oil production now accounts for about 11%, he said, adding that the study “shows we have abundant resources.” He said, “It does not mean that we should put off the transition to alternatives. It only shows that we have some time, but we still need to get started.”

Several oil and gas association officials endorsed the report’s conclusions. “It supports what our industry has been saying for some time—including last week in a letter to the president—that with policies that encourage responsible development of new and existing oil and natural gas resources, we could create 1.1 million additional jobs by 2020,” said Erik Milito, the American Petroleum Institute’s upstream director. “We have the solutions to our nation’s most pressing issues, and the industry stands ready to help.”

“It is heartening that the report acknowledges the importance of power markets to the natural gas industry going forward,” said Natural Gas Supply Association Pres. R. Skip Horvath. “We are especially struck by the recommendation that the interaction between the natural gas and electric markets should be harmonized, and we are looking forward to [the US Federal Energy Regulatory Commission’s] leadership in navigating the industry through this challenging, yet critical, policy area.”

“This report shows that natural gas is a driver of the US economy, and that its development, transmission and consumption create American jobs,” said Interstate Natural Gas Association of America Pres. Donald F. Santa. “These and other benefits, including environmental improvements, increased energy security and stable, competitive prices, only will grow with additional domestic gas use. This can happen only if our leaders ensure that the nation’s regulatory and investment climate continues to promote the pipeline expansion that will be necessary to accommodate both growing natural gas supplies, especially from the prolific shale areas, and growing demand, largely for power generation.”

Meanwhile, American Gas Association Pres. Dave McCurdy stated, “We are especially pleased that such a distinguished and diverse study team concluded that natural gas and energy efficiency can work in tandem to help solve our most challenging needs, from economic growth to energy security and environmental protection. We agree that responsible development of the resource is the lynchpin to realizing this promise, and we urge our policymakers to endorse the recommendations of this study that clearly lay out workable solutions to timely and important issues.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected